The financial-industry crisis and recession are causing banks and credit unions here to rethink their branch expansion plans.

Some financial institutions say they've decided to pull back on plans for new outlets, while others are completing current projects but taking a cautious approach to embarking on new ones.

"Nobody's making new dirt," says Edward Neunherz, a senior vice president at Global Credit Union here, which bought a potential branch site on Spokane's North Side last year, but says now it has no immediate plans to build there.

Walla Walla-based Banner Bank, which last July said it had envisioned adding between five and seven new branches in the Spokane area over the next few years, now says that aside from completing its new downtown Spokane branch, it has no plans anytime soon for new locations in the Spokane-Coeur d'Alene area.

"It would be safe to say that we are taking a look at opportunities for branching, but have no firm plans, as the economic times" indicate a conservative approach is best, says Doug Bayne, a Walla Walla-based vice president and director of marketing for the bank.

Spokane-based AmericanWest Bancorp. announced earlier that it's scaling back its branch network as part of a plan to reap $6 million in annual savings by streamlining its operation, including closing six underperforming branches out of 64 branches it operates overall on Jan. 30. Additionally, to save about $200,000 a year, the bank has reduced the amount of space it leases in its headquarters building, at 41 W. Riverside and subleased out the balance.

AmericanWest spokeswoman Kelly McPhee says the bank has had to make tough choices in its effort to survive the economic downturn and stem its losses.

One exception to the more conservative branching atmosphere that's emerged here is Spokane-based Washington Trust Bank, which says it has budgeted for three new branches this year.

"We want to expand, so we're not going to slow down," says Susan Glover, a senior vice president and director of retail banking at Washington Trust. She says the bank opened new branches in Airway Heights and Nampa, Idaho, last year, and is looking for opportunities to establish three more branches in 2009, but hasn't decided yet where they will be located. Washington Trust currently has 16 branches in the greater Spokane area and 36 branches overall, she says.

Meanwhile, other financial institutions here say they'll complete new-branch projects that currently are under way, but don't expect to launch any additional projects soon.

Randall L. Fewel, president and CEO of Spokane-based Inland Northwest Bank, says the bank is moving forward with plans to build a stand-alone branch in Spokane Valley, at the northwest corner of Sprague Avenue and Progress Road. That branch, however, will be a replacement for an in-store location in Yoke's Fresh Market, at 15111 E. Sprague, that included separate offices in the same building for a mortgage center and a branch, allowing the bank to consolidate the offices, Fewell says. ALSC Architects PS, of Spokane, is designing the 3,800-square-foot building, which will have three drive-through lanes, he says. Inland hasn't selected a contractor for the project yet, but hopes to open the new building by the end of this year, Fewell says.

"That will fill out our footprint very nicely," Fewell says.

Inland Northwest Bank currently has 12 branches, including seven in the Spokane area. The Spokane Valley branch is its last remaining grocery store branch, Fewell says.

Beyond the replacement branch in the Valley, the bank currently doesn't have plans in the works for any additional branches, Fewel says.

"If we did, we probably would have postponed them at this point," he says.

It's fortuitous that the bank already added or relocated several branches during the last couple of years, Fewel says, adding, "There's no good timing for a recession, but I do think INB will be very well-positioned with these branches."

Wheatland Bank, which has increased its branch footprint by 44 percent—to 13 branches—over the last year by adding four branches, had planned to expand its presence in Spokane, but put that idea on hold last year because of expansion opportunities that came to the fore in Central Washington, says Susan Horton, the Spokane-based bank's chairwoman, president, and CEO.

"We will be expanding our presence here; we just have to catch our breath," she says. "Spokane is still in the strategic plan for more expansion in a year or two. Our headquarters is here and our executive team is here."

Horton says that one factor allowing Wheatland to put off expanding in Spokane is that advancing technology, such as online banking and direct deposit, make the bank more accessible to customers who don't have a branch nearby.

"Even with just three branches in Spokane we had solid growth in deposits" in 2008, she says.

Horton says that while Wheatland doesn't plan to add branches in the near term it recently bought the building that one of its Central Washington branches was leasing and is seeking land or a building to buy for another branch it opened recently in leased space in Wenatchee.

Holding off

Seattle-based Washington Federal Savings said last July that it might open a branch in Liberty Lake, but now says it will view the property it bought there as an investment for now. It might be used for a branch eventually, but not in the foreseeable future, says bank spokeswoman Cathy Cooper.

Aside from two new branches it recently opened in Nevada, "We're pretty much done for now," Cooper says. She says that decision definitely is related to the poor performance of the economy, but asserts that the bank never has had definite plans to develop the land it purchased at Liberty Lake.

"Right now, we have it land-banked," she says.

Meanwhile, Spokane Teachers Credit Union, which bought property in Airway Heights last year, won't be building a branch there anytime soon, says spokeswoman Keely Barrett.

Still, Barrett says the credit union isn't pulling back on any branching plans, adding that the Airway Heights land was purchased as an investment, rather than for a near-term branch project. She says the big credit union plans to open a new branch this spring at Northtown Square, a shopping center currently under construction across the street from NorthTown Mall.

"We're very excited about that (Northtown Square) branch," Barrett says.

Also, Teachers last week opened a new Bonner County branch in space it's leasing in Ponderay, Idaho, near Sandpoint. It's the credit union's thirteenth facility and employs three people, Barrett says.

Global Credit Union's Neunherz says, "We're still growing into what we have." Global opened a new branch in Spokane Valley last year, and is relocating its Coeur d'Alene branch. He says Global seized the opportunity to buy property on U.S. 395 in North Spokane last year and plans to hold onto it until it needs it.

"When an opportunity shows itself, and you're looking to expand," it makes sense to grab property that might not be affordable later, he says.

Also, Global eventually expects to build a branch there, but for the time being is just watching for opportunities, Neunherz says. Right now it's considering expanding its current Shadle Center branch, but hasn't completed any plans yet, he says.