Police investigators say four staff were present at the Whangamata branch of the BNZ bank when a 53-year-old man armed with an axe entered the premises about 10am this morning.
"Three staff were able to flee the building but one was not and remained in the store with the man who smashed a number of windows and the front counter,'' Detective Sergeant Martyn Hughes of the Thames-Coromandel CIB said.
"At this point in time we do not believe the man made any threats toward this staff member who was able to escape before the arrival of police.
"It then appears a member of the public secured the front doors of the bank to prevent the offender escaping.''
Mr Hughes said Whangamata police were able to respond quickly to the incident thanks to a number of 111 phone calls.
"As is standard procedures for such situations, officers responding were equipped with firearms,'' he said.
"This is to ensure the safety of not only members of the public and our staff but also the offender as well.''
While police were still interviewing the offender, there was no evidence to suggest the incident was a robbery, Mr Hughes said.
A Whangamata man is in police custody after smashing the front window and door of the Whangamata BNZ with a sledgehammer this morning.
The man took to the front of the shop with the weapon about 9.45am today.
Staff were inside at the time but no one was hurt.
Police have arrested the man who is believed to have been suffering from depression.
Eyewitnesses said they saw an older, local man who walks with a limp enter the bank at around 9.45am.
He started smashing up the interior of the bank.
Computers, shelving and chairs were thrown through the bank's door.
The local butcher, who has his shop across from the bank, called 111.
Police arrived on the scene moments later.