‘Branch Optimization Plan’ Driven By New Focus On Digital
September 16, 2020
Northwest Bank, based in Warren, Pennsylvania, announced Monday it will be closing 42 of its 205 full-service branches. Also slated for shuttering are one free-standing drive-through and a business office. The closings take place between in mid-December.
The bank did not disclose potentially how many employees will be affected by the plan.
The bank has not publicly announced which locations will close, according to a PennLive.com report. The closings are based on changing customer behaviors and recognizing operating efficiencies, the bank said in a press release.
“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, chairman, president and CEO of the bank 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.”
With the planned closings, the company said it anticipates approximately $12 million in pre-tax costs, which are expected to be recognized during the second half of the year, and the annual reduction in pre-tax operating expenses beginning in 2021 are estimated to be approximately $13 million, the bank said in a press release.
In July, the bank announced a net loss for the quarter ended June 30, 2020 of $6.2 million, or $(0.05) per diluted share. This represents 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. Seiffert said the losses were driven by the COVID-19 pandemic’s effect on the overall economy, and various costs associated with the acquisition of MutualBank.
Northwest Bank operates 205 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. The company added a number of new locations in the midstate area of Pennsylvania last year when it merged with Mount Joy-based Donegal Financial Services Corporation, the holding company for Union Community Bank, which operated 14 branches in Lancaster County.
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