PremierWest Bank in Medford, Ore., said Friday that it will close one-fourth of its branches to lower expenses as it struggles to return to profitability after more than three years of losses.
The $1.3 billion-asset company said that it expects to close five branches in Oregon and six in California by the end of April. The move should reduce pretax income by $790,000 in the first quarter and ultimately reduce annual overhead by $1.9 million, the company said.
The targeted branches represent less than 10% of the bank’s total deposits and will be consolidated into other locations. PremierWest currently has about 44 branches in California and Oregon.
“This is an extremely difficult decision because it affects our employees and in some cases communities already hard-hit by the extended period of economic weakness,” Jim Ford, president and chief executive of PremierWest Bank, said in a news release.
Through the first three quarters of 2011 the bank reported losses of roughly $13.6 million. Like other banks in the hard hit Pacific Northwest region, PremierWest has struggled with souring commercial real estate loans. It last turned a profit in 2007.