Midland States in Illinois to close 13 branches
Midland States Bancorp in Effingham, Ill., is planning close a fifth of its branches.
The $6.6 billion-asset company said in a press release Thursday that it will shutter 13 branches by the end of this year. Midland also plans to shed 23,000 square feet of corporate office space.
Midland said it plans to renovate and upgrade five other branches "to reduce the size and better utilize those facilities to serve retail and commercial customers."
Midland said it expects the moves to cost $13 million to $15 million, largely tied to asset impairment charges, lease write-downs and severance. The closures and renovations are expected to save Midland $6 million annually.
The initiatives “reflect our ongoing efforts to evaluate all aspects of our operations for opportunities to enhance efficiencies,” Jeffrey Ludwig, Midland’s president and CEO, said in the release. “The ongoing COVID-19 pandemic has accelerated the shift towards digital banking and reduced the need for several of our smaller branches.”
Midland announced last month that it would sell its commercial Federal Housing Administration origination platform to New York mortgage lender Dwight Capital. Midland continue to service a $3.9 billion portfolio tied to the business, including about $284 million in deposits.
“The cost savings from these branch reductions, taken together with the recent sale of our FHA origination platform, are intended to drive further improvement in our efficiency ratio and result in a more consistent and predictable earnings stream,” Ludwig said in Thursday’s release.
Several banks have announced plans to close branches in recent months, including CB Financial Services in Carmichaels, Pa.; Mercantile Bank in Grand Rapids, Mich.; and Nicolet Bankshares in Green Bay, Wis.