Effingham, Ill.-based Midland State Bancorp is closing or renovating branches and reducing its corporate office space to cut expenses.
Midland will close or consolidate 13 branches, a fifth of its network, and vacate approximately 23,000 square feet of corporate office space by the end of the year, resulting in about $5 million in savings the company said.
The bank is renovating an additional five branches to “reduce the size and better utilize those facilities to serve retail and commercial customers.” The changes will cost about $4 million, but will save $1 million each year beginning in 2022.
In total, the moves will cost $13 million to $15 million, Midland said, primarily from asset impairment charges, lease write-downs and severance. The charges include an approximately $1.1 million valuation adjustment related to property and vacant bank branches from past acquisitions that are held for sale.
“The actions announced today reflect our ongoing efforts to evaluate all aspects of our operations for opportunities to enhance efficiencies,” said Jeffrey Ludwig, president and CEO. “The ongoing COVID-19 pandemic has accelerated the shift towards digital banking and reduced the need for several of our smaller branches. Given the proximity of other branches, we believe that these adjustments to our branch network will have a minimal impact on our ability to provide customers with a convenient location to do their in-person banking.”
The $6.6 billion Midland also sold its commercial FHA origination platform in August to New York-based Dwight Capital.
Midland didn’t specify which branches would be affected. It currently has 61 offices in Illinois and 13 in Missouri.