Washington Trust Bank expects to open three branch offices within the next year in Coeur dAlene and Boise, and the Spokane-based institution is continuing to look aggressively for other new branch locations in its system, President and Chief Operating Office Jack Heath says.


Also, Washington Trust expects to seek full branching authority next year in Oregon, where it now operates just one branch, in downtown Portland, Heath says. While housing has been overbuilt in Bend, Ore., local economies in several other Oregon cities, including Medford and Eugene, are strong, Heath says.


With subprime lending problems pillorying many major U.S. banks, and with Federal Reserve interest-rate changes altering the landscape in the finance sector, for Washington Trust to explore expansion possibilities might be seen as a bit of a contrarian view, Heath says.


Yet, he says, the Pacific Northwest markets in which the bank does most of its businessSpokane, Seattle, Portland, and Boiseall are still growing and strong compared with the East Coast and the Southeast.


Youve got to continue to invest, Heath says, adding that otherwise, it can be hard for an institution to catch up with growth when the economy rebounds.


Washington Trust has yet to decide exactly where it will put its new branches in Coeur dAlene and Boise, or how many branches it will open in each city, but Heath says he believes the bank will open three offices in all next year.


Where those branches will be located will depend on whats available in terms of sites, he says.


The bank had said a year ago that it planned to build a branch in Rathdrum, Idaho, in late 2007, but hadnt decided on its plans for an acre of land it owns in Hayden, Idaho.


We did already acquire some property in Rathdrum, Heath says. Were doing some planning on it, but Washington Trust wont open a branch there or in Hayden next year, Heath says. In addition to those two sites, it also has acquired two parcels in the Boise market, he says, explaining that the bank likes to buy desirable sites when they become available even if it doesnt have immediate plans for them.


The banks Seattle and Bellevue, Wash., offices continue to do well and now account for $500 million of Washington Trusts $3.5 billion in assets, although the bank has decided against building a branch network in the Puget Sound area because of high land costs and a need for 20 to 30 branches to cover the market, Heath says.


The bank also has $500 million in assets in Boise, where it operates a seven-branch system, and $100 million in assets in Portland, he says.


Even though Washington Trust has just one Tri-Cities branch, in Kennewick, Wash., thats another place that were looking at very, very aggressively for potential new branch sites, Heath says. The per capita income in the Tri-Cities because of the amount of research thats done at Hanford is very, very high, he says.


The bank is constructing a new branch in Airway Heights and opened a branch in downtown Sandpoint, Idaho, a couple of months ago.


Its up and running, but wed like to expand our presence there, Heath says.


The banks business has been bolstered by a surge in activity in its wealth-management group, which now manages $2.5 billion in customer-owned assets, Heath says.


Contact Richard Ripley at (509) 344-1261 or via e-mail at [email protected].