Flagstar Bank to Shut Down 60 Branches – 8 Closures in Michigan and Indiana Announced

In a massive shake-up that’s sweeping communities across the Midwest, Flagstar Bank recently announced shutting down 60 of its branches permanently in 2025 and yes, eight of them are located right here in Indiana and Michigan. As part of its effort to do better and trim costs after losing a significant chunk of money, the bank is already starting to shut down shop at some banks and will go on doing it during the rest of this year.

So, what’s happening with Flagstar? And why now?

A Paradigm Shift in Banking Habits

In between this transition lies a gargantuan change of banking habits. With internet banking and smartphone apps becoming the new norm for checking accounts, paying bills, and transferring money, fewer consumers are visiting bank branches. ATMs and online websites now do what was once teller work done face-to-face. This has been mounting for some years but really gained momentum during and immediately after the pandemic and banks are only now experiencing the long-term consequences.

For Flagstar, this change in consumer behavior is one of the main reasons behind the closings. Essentially, folks just aren’t visiting the brick-and-mortar bank locations as much anymore, and keeping all of them just isn’t cost-effective.

Financial Losses Fuel the Fire

Then, of course, there is the money factor. Flagstar plainly lost $845 million in 2024 – a brutal boot in the mouth by any estimate. A loss of that magnitude forces even the most highly cushioned institutions into decision-making mode, where unpopular decisions must be made. Merging branches and firing employees are two of the first significant actions that firms take in an effort to staunch the bleeding and downsize for whatever the future might bring.

Unfortunately, that consolidation will eliminate the local presence of their community banks for Indiana and Michigan communities.

Michigan Offices to Close

Six Flagstar Michigan offices are slated to close officially. They include:

• Allen Park – 3233 Fairlane Drive
• East Lansing – 1400 East Lake Lansing Road
• Grand Rapids – 3205 28th Street Southeast
• Jackson – 704 South Brown Street
• Marquette – 1401 Presque Isle Avenue
• White Lake – 6490 Highland Road

Each of them serves its own distinct local clientele from employees and students at and around Michigan State University in East Lansing to the lake-front city of Marquette. To regulars who’ve formed a bond with their local office and tellers, the closings are very personal.

Two Closures in Indiana

Indiana isn’t left behind either. Two of its offices are under threat of being shut down:

• Auburn – 200 South Van Buren Street
• Fort Wayne – 5525 St. Joe Rd.

Similarly with Michigan, these closures will impact smaller cities where having a local office in close proximity is still appreciated, particularly for older demographic or those brought up on traditional banking.

What’s Next for Customers

For Flagstar customers, this might not mean closing your account, but it will mean adapting to having fewer branches. The bank is emphasizing its digital channels, forcing customers to go through mobile apps and ATMs for the majority of banking needs. And for those who prefer to see a face, it’ll probably mean driving further or changing banks altogether.

For employees, the shutdowns are not only inconvenient they’re life-changing. Layoffs are part of this larger restructuring, and numerous bank workers are left to question what the future holds. As banks become more digitized, entire categories of jobs are being eliminated or essentially redefined.

Flagstar Isn’t Alone

It’s also worth pointing out that Flagstar isn’t the first bank to scale back its presence in its branches. Over the last couple of years, most of the big U.S. banks – PNC, Huntington, US Bank, Bank of America, and Capital One have followed suit. It’s a bigger banking trend: fewer branches, more tech, and efficiencies.

But even if banks are attempting to do what they believe they need to do in order to stay competitive and profitable, the impacted communities are paying the price for the changes. For some communities, especially rural or minority communities, the loss of a community bank can be losing a vital part of the local economy as well as access to capital.

Additional Closures on the Horizon

And that might only be the start. Flagstar has announced that it will be closing a further 32 branches in 2025 though the specific locations have yet to be announced. If you’re in a neighborhood covered by Flagstar, it may be worth listening out for announcements, particularly if your nearest branch is small or gets fewer customers.

Local Business Closures Add to the Blow

Interestingly, bank closure isn’t sweeping the nation by itself other favorite institutions in neighborhoods such as Grand Rapids, Michigan, are not excluded. Starting from iconic eateries such as Grand Rapids Brewing Co. to alternative venues such as GR Noir and Rockwell Republic, numerous buildings have posted full-time closures within the last one year. Contributing reasons span from economic stress and the influence of fire through to lasting effects of the COVID-19 pandemic.

And if you take all these local branch closings and put them on top of this list of struggling banks, it’s a picture of a society in transition or, in some cases, in crisis. It’s an indication that our economy is basically changing, and businesses that once seemed as strong as a rock are now unstable.

Flagstar’s decision to shut 60 offices, including eight in Indiana and Michigan, is not just a business decision – it’s a declaration of the times. Technological times are remapping how we live our lives, what we eat and how we eat to how we bank, and some aren’t keeping pace. As consumers, it’s worth being alert and open to embracing changes in the way we utilize shared services. And as neighborhoods, these closures remind us how dependent our communities are on local businesses and institutions and how fast they can vanish when things get bad.

Watch for further news from Flagstar in the months ahead as more branches shut down.