Buoyed by a banner 2005, several Inland Northwest banking executives say they’re feeling almost as upbeat about business in 2006 — provided the Fed finally settles down.
“If (interest) rates continue to increase, the economy will slow down some. But my sense is that the Fed is getting close to ending the rate increases,” said Peter Stanton, third-generation chairman and president of Spokane-based Washington Trust Bank, with branches in Washington, Idaho, Oregon and Utah.
Stanton said his bank just wrapped up the best year in its 103-year history, and he expects the bank’s business to be brisk this year, too.
“Our budget projections call for about a 14 to 15 percent increase in loans and roughly the same amount in deposits,” he said.
Meanwhile, continued growth will again figure prominently in Sterling Savings Bank’s annual plans, said Heidi Stanley, the bank’s chief operating officer.
“We’ve already identified six new branches to be opened throughout the Northwest this year and there could be more,” said Stanley. Sterling Savings’ footprint grew by seven branches last year, including two in Seattle and one in Spokane’s Northpointe area, and it added 200 employees.
Sterling now operates 140 branches and employs 1,800 people, making it the third-largest bank headquartered in Washington. Locations for its proposed expansion will be announced this year.
The bank also plans to capitalize on its recent shift from thrift to a commercial bank, Stanley said.
“We expect business activity to remain robust in the coming year with continued growth in business and consumer lending” she said. “We also see the economy of the Northwest continuing to strengthen and anticipate double-digit growth in both deposit and loan production.”
On the operations side, all banks will be picking up the tab for federally mandated programs, said Randall Fewel, president and CEO of Inland Northwest Bank, a publicly traded community bank with eight branches in Washington and two in Idaho.
“We’re adding a full-time compliance person to help us meet the ever-increasing regulatory burden the government places on banks to help look for terrorists and lots of other things,” said Fewel, “so we’re going to have some additional overhead this year.”
In April, Inland Northwest customers will be able to use a new full-service branch on Ruby Street, in north Spokane. With four drive-through lanes and private offices, the location likely will replace a tiny nearby branch inside Yoke’s Fresh Market when its lease expires.
Following a year that yielded a 29 percent increase in INB’s stock value and a 20 percent jump in net profit, Fewel said: “I believe 2006 will be good, but not as great as 2005.”
He predicted some slowing in the construction and mortgage loan businesses.
“Certainly the escalation of home prices can’t continue at its current rate. I’d expect houses to go up some in 2006, but not as much as they did in 2005,” Fewel said.
AmericanWest Bank, fresh from a turnaround, is also gearing up for significant growth and expansion this year, said Robert Daugherty. He’s a California transplant who, since taking the helm at AmericanWest 15 months ago, has helped rejuvenate the bank in the wake of an $18 million bad debt expense – a result of loans made by previous managers.
Now the Spokane-based bank is working to acquire Pasco’s Columbia Trust Bank, which will add about $218 million in assets, beefing up AmericanWest’s assets to $1.4 billion, said Daugherty.
New full-service AmericanWest branches are on the way this summer. One is in Coeur d’Alene; another, in Hayden, will replace a smaller facility next door; and the third, in Sandpoint, will open at a temporary site while a permanent branch is built downtown. The Sandpoint branch has a scheduled third-quarter completion date.
Those locations will join AmericanWest’s 40 branches in Eastern and central Washington and North Idaho.
Duane Brandenburg also is poised to enter the expanding market. He and several other banking veterans are awaiting federal and state approval to launch RiverBank, which will be headquartered in downtown Spokane’s Riverpoint Higher Education park area.
Brandenburg hopes to see the bank open in late May.
For now, he’s scoping out technologies to drive what he believes will be the first online-only bank in the city.
RiverBank, which will cater to small businesses, will require only a main office supplemented by roving armored couriers to retrieve customers’ transactions.
That means RiverBank’s clients will be able to do nearly all their banking in real time in their own offices and stores.
“It takes a whole lot of functions out of the bank and gives them to the business person,” Brandenburg said. “So a customer could make four deposits a day and will be able to totally control the financial management of his company right there.”