Muncie-based First Merchants Corp. plans to close 17 of its bank branches by April 30 and use the savings to beef up its digital banking and in-branch technology initiatives, the bank announced Thursday.
First Merchants has 125 banking offices in Indiana, Ohio, Illinois and Michigan, including 24 in the Indianapolis area.
The bank did not identify which locations it plans to close, but told IBJ it plans to release more details starting in January. The bank also did not specify how much it expects to save annually as a result of the closures.
In a written statement, the bank said it has spent the past several years “building the vision for a banking delivery transformation that will serve as a catalyst for the company’s future.” The COVID-19 pandemic, which has pushed customers to do more of their banking online, accelerated these plans.
As part of the plans, First Merchants said it will enhance its ATM network throughout its operating footprint. It also plans to add a new banking center in Columbus, Ohio, by the end of 2021.
“We view banking centers as an important part of our delivery network, and as the role of the banking center changes, we will advance our digital and physical network and ensure our bankers are fully empowered with knowledge to meet the evolving needs of clients,” President and CEO Mike Rechin said in written remarks.
In July, First Merchants Chief Banking Officer Mike Stewart told IBJ that the bank had seen a nearly 20% increase in digital banking activity since the beginning of the pandemic. Some of that came from existing digital customers, while some came from customers who hadn’t previously used digital banking.
First Merchants said Thursday that it expects to incur about $5 million in charges related to the branch closures, with most of those charges showing up on the bank’s fourth-quarter 2020 and first-quarter 2021 financial statements.