Peoples Bank will close its two Kitsap branches sometimes in the next few months. Bank officials made the closure announcements to employees in late October but had not notified customers yet. An announcement to customers was expected in November, after which time the bank would have 90 days before those branches can close.
“Peoples Bank continues to be one of the best rated most profitable banks in the state. Our decision to close the Kitsap offices is a reflection of those offices’ performance compared with our other offices, our need to reduce overhead to ensure we remain one of the best performing banks in the state and the prospects for commercial growth in Kitsap over the next three to five years,” said Tony Repanich, executive vice president of Retail Banking and Marketing.
The bank, founded in 1920, is based in Lynden, Wash., and has 28 locations including the Kitsap ones and branches within grocery stores. According to the FDIC, the bank had $33.8 million in combined deposits as of June 30 at the Poulsbo and Silverdale branches and a total of $1.05 billion at all its branches. The Silverdale location also hosted a home mortgage office and Poulsbo offered commercial loans; those loans will be transferred to a Seattle office for servicing.
The bank has a presence in seven other counties in the state, with the next closest branch in Seattle. Peoples will also close its Sedro-Woolley branch after its lease there expires.
Repanich said the two Kitsap offices didn’t perform as well compared to others because they didn’t have as many low-cost deposits — characterized by customers with a full-banking portfolio that includes savings, checking and CD accounts. He said a high number of customers at those branches only had CDs, and many of them were high-interest CDs that put uncertainty on whether those customers would be retained once those CDs matured. He said part of the decision was based on the need to cut overhead due to the economic slowdown. Other factors considered included the effectiveness of each office to get new customers and ability to grow loans.
“We never take closing a branch lightly. We’re proud of our employees in that marking and we’re working to help relocate them to new positions in the community,” he said.
The two offices employ 15 people and the company was offering them any open positions at other locations, but wasn’t expecting many employees to move to other branches, according to Repanich. He said the bank is providing severance packages and a counselor to help with job transition, including resume writing and job search to those employees who choose not to relocate.
Customers who were banking entirely online with the help of direct deposits and other tools may choose to remain with Peoples Bank but Repanich said the company didn’t expect that number to be high. Customers will have the option to withdraw the funds directly or have them wired to a new bank (those with CDs would have to wait for them to mature).
“We expect that we’ll lose most of the customers (in Kitsap) and that was factored into the decision,” Repanich said. “We have plenty of liquidity and deposits in other markets to be able to absorb that into the system.”
