Editor’s note: This article is by John Lippman, of the Valley News, in which it was first published Sept. 22, 2015.

WHITE RIVER JUNCTION — Merchants Bank, the sole remaining statewide bank in Vermont, let go 16 employees last week in a move that reflects how customers are beginning to favor online banking over visits to a local branch.

Burlington-based Merchants Bank, like banks everywhere, is seeing a decline in on-site transactions at local branch offices and a corresponding rise in online and mobile banking, said Geoffrey Hesslink, president of Merchants Bank.

As a result, the bank was forced to cut positions “to reflect changing customer behavior,” he said.

Merchants Bank has 32 branches across Vermont, including Upper Valley locations in White River Junction, Thetford, Bradford and Springfield.

The bank had a total of 287 full-time and 25 part-time employees as of the end 2014, according to regulatory filings, which brings the 16 employee layoffs to a 6 percent reduction in workforce.

All the people let go involved staff in “customer-facing positions,” said one of the laid-off employees who requested anonymity because they were not authorized to discuss the layoffs and did not want to jeopardize their severance payment. The layoffs included tellers and customer service representatives who handle customer deposits, withdrawals and other simple transactions at local branch offices.

Merchants Bank reported slightly lower revenue and a net income of $3.1 million for the quarter that ended June 30, compared to net income of $3.4 million in the previous year’s period. In a positive sign, commercial loan activity picked up and net interest income increased for the first time in several quarters. The bank is currently in the process of acquiring NUVO Bank & Trust Company in Springfield, Mass., for $21.8 million in cash and stock. The bank expects to complete that process by next quarter.

Once viewed as a stable — albeit modest-paying job — bank tellers are seeing their traditional job buffeted by technology and becoming more scarce as customers prefer to conduct banking transactions via computer and smartphone.

The number of customers who prefer to visit a branch is now only 17 percent, according to a recent survey by the American Bankers Association, while the preference for banking over a smartphone stands at 12 percent compared to 3 percent five years ago. The Internet is now more widely used than ATMs for transactions, with 32 percent of customers preferring to use a laptop or PC, the ABA said.

The U.S. Bureau of Labor Statistics projects that the number of bank tellers in the country will increase only 1 percent, from 545,300 to 551,000, between 2012 and 2022 as technology takes over many of the functions of the teller’s job.

“Past job growth for tellers was driven by rapid expansion of bank branches,” the Bureau reports in its Occupational Outlook Handbook. But with growth in branches slowing and banking transactions shifting online, “fewer bank customers will visit the teller window,” resulting in a “decreased demand for tellers.” The Bureau also notes that the introduction of webcams in branches and at ATMs “will allow tellers to service a greater number of customers from one location, reducing the number of tellers needed for each bank.”

That is what is happening at Claremont Savings Bank, which in April opened a new “high tech, high touch” branch on Charlestown Road to replace the bank’s former branch on Maple Avenue.

The Charlestown Road branch is staffed by only two employees — now called “universal associates” — compared to five who worked at the Maple Street branch. The Charlestown Road employees have gone through additional training to handle everything from opening new accounts to assisting on Individual Retirement Account plans and consumer loans. If there is something they can’t handle, then customers at the branch can talk with a Claremont Savings Bank official via video conference.

“We’re finding we need people who are cross-trained in a lot more areas than just teller transactions,” said Brenda Reed, senior vice president of retail services. She said the training can take up to two years as one-time tellers now need to perform “a lot of different functionalities.”

Sherwood Moody, president of Claremont Savings Bank, said in one respect he has been surprised by the favorable response to the introduction of the advanced banking technology.

“At first we thought it would just be millennials, but it’s been received right across the generations,” he said.

Fewer tellers, however, does not necessarily mean Claremont Savings Bank has fewer employees. The bank has had to beef up staffing at its call center at its Claremont headquarters to about 10 employees to handle the volume of inquiries coming in from customer banking remotely. The department had three employees in 2001.

At Ledyard National Bank, President Kathryn Underwood said that as customers “migrate” to conducting their banking online there is an opportunity to educate tellers to handle a wider variety of tasks within the branches, such as helping customers apply for loans. She said Ledyard is “making a greater commitment to training, so we don’t anticipate a change in staffing.”

Still, Underwood said, business clients continue to rely upon the branches for their needs, and she doesn’t foresee that dramatically changing in the immediate future. Ledyard has seven branches and “we don’t foresee them going away,” she said.