ST. LOUIS — Midland State Bank is closing 13 branches, 20% of its total, and vacating 23,000 square feet of corporate office space, with a cost savings of $5 million a year.
At the same time, Midland, based in Effingham, Illinois, plans to spend $4 million to renovate and upgrade five other branches to reduce their size — an annual net savings of $1 million beginning in in 2022, the company said.
Midland States did not immediately say how many branches will close in the St. Louis area. It entered the St. Louis market in 2014 with its purchase of Heartland Bank.
Midland States had 19 branch offices in the St. Louis metropolitan area, with a 1.1% deposit market share, and 54 offices outside the area as of June 30, 2019, according to the Federal Deposit Insurance Corp.'s most recent report.
The overall restructuring is expected to result in $13 million to $15 million in one-time costs, primarily related to asset impairment charges, lease write-downs and severance. The charges include a $1.1 million valuation adjustment related to property and vacant bank branches from past acquisitions that are held for sale.
“The ongoing COVID-19 pandemic has accelerated the shift toward digital banking and reduced the need for several of our smaller branches," Midland CEO Jeffrey Ludwig said. "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.”
Last week, parent company Midland States Bancorp (Nasdaq: MSBI) announced the sale of its commercial FHA loan origination platform, which operated through its Love Funding subsidiary.
Click here for the full story.
