Two years after TCF Bank shuttered 37 branches in suburban Chicago grocery stores, the bank is downsizing again.
Wayzata-based TCF announced this week that it will be closing another 33 retail branches inside Jewel-Osco grocery stores and replacing the locations with ATMs. In 2014, TCF closed eight branches located within Cub supermarkets in Minnesota.
“Fifteen years ago, due to technical limitations, it was necessary to have a branch on every street corner in order to satisfy customers’ transaction needs,” TCF spokesman Mark Goldman said Friday. “But that was a vastly different time.”
Today, Goldman noted, people are doing much of their banking with computers and smartphones, eliminating the need for brick-and-mortar locations that are drawing fewer customers. Over the past year, TCF has added more than 200 ATM locations, an increase of more than 25 percent. Many of those machines were placed in Target stores in Minnesota and Michigan. The company also has added ATMs to grocery store parking lots, enabling customers to do their banking without leaving their cars.
Despite the new wave of branch closings, TCF still will have 145 retail branches, including 50 in Minnesota, where Cub Foods has been a longtime partner. Retailers continue to account for more than 40 percent of TCF’s remaining 343 locations.
Goldman said he cannot speculate on whether TCF will close more of the Jewel-Osco locations, which the bank took over in 1997 as part of a major push into the Chicago market. He noted that TCF recently opened a branch in a new Jewel-Osco supermarket in Bensenville, Ill.
Under the terms of the original deal with Jewel-Osco, TCF had to maintain all of the existing supermarket branches for 15 years. It quickly doubled the number of supermarket-based branches, with the bank’s CEO at the time declaring that the investment in new branches would be “more profitable than growing through acquisitions.”
But after the current round of closings, TCF will have shrunk its footprint in the Chicago area considerably, scaling back from 155 to 85 locations. Goldman noted that 70 percent of the branches being closed are located within 5 miles of a surviving TCF location.
The 2016 closings will be less painful than the last round in Chicago, which cost $7.6 million and resulted in the loss of about 200 jobs.
TCF declined to provide the actual cost of the current closings, but Goldman said it would be “immaterial.” The bank expects the move to produce a “net positive economic impact” when fully implemented.
Moreover, Goldman said, “we expect to retain most of the employees.”
In 2015, TCF reported profits of $197.1 million on revenue of $1.3 billion, with earnings up 13.2 percent over the prior year.