Bankwell Financial Group in New Canaan, Conn., will record a pretax charge of $3.9 million in the fourth quarter.
The $2.2 billion-asset Bankwell said in a filing Wednesday that the charge is tied to several expense reductions and should save the company money in the long run. About $2 million of the charge is associated with closing a branch and consolidating office space, and roughly $800,000 is tied to employee severance pay, including incentives offered for early retirement to workers who were eligible.
The remaining $1.1 million is a fee for terminating a legacy vendor contract.
Bankwell said it expects the staff reductions and branch and office closings to result in about $2.3 million in annual cost savings ultimately.
“The actions we have announced today will result in both immediate and longer term improvements to our operating results,” President and CEO Chris Gruseke said in the filing. “As we leave the challenging operating environment of 2020 behind, we look forward to significant progress in 2021.”
The company said it will consolidate its headquarters in New Canaan and close several offices in doing so. It will also shutter its Elm Street branch in New Canaan around mid-2021. The bank currently has 13 branches, according to data from the Federal Deposit Insurance Corp.
Additionally, Bankwell said it was switching to a new technology vendor to support increased commercial deposit growth and its treasury management services.
“The company believes a more robust digital banking platform will expand its deposit acquisition opportunities with new and existing commercial relationships and warrants the onetime expense," Bankwell said in the filing.
