November 18, 2012 in Business, Region

Local financial sector makes gains in stubborn economy

By The Spokesman-Review
 
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The cafeteria at Spokane Teachers Credit Union headquarters is bustling as Ryan Evoniuk, an information management systems administrator, plays ping pong and from left, Cheryl Craig, an IT project manager, Shawna Brown, a software development manager, and Lily Laughlin and Wendy Fry, assistant managers of the Contact Center, take a lunch break on Wednesday.
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Most people might have missed the news that Spokane’s AmericanWest Bank is buying Oregon-based PremierWest Bank.

But it’s big news for people keeping track of new jobs. That pending acquisition will add more jobs to the bank’s Spokane support center, and then more later as PremierWest’s 32 branches are folded into AmericanWest’s operations.

“You need more analysts and more support people to assist those new branches and those offices,” said Scott Kisting, AmericanWest’s CEO.

The new jobs are emblematic of what is happening to the financial services sector in Spokane.

While unemployment remains stubbornly high in Spokane and North Idaho, finance is among three strong areas rocking forward in the past couple of years, along with specialized manufacturing and scientific-professional jobs.

AmericanWest, which in late 2009 was teetering on being taken over due to its bad loans, has changed directions, growing from roughly 600 jobs companywide in 2010 to about 800 today.

In Spokane that translates to 76 new jobs, bringing AmericanWest employment to 236, said bank spokeswoman Kelly McPhee.

And at Spokane Teachers Credit Union the number of employees has grown to 500 – up from 350 workers.

The numbers have grabbed the attention of economists as the real estate market crawls forward and retailers are seeing resurgent customer spending. Hit hard during the recession, financial services fell from its 2006 total of 10,200 jobs in Spokane to around 8,800 jobs in 2010.

Since then, there have been gains of 400 new jobs in both the banking-credit union and in the insurance subcategories, said Doug Tweedy, the state labor economist for Spokane.

A third subgroup that includes financial advisers, trust and asset managers and credit remediation firms has gained about 45 jobs since 2010, according to state numbers.

Tweedy’s data show Spokane’s bank-and-credit union job total now stands at 4,100. It’s not as high as the 2007 peak 4,700, but that job category’s growth in the past two years has been impressive, caused by financial institutions scrambling to add new services, such as full-service electronic banking, to attract and keep their customers.

Tweedy said he believes job growth at banks and credit unions will slow over the next two years.

“Employment in this subsector is dependent largely on technology and government regulation,” he said.

Yet demand for banking services is expected to accelerate as more homeowners and more businesses shift from holding onto cash, to seeking loans. That equates to more bank services, said Alivia Metts, the Idaho state Labor Department economist for North Idaho.

“Commercial loans should increase as businesses are more willing to borrow and banks are more willing to lend,” she said.

Tweedy suggested that insurance carriers in the area — who currently employ 4,700 people in Spokane County — will have modest growth next year.

“Health care seems to be a driver in (the insurance category), and as health care evolves new markets may open up here,” he said.

The entire financial services sector ranks sixth in Spokane. The top three include health care, government (including public education) and retail.

The effect of financial services is large because its salaries tend to far exceed Spokane County’s average. The 2011 average finance salary was $60,883, compared to the county average of $43,000. The national median wage for financial services jobs is $68,000, or $33.05 per hour.

Wages are going up faster than new jobs, Tweedy said, the result of company consolidation and a higher reliance on technology.

“While the total number of Spokane finance-sector companies has decreased, the firms that survived got bigger and are paying better,” he said.

There were 158 banks and credit unions five years ago in Spokane. Today there are 103.

And there were 309 insurance firms in Spokane County during 2007. This year there are 296, Tweedy said.

Not every bank or credit union went through a bust and then a rebound.

Spokane Teachers Credit Union chugged through the down period without having to lay anyone off, said CEO Tom Johnson.

STCU avoided layoffs between 2008 and 2010 because it kept its loan portfolio free of risky commercial lending and the overheated mortgage market.

“We stuck to our knitting,” he said.

By focusing on residential and small-business lending, STCU grew its financial assets, and added jobs. Customers now total about 110,000.

“If we want to deliver high level of service all the time to every customer, we have to hire more people,” Johnson said, noting “not all financial institutions will feel that way.”

Financial job shifts in Kootenai County took slightly different paths, according to North Idaho’s Metts.

Kootenai County’s banks and credit unions gained 154 jobs since 2007. But Kootenai County insurance companies didn’t rebound the way they did in Spokane; those firms have 177 fewer jobs than in 2007, according to Metts’ numbers.

A surprise in North Idaho is the surge in jobs in the catch-all group for commodities advisers, investment managers and remediation services. Since 2007 that subgroup gained 327 jobs, according to Idaho’s job numbers.

Metts sees that jump in jobs reflecting a demographic shift across the region as more companies look for safe havens for cash, and as individuals need help managing their investments.

Not all area financial institutions followed the same job growth cycle during the past four years.

For instance Sterling Bank, Spokane County’s 23rd-largest employer, went through wholesale management reorganization and needed significant infusion of federal dollars to survive the bank crisis.

But its jobs numbers didn’t bounce around much. In 2009 the total Sterling headcount was roughly 2,660, and today it’s 2,615.

In Spokane County only, its headcount is roughly 585 compared with 612 in 2009.

The layoffs that swept through financial services locally made hiring a little easier once the rebound started, said AmericanWest’s Kisting.

A number of national banks, such as Wells Fargo and Bank of America, moved some services from Spokane to Seattle. Workers who stayed in this market were able to jump to new banks once hiring resumed, Kisting said.

But in the past several months hiring has become competitive, even requiring AmericanWest to go through national searches for people with the right skills, he added.

The bank’s recruiters now have launched a program to meet with potential employees at area universities. “There is a lot of competition for the types of people we’re looking for,” Kisting said.

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