Brown Deer-based Bank Mutual Corp. has announced it will close four of its retail branch offices and freeze its benefit pension plan to cut costs next year.
The bank, the largest based in the Milwaukee area, will consolidate its Cedarburg, Eau Claire, New Holstein and Hortonville branches into nearby branches in March, which it expects will save about $1 million annually.
The company in May completed a separate branch reduction, in which it closed seven branches. Like many other banks, Bank Mutual has been reevaluating its brick-and-mortar footprint as foot traffic declines and online banking increases among its customers.
The bank plans to notify customers of the branch closures in the next few days, and point them to other nearby locations and its electronic and mobile banking platforms for service. Based on its other recent closure experiences, Bank Mutual leadership expects to retain most of the $47.5 million in deposits and $6.9 million in loans from the four branches.
There were 18 employees at the impacted branches, about half of whom will remain with Bank Mutual at other branches.
“Realistically, fewer than nine employees will be impacted, and obviously that’s our top concern,” said Jack Steinbrecker, vice president, director of marketing at Bank Mutual.
Also among the bank’s cost cutting measures is a plan to freeze defined benefit pension plans on December 31. About 10 percent of Bank Mutual’s employees are still earning benefits under that plan; the other employees had their benefits frozen “in a prior year.”
Bank Mutual estimates the benefit change and other actuarial assumptions related to the plan will result in a $2.5 million reduction in pension-related expenses for 2016.
Bank Mutual in October reported third quarter net income of $3.3 million, or 7 cents per share, down from $4.4 million, or 9 cents per share, in the third quarter of 2014. The company attributed the lower profit to declines in net interest income and in bank-owned life insurance income, as well as higher compensation and benefits expense, advertising and marketing costs, and occupancy, equipment and data processing costs.
The bank, which had about 700 employees as of May, now has 64 branches in Wisconsin and one in Minnesota. Bank Mutual had $2.5 billion in total assets at the end of the third quarter.
