Online Banking Trend Drives First Financial to Shut Branches

Indiana-based First Financial Corporation has announced the closure of seven branches over the next six months as customers continue to migrate to online platforms.

The company — parent to First Financial Bank — has not specified which locations will be closed, but it said in a statement that it aimed to “optimize its banking center network as part of a plan to improve operating efficiencies and accommodate changing customer preferences”.

The closures will bring its network to 65 branches across Indiana, Illinois, Kentucky, and Tennessee. They follow the consolidation of 10 sites last year, and two acquisitions completed over the past four years.

First Financial bought HopFed Bancorp in 2019, adding 18 branches to its network, and acquired Hancock Bancorp last year, bringing in a further seven locations.

First Financial’s chairman Norman Lowery said: “Our customers are rapidly adopting our online banking platforms which provides us with an opportunity to consolidate these branches into other nearby locations while maintaining the high level of service our customers expect.”

Subject to regulatory sign-off, the closures are scheduled to be completed by the end of the first quarter of 2023 and are expected to save First Financial $1.5 million a year in operating expenses.

The number of physical bank branches across the US has been shrinking for many years as banks focus more on providing online and mobile services. According to S&P Global Market Intelligence, the number of in-store banking locations fell by more than 17% in 2021 compared with the previous year, while the total number of all other types of branches fell by 3.1%.