Northwest Bancshares in Warren, Pa., is planning to shutter its consumer finance unit.
The $9.7 billion-asset company said in a press release Monday that it will close all 44 offices of Northwest Consumer Discount Co. by July 14 as part of an effort to "improve efficiency." All of the unit’s loans will be transferred to Northwest’s bank for servicing and collections.
Northwest said it expects to incur about $3 million in pretax expenses over the next two quarters tied to the closure.
The company said it will still make direct consumer loans and offer indirect sales finance loans through various dealers and retailers.
Northwest said the unit had $11.6 million in noninterest expenses last year and just $1.6 million in noninterest income. The unit also was responsible for a $3.7 million loan-loss provision in 2016.
The company also projected that its net interest income would decrease over time as about $40 million of high-rate consumer discount loans roll off.
The move came as Northwest reported first-quarter results that William Wagner, its president and CEO, called “disappointing.” Earnings fell 2% from a year earlier, to $17.7 million.
