Company cites desire to improve profitability, ‘respond to changing customer preferences’
(WJHL) — HomeTrust Bank will close two of its five Tri-Cities branches — including its only Bristol location on the Virginia side of State Street.
The other closure is on Johnson City’s West Walnut Street on prime property next to the recently renovated Model Mill.
The Asheville, N.C.-based bank is closing nine of its 40 total branches in what it said was a move to improve profitability. HomeTrust also cited customers’ rising use of online financial services.
Two Johnson City branches will stay open. The other Tri-Cities branch is in Kingsport. HomeTrust entered the Tri-Cities market in 2014 when it purchased Jefferson Federal Bank, which itself had entered the Tri-Cities with its 2008 acquisition of State of Franklin Savings Bank.
HomeTrust Director of Marketing and Public Relations Elizabeth Bridgers told News Channel 11 employees at the affected branches are being given “priority consideration” for other positions at HomeTrust over the next 90 days.
In a news release HomeTrust said it does expect about $1.5 million of costs resulting from the closures including “costs associated with impacted employees.”
Letters sent to customers of the affected branches said the closures are set for Sept. 16. The release said the closures will net $3.2 million in expense reductions.
Along with other moves announced recently HomeTrust estimates its return on equity will increase by 2 percent.
The bank is also pre-paying its remaining $275 million of long-term borrowings, for a total of $475 million in early debt retirement since this March that will save it $5.7 million in interest expense.
And HomeTrust plans to bring its Small Business Administration loan servicing in house.
All told, HomeTrust projects just over $10 million in additional annual pre-tax income from the combined moves.