Also, Bank Mutual Corporation ("Bank Mutual") announced that it intends to consolidate four retail branch offices in March of 2016 into nearby offices, which is expected to result in additional cost savings. These offices are in addition to other offices that were consolidated earlier in the year.
Effective December 31, 2015, Bank Mutual will freeze the benefits of the remaining 10% of its employees that are still earning benefits in its defined benefit pension plan. The benefits of all other employees had been frozen in a prior year. As a result of this most recent change, as well as expected changes in other actuarial assumptions related to the plan, management anticipates that pension-related expenses in 2016 could be $2.5 million lower than they were in 2015. It should be noted, however, that this amount is an estimate and that actuarial assumptions could change significantly between the date of this release and the final determination of pension expense for 2016. As such, there can be no assurances as to the amount of savings in pension-related expense in 2016.
With respect to Bank Mutual’s decision to consolidate four retail branch offices, management anticipates that this decision will result in annual cost savings of approximately $1.0 million. The four offices that are being consolidated into other nearby offices are located in the communities of Eau Claire, Cedarburg, New Holstein, and Hortonville, Wisconsin. The office that is being closed in Eau Claire is located at 3250 North Clairemont Avenue. Management anticipates that the free-standing ATM located at the Cedarburg location will remain open after the office is consolidated.
Bank Mutual will continue to provide products and services to the customers affected by this decision through other nearby locations, as well as its electronic and mobile banking channels. Additional information relating to this decision will be sent to the customers of these offices in the next few days. Consistent with its recent experience consolidating offices, management believes that it will retain the majority of deposits and loans currently serviced through these four locations, which were $47.5 million and $6.9 million, respectively, at September 30, 2015. However, there can be no assurances. In addition, management anticipates that many of the employees at the affected offices will be offered opportunities for comparable positions in nearby Bank Mutual locations.
In connection with this decision to consolidate offices, Bank Mutual expects to incur one-time costs of approximately $650,000, composed primarily of asset disposition costs, employment severance costs, and professional fees. Most of these costs will be recorded in the quarter ending December 31, 2015.
