Bank closing 25 branches and cutting workforce
A Michigan bank with a large presence in the region has initiated a “restructuring effort” to reduce the size of its workforce and branch network.
Midland-based Chemical Financial Corporation, the parent of Chemical Bank, says it will consolidate 25 of its branches in the fourth quarter of 2017, according to a filing last week with the U.S. Securities and Exchange Commission.
The plan follows the company’s third-quarter consolidation of 13 locations. Following these closures, the company will have 211 branches.
The restructuring will also result in a roughly seven-percent net reduction in the company’s workforce. Impacted staff have been notified, and departures are expected to be complete by Sept. 30.
Among the staff leaving the company is Leonardo Armat, COO of business operations.
Chemical says the moves were partly guided by “a focus on enhancing operating efficiency” and achieving “long-term growth prospects” and to provide Chemical “the ability to re-allocate resources” to best serve its communities and “growing customer base.”
Chemical recently made significant upgrades to its electronic banking technology by implementing additional online products and services, enhanced security and other convenience additions for both retail and business customers.
Chemical expects to incur total pre-tax charges of about $18 million, consisting of about $15 million in severance and retirement packages for affected staff and about $3 million related to market-value adjustments on branches consolidated during the third and fourth quarters.
Chemical also expects an annual cost savings of around $20 million.
Chemical Financial Corporation operates through its state-chartered subsidiary Chemical Bank.
The company operates more than 200 banking offices in Michigan, northeast Ohio and northern Indiana.
It had total assets of $18.8 billion as of June 30, 2017.