A dew-covered sprig of wheat reaches for the sun on Wheatland Banks recently released annual report, which proclaims the seeds are planted.


The message is on the money, for Wheatland has put up a number of promising new seedlings, more than doubling its branch network, to nine offices from four, since 1999.


The growth of the longtime wheat-country institution is being led by a bean counter, certified public accountant Susan Pittman Horton, Wheatlands president, CEO, and chairwoman.


Weve toyed around with the thought of being a regional bank, either by expanding to the east, into North Idaho and Western Montana, or to the west, Horton says.


The bank hasnt approved either ambitious plan yet, but is due to hold a strategic-planning session this fall, when it will have completed the third year of its current three-year plan.


In 2001, the Davenport-based bank built three new branches, entered the Spokane and Moses Lake markets, moved its administrative and corporate officers to an office that it opened in downtown Spokane, and boosted its assets by 16.8 percent, to $112 million from $95.9 million. Its deposits also shot up, to $95.9 million from $83.9 million, for a 14.5 percent jump.


At the end of 1998, just before Horton took over, Wheatland had $84.7 million in assets and $74.6 million in deposits and employed 39 people. It has 56 employees today.


Last year, at age 40, Horton also had her first baby, Alexandria Rose, and she quips, We went to nine branches from five branches; I was pregnant, too, so I expanded in many ways.


Accountants are supposed to be ultracautious number crunchers, not setters of bold new directions, but Horton has implemented one new idea after another at Wheatland.


The banks next big decision will be whether to expand to the east or the west.


To open new branches in Idaho and Montana or to acquire institutions that already are there, state-chartered Wheatland would have to change its charter, Horton says.


It wouldnt have to do that to go west. Were already in Moses Lake, and we may look at the Tri-Cities, Yakima, and points farther west, she says.


The bank doesnt plan to open another branch until 2003, but our next step is north Spokane, then perhaps the central Spokane ValleyWheatland already is at the Spokane Valley Malland maybe the South Hill.


In the city center, Wheatland has obtained a first right of refusal on the downtown-branch space of AmericanWest Bank at 222 N. Wall. AmericanWest said recently that it will move its branch to a new downtown building to be constructed next year. Horton says that as soon as she learned that, she locked up the space downstairs and negotiated to get a Wheat-land sign put up on the exterior of the building, even though AmericanWest wont move for some time.


Last year, Wheat-land moved its executive team from Davenport to the third floor of the same building, of which Horton says her husband, Stan Horton, is a one-fourth owner.


Horton isnt certain yet whether Wheatland will open a downtown branch in the AmericanWest space or choose another site, but says that Wheatland, which is taking deposits at its downtown offices, will have a city-center branch.


Downtown is a tough market, she says. Parking is tough. But we still believe you have to have a presence in downtown Spokane if youre going to be taken seriously.


Horton joined Wheatland in February 1999, a decade after she returned from Seattle to join McFarland & Alton PS, the longtime Spokane CPA firm. The 1984 Washington State University graduate had been working in Seattle for a national CPA firm.


When she came to McFarland & Alton, the firm had one bank client, the little LaMont Bank of St. John.


I got in my car and started driving out to meet the presidents of all of these little banks, Horton says. Sometimes, it took two or three years for them to let me do a proposal.


Lowell Ruen, tax partner at the Spokane office of Moss Adams LLP, which merged with McFarland & Alton in 1999, says Horton went after that community banking business with a vengeance.


Horton remembers something else about that period. It was a good time to learn what not to do. The S&Ls were failing, and banks were about to enter a feeding frenzy.


By the time Horton left McFarland & Alton, her financial-institutions team included 18 people and served 50 institutions. She had worked on initial public offerings and done other Securities and Exchange-related work, which brought her into contact with bank boards, including Wheatlands. When it came time for Wheatland to replace longtime President and CEO Dick Ludeman, who was retiring, the bank approached Horton.


