A mass layoff is coming after Muncie-based First Merchants Corp. bought Citizens Financial Bank.
More than 80 former Citizens Financial Bank employees will lose their jobs, starting in December. That's about a third of the workforce of the Munster-based bank, which now employs 260 workers at locations throughout Northwest Indiana and south suburban Illinois.
First Merchants plans to eliminate back-office positions at Citizens Financial Bank offices in Hammond, Schererville and Munster. Layoffs will take place at two different Munster branches, including the bank's headquarters on Ridge Road.
Operations and technology employees are often deemed redundant and let go after bank mergers. First Merchants bought Citizens Financial and its 20 branches in Northwest Indiana and Illinois's south suburbs in May, in a deal valued at $114.7 million.
All of the layoffs will affect employees in support roles, said Daryl Pomranke, who was president and chief executive officer of Citizens Financial Bank and who will stay on as a regional president after the consolidation.
"One of the strengths of the deal was that there was no crossover coverage area," he said. "While business units will be centralized, all of our sales and client-facing people will remain."
Tellers, loan officers and salespeople will keep their jobs, Pomranke said. First Merchants, however, will take over support work that had been done by local employees.
"Certainly when the deal was announced, cost savings were identified to avoid any duplication of services," he said.
Affected employees work in backroom departments, including finance, human resources, loan processing, items processing and information technology, said Kim Ellington, a senior vice president and director of human resources at First Merchants. They will get severance packages, and First Merchants is offering resume and interview clinics to help them find new jobs, she said.
The bank gave the Indiana Department of Workforce Development notice it would lay off 84 employees, starting Dec. 6. The layoffs will take place in phases, as different support functions are transferred to the Muncie-based bank, Pomranke said.
The layoffs will continue through the first quarter of 2014.
First Merchants is the second largest bank in Indiana, and will have assets of $5.4 billion once the acquisition is finalized. First Merchants plans to keep all of Citizens Financial Bank's existing 20 branches, Ellington said. The bank will end up with about 100 banking offices in Indiana, Illinois and Ohio.