MUNCIE, Ind. — Half a year after it acquired Muncie-based MutualBank, Pennsylvania-based Northwest Bank has announced plans to close 11 of the 36 MutualBank locations it bought in Indiana.
Northwest operates 205 full-service community banking offices and eight free-standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana.
The company says it will close 42 of the 205 full-service offices, or approximately 20%, throughout its footprint, along with one free-standing drive-through and one business office Dec. 14-18.
The Indiana locations to be shut down include the Broadway branch near Muncie Mall, as well as locations in Bloomington, Carmel, Fort Wayne, Goshen, Greenwood, South Bend; Warsaw; Lyons, Mitchell and Mishawaka (business office).
►EARLIER: Northwest keeps MutualBank branches, cuts jobs
“We expect most if not all of those employees to be absorbed in other positions within Northwest,” Dave Heeter, Indiana Region CEO at Northwest, told The Star Press.
“In Greenwood, Carmel and Fort Wayne, we will be maintaining business development offices,” Heeter went on. “We are retaining a robust branch network still and provide technology that has become very popular.”
About 80 employees in Delaware County lost their jobs due to the acquisition that was finalized in April, when Northwest said it was happy to welcome 348 new employees into its family from MutualBank.
For a story about reopening Northwest branch lobbies in Muncie that had been closed due to COVID-19, Heeter in May told The Star Press:
“In general, banking has become a very automated business … The days of long lines at busy times of the month are no more given direct deposit, ACH (Automated Clearing House) and internet banking. I only see that continuing. Our ability as an industry to conduct business electronically provides 24/7 access and convenience that customers demand. This includes the opening of new accounts and loan applications. I think basic transactions will continue top move toward technology exclusively.”
The one thing that he doesn’t think will change is the bank’s role as a trusted advisor. A loan application can be done electronically, but determining the best loan requires an interaction with an expert, Heeter stated. And investing money requires advice for most people.
Northwest will continue to operate branches at Charles Street downtown, McGalliard Road, West Jackson Street and Madison Street in Muncie; Yorktown and Albany; and across the state in Winchester, Marion, Gas City, Warsaw, Bloomington, South Bend, Goshen, Granger, Elkhart and other sites.
“Our customers’ banking preferences continue to evolve to favor a more digital banking experience and the COVID-19 pandemic has magnified and accelerated these preferences,” Ronald J. Seiffert, CEO of Northwest, said in a press release. “This branch optimization plan reflects our ongoing efforts to ensure we are well positioned in our industry to provide the community bank experience that is valued by our customer base while also enhancing our strong digital and mobile banking presence.”
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Northwest Bancshares, the holding company owning Northwest in July announced a net loss for the quarter ended June 30, 2020, of $6.2 million, or $(0.05) per diluted share, representing a decrease of $32.6 million, or 123.5%, compared to the same quarter last year when net income was $26.4 million or $0.25 per diluted share.
“Obviously we are disappointed to report a loss for the quarter,” Seiffert was quoted in a news release. “However, as we assess the reasons for this loss, there is certainly cause for optimism as we enter the second half of the year. The primary drivers behind the quarterly loss are threefold.
“First, COVID-related loan loss provisions driven by a deteriorated economic forecast, which we estimate accounted for approximately $21.3 million of our elevated provision expense.
“Second, our loan loss provision expense during the quarter was also negatively impacted by the recording of provision expense for our MutualBank acquisition of approximately $18.2 million …
“Third, acquisition costs of $9.7 million associated with the close and integration of MutualBank during the quarter negatively affected results as well. It should be noted, however, that year-to-date acquisition costs of $12.1 million were lower than originally projected.”
He went on to say: “Assuming the current economic environment continues to remain stable, we believe that we have adequately provided for potential future losses during the first half of the year and have been able to do so with current earnings.
Contact Seth Slabaugh at 765-213-5834 or seths@muncie.gannett.com