Horton says then-Wheatland Chairman Roger Underwood, whom she had known since she was a child, told her, Youre in all these other banks, and you see the best practices everywhere. We want you to take this bank to a whole new level.


Horton, who by then had become a partner at McFarland & Alton, wasnt motivated to make the move at first, but Underwood persisted. He told me, Our offer is whatever it takesperiod. He even wrote that on a cocktail napkin. I still have it.


Horton accepted, and McFarland & Alton cashed her out. She says she knew some bank customers and employees would say, Shes a woman. Shes an accountant. Shes not from our industry. Underwood told her that while farmers would note her gender, their wives will love it, and they do the finances.


Horton directed each of the banks loan officers to set up farm visits with their five best customers. She told the loan officers she wanted to climb up in the combine with them and talk with them while they worked.


She invited every bank employee to have a one-hour meeting with her. That took months, she says.


Over and over, she says she heard the same two things: Youre going to sell the bank. Youre going to move the bank. Although her plans werent that drastic, she knew Wheatland had to change.


Implementing change


This bank didnt know what its problems were. If youre a financial institution, youve got to know what your problems are, Horton says. We didnt have e-mail, we didnt have voice mail, we didnt even have PCs for the staff to use. We had a very solid capital base, a strong customer base, and a great board, but we lacked so much.


She set to work improving budgeting, forecasting, and asset-liability management, which includes the timely investing of the banks reserves.


She brought in Allison Yarnell, who had been on her team at McFarland & Alton, to be the banks chief financial officer, and Joe Druffel, who had been at U.S. Bank for more than 20 years, as chief credit officer.


She embraced technology, installing a new imaging system that enables the bank to send customers 8-by-10-inch pages with copies of 10 checks per page, which is cheaper than returning checks. She launched Internet banking, with bill paying, three years ago. She knew the service wouldnt produce a profit, but believed it would attract and retain customers. Also, she says, it paved the way for online cash-management systems for small business, which Wheatland began offering early last year.


The banks employees told Horton customers wanted more access to ATMs. The bank had just two of the machines, which cost $45,000 apiece. Rather than buy more of them for its older branches in Davenport, Odessa, Ritzville, and Wilbur, the bank offered to reimburse each customer for up to $10 a month in fees incurred while using other institutions ATMs. That costs the bank less than $1,000 a month and gives customers access to ATMs everywhere, Horton says. Wheatlands new branches have ATMs.


The bank also didnt have free checking. When it implemented that service, the amount of money customers kept in non-interest bearing deposits soaredcutting the banks interest expenses by much more than the checking-fee income it lost, Horton says.


The bank had much of its loan base in dry-land farming, but diversified by opening branches in irrigated-farming country in Quincy, Wash., in 1999 and in Moses Lake in 2001.


We manage our risk, but were still in agriculture, and were making money at it, Horton says.


The bank now has frequent-flier credit cards, tiered money-market accounts, and $300 of overdraft protection for all customers. It offers securities through Richards, Merrill & Peterson Inc., the Spokane brokerage company, and insurance products through Big Bend Insurance, of Davenport. In both cases, it made more sense to outsource those services than to offer them in house, Horton says.


The top reason community banks get absorbed by other banks is that they have no succession plan, Horton says. Wheatland devised one in its strategic plan three years ago, she says. Also, the shareholders of many community banks become disenchanted because they have no liquid market for their stock. Horton set one up through Richards, Merrill & Peterson, which makes a market in the stock on a limited basis.


Im not saying that all of these ideas are unique, but theyre all new to Wheatland, thats for sure, she says.


Last year, earnings fell to $524,000 from a record $854,000 the year earlier. Though the bank budgeted for a decline as it sunk $3 million into its new branches in Moses Lake, the Valley Mall, and Cheney, the latter of which replaced a supermarket branch, it now intends to improve its profitability and return on equity, Horton says.


Over the next five years, her goal is to double Wheatlands size, which would make it a $250 million institution, Horton says. Meanwhile, she says shell also work at her most important role, to be a good parent.