When many financial institutions shuttered during the Great Depression, Washington Trust Bank remained open. And when the Great Recession hit banks particularly hard about a decade ago, it managed to weather the storm, solidifying its place as Spokane’s oldest and largest privately owned bank.
The 117-year-old bank, led by the Stanton family for 100 years this month, has grown to more than $6 billion in assets and 1,000 employees with 42 branches in Washington, Idaho and Oregon.
After a career as a meatpacker, E.H. Stanton and his son, Fred, purchased controlling interest in Washington Trust Company in 1919. Fred was named the bank’s president in 1941.
Philip Stanton, Fred’s son, assumed the role as president in 1962, becoming the youngest bank president in Spokane at the time at age 31.
When Philip retired in 1990, his son, Peter, assumed bank leadership at 34 years old – the second-youngest CEO and chairman in bank history.
Peter Stanton, who is the fourth generation in the family to lead Washington Trust, attributes its success to financial conservatism and emphasis on customer service.
“(My grandfather) was fiscally conservative and he knew that to be a good business, you had to be around and be profitable,” Peter Stanton said. “He was a smart guy and stayed the course, and said, ‘We are going to be here for our customers and be prudent.’ ”
Not for sale
Washington Trust was founded in 1902 as the Washington Trust Company by the late M. B. Connelly, J. Grier Long and R.L. Webster. Connelly was the bank’s first president. The three men capitalized the institution at $50,000, according to a Spokane Daily Chronicle article from 1952.
Connelly bought a building at 113 N. Wall St. in 1906. However, because he thought the number 13 was unlucky, he switched the bank’s address to an adjacent site. The bank eventually outgrew its building at 115 N. Wall St. and moved to Riverside Avenue and Post Street in 1910.
When rumors surfaced the bank was for sale in 1929, Connelly quickly shut them down.
“This bank has always been managed conservatively. Its growth has not been spectacular, but it has been steady and sure. This bank employs 41 persons and these people have helped to build this bank,” he said in a Spokane Daily Chronicle article. “I feel there is a duty owed them to remain independent. It is because of these various reasons that our answers to those who importune us is that the Washington Trust Company is not for sale.”
The National Bank of Commerce – predecessor of Rainier National Bank – made an offer to purchase Washington Trust in 1972, but the Justice Department filed an anticompetitive lawsuit. By the time it was resolved, both banks had abandoned the deal, Stanton said.
“It’s the only time in history there was a potential sale of the company,” he said.
Open for business
After Washington Trust moved its headquarters to 715 W. Sprague Ave. in 1932, it went through what Fred Stanton described as the bank’s “finest hours.” It was the only bank that remained open in Spokane during a statewide three-day bank holiday when transactions were suspended during the Great Depression, according to a 1952 Spokesman-Review article.
The federal government on March 6, 1933, wired all banks to suggest they close their doors to retain remaining assets. Washington Trust closed, but was open again a few days later. Persistence paid off for the bank, which grew deposits from $2.5 million to $3 million three months after the bank holiday, according to the article.
The financial institution opened its first drive-thru window at Second Avenue and Wall Street in 1950, and changed its name to Washington Trust Bank in 1951. It built its 16-story office tower and current headquarters at 717 W. Sprague Ave. in 1974.
Five years later, it had grown to more than 14 branches and $254million in assets.
By the time Peter Stanton joined the bank in 1982, it held more than $400 million in assets.
With a series of mergers with The Columbia Bank and Northern State Bank in the mid-1990s, Washington Trust expanded its presence to central Washington and northern Idaho. It also began ushering in new technology such as enhanced ATMs, a telephone bill-paying service, a website and online banking.
“The banks that resisted technology aren’t around anymore,” Stanton said. “We feel we have to offer the same products and technology of big banks and we can augment it with a personal touch that big banks can’t match.”
Washington Trust had expanded into the Oregon market by the mid-2000s with the opening of a private bank and commercial office in Portland. It also expanded into the Western Washington and other Idaho markets, and acquired Oregon-based Pinnacle Bank in 2009.
The Great Recession
The Great Recession was a challenge that forced closure or acquisitions of several banks in the state, Stanton said.
Sterling Savings Bank, a Spokane-based publicly traded financial institution that was twice the size of Washington Trust, was acquired by Portland-based Umpqua Bank in 2014. State regulators in 2011 closed Colfax-based Bank of Whitman, which had a large presence in Spokane. Its assets were purchased by Tacoma-based Columbia Bank.
Stanton said if banks issued a mortgage loan in the years leading up to the Great Recession, it was a risk.
“(Washington Trust) was more conservative going into it and we got through that time with no losses,” he said. “We wrote off a lot of real estate loans, but not enough to go negative. But, we came close. Over the course of three to four years, we worked our way through it. It was a very difficult time, but we’ve emerged stronger than ever and done a great job ever since.”
A family of bankers
After graduating with a master’s degree in business and economics from the University of Washington, Peter Stanton began his banking career at Rainier National Bank in Seattle, which had a large regional presence at the time.
Stanton, at 25 years old, returned to Spokane in 1982 and took a job at Washington Trust.
Stanton said he was never expected to join the family business, but found he really enjoyed working for banks in Seattle while attending college.
“You helped lots of different companies and helped people prosper, particularly on the commercial side,” he said. “Even though there was no pressure to come back to the family business, I probably knew, deep down, I certainly had an opportunity if I wanted to take it.”
Stanton said he took the stewardship approach when managing the privately held bank, which didn’t take the same risks as publicly held banks and isn’t driven by earnings reports. That approach allowed the bank to grow organically rather than through acquisitions.
“We really think that being a community bank and being in Spokane is a good thing. We have offices now in Boise, Portland and Seattle, but I think it’s more about being a privately held bank that can really commit to the community where we do business,” he said. “We enjoy giving back to the community. My grandfather and father really preached that – to take care of community, that helps you prosper.”
Washington Trust purchased the 18-story Wells Fargo building in downtown Spokane from Inland Northwest Health Services for $24 million in April to provide employees with more office space.
Stanton said the bank will continue to grow organically as well as train and promote employees while serving the community.
“I don’t see us moving outside the Pacific Northwest in any huge way,” Stanton said. “It’s certainly not a very exciting strategy, but it served us well for a lot of years and we are going to continue marching down that path.”
Stanton said although his stepson and a handful of relatives are working at Washington Trust, he has three children who are not interested in becoming bankers.
While Stanton has no plans to retire anytime soon, it isn’t out of the question that a nonfamily member could assume leadership of the bank in the future, he said.
“We have 1,000 employees, so the next group of leadership will come from who is doing the best job internally,” Stanton said.
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