A Montana bank has cut 10 jobs at locations across the state and is reducing operating hours at one branch as cautious consumers borrow less in an uncertain economy, a bank executive said.
Montana West Bank Chief Operating Officer Mike Dalton said the bank is laying off six employees at its Whitefish and Kalispell branches. The bank has already laid off two employees from its Helena branch, one in Great Falls and one in Missoula.
In addition, the Whitefish branch's lobby hours will be by appointment only.
The bank has to reduce expenses because people are not borrowing like in the past, Dalton told Montana Public Radio.
"We have money to loan, but no borrowers. We then, of course, have to look at the other side of the income statement, that is the expense side," Dalton said.
Mountain West Bank serves about 36,000 customers and has branches in most cities in Montana, except Billings.
The bank has been under scrutiny from regulators. Earlier this year, the Treasury Department's Office of the Comptroller of the Currency ordered the bank to raise $6 million in capital. That was a result of defaulted loans or the possibility of defaulted loans from developers and subdivisions around Bozeman, Missoula and the Flathead Valley.
Dalton said this week's cutbacks aren't related to the OCC order and that Mountain West has raised more than $7.5 million from shareholders.
"We were above the standard for what's called a well-capitalized bank, but because we had some challenges in our loan portfolio they wanted to make sure we had more capital to back up any potential problems that we might have," Dalton said.
Dalton said he doesn't expect any more layoffs.
No other banks have had to lay off employees in the state, but some will also have to reduce their operating expenses, said Annie Goodwin, commissioner of the Montana Division of Banking.
"We are finding other banks in Montana are facing similar challenges in reviewing their operating expenses, their loan portfolios as well as their allowances for loan loss reserves in the event those need to be utilized for loans that are not being paid by borrowers," Goodwin said.
Information from: Montana Public Radio, http://www.mtpr.org