Marshall & Ilsley Corp. would close 28 Wisconsin branches Oct. 10 as a part of its deal to buy Milwaukee rival Security Capital Corp.
Michael Hatfield, a Marshall & Ilsley spokesman, said nine closings would be in Milwaukee and the rest in northern Wisconsin. The $945 million deal is scheduled to close Oct. 1.
Four Marshall & Ilsley offices will close. Another six M&I branches in northern Wisconsin are slated for sale.
It's unclear how many jobs would be lost as a result of the branch shutdowns, but included in the planned closings is Security's main office in downtown Milwaukee, three blocks from Marshall & Ilsley's headquarters. Mr. Hatfield said some M&I and Security Capital branches are across the street from each other. The company announced its branch closings in a letter to customers two weeks ago.
The company plans to eliminate 430 of Security's 900 positions. These mostly would be operational and administrative jobs in Milwaukee. The cutbacks also include 125 jobs in Security's mortgage subsidiary, Security Financial & Mortgage Corp., St. Louis.
Mr. Hatfield said the St. Louis operation either would be folded into Marshall & Ilsley's mortgage business or it would be sold.
Likewise, the company plans to sell the 40-employee Security Insurance & Financial Services, a Milwaukee property and casualty insurance agency. Sales of either operation should be immaterial to earnings. Ten mortgage lending offices around Wisconsin are to be folded into Marshall & Ilsley branches.
In general, the acquisition is proceeding on time, Mr. Hatfield said. The company, which would grow from $15.4 billion of assets to $19.1 billion, would be a dominant force in Wisconsin. The merged company would have $12 billion of deposits, or 19% of the state's total. The next closest rival would be Firstar Corp. of Milwaukee, which holds 12% of the state's deposits. Marshall & Ilsley would also overtake Firstar as the biggest bank in Milwaukee.
Most of the job cuts would take place on Oct. 1, Mr. Hatfield said. The company hopes to offer many of the workers jobs elsewhere in the company. When the merger was announced, Marshall & Ilsley had 500 job openings, he added.
Marshall & Ilsley expects to realize $2.3 million in after-tax cost savings this year as a result of the deal- $16.3 million in 1998 and $19.1 million in 1999.
"That's what's making this deal work-the cost savings," said Ross Demmerle, an analyst with McDonald & Co. Securities in Cleveland. "They're buying market share, and they're buying deposits."
The acquisition is being accounted for as a pooling of interest and includes amortization of $252.4 million in goodwill over 25 years.
Analysts said they believe Marshall & Ilsley is stepping up efforts to keep Security customers.
"They're working very hard to keep (customers losses) to a minimum," said John G. Cornwell, an analyst with Cleary Gull Reiland & McDevitt Inc. in Milwaukee. Mr. Cornwell, a Security customer, said, "I'm getting three times the mailings I used to get."