Trust in Downtown: Washington Trust’s vision for its headquarters
Big Spokane bank endeavors to establish close-knit campusApril 11th, 2019
While Washington Trust Bank has yet to release its first quarter financial results, the bank has made some big investments recently that will support its growth in 2019, says longtime President and Chief Operating Officer Jack Heath.
“Last year we made $82.9 million in net income, which for us was a record,” says Heath. “Our customers have also been prospering, so loans and deposits have grown too, and we finished last year with $6.5 billion in assets.”
While he declines to speculate on exact figures, Heath says the bank has benefited from a strong economy and is expecting this year’s first quarter to show continuing improvement over last.
“The economy continues to be very strong and we’re certainly benefiting from that,” he says.
Heath says the Spokane market in particular has seen a lot of new customers who are attracted by economic investments like the new Amazon.com Inc. facility on the West Plains, and the Katerra Inc. development in Spokane Valley.
“That investment activity is lifting quality of life factors for people as they evaluate where they want to live and work,” he says. “We’re seeing more new customers choosing to move to this area, and we’re excited about where Spokane is positioned today.”
Heath says currently Washington Trust, which markets itself as the largest privately held, full-service bank in the Pacific Northwest, has over 1,000 employees, and operates 41 branches in Washington, Idaho, and Oregon.
“On a national basis, we’re within the top 10 privately held banks in the country, and among the top 110 in terms of size,” he says. “We’ve grown one customer, one employee at a time. It may be a slower path, but it helps create a culture that values people, which is important to us.”
At the end of last month, Washington Trust announced it has agreed to buy the 17-story Wells Fargo Center, at 601 W. First, in downtown Spokane, from Inland Northwest Health Services.
Heath declines to disclose the terms of the transaction, which is expected to be completed April 19. However, the Spokane County Assessor’s Office lists the assessed value for the Wells Fargo Center at $21 million.
Heath did say the bank felt the 192,000-square-foot building’s purchase price was significantly below replacement cost, and the quality of the building as well as its location across First Avenue from Washington Trust’s headquarters building were both ideal.
“In the last 10 years, we’ve done a lot to grow our back office operations here, and rented space throughout downtown to accommodate it,” he says. “What we’ve found is that our employees really enjoy the convenience of downtown, and a campus is key to our culture, so we made the decision to stay here long term.”
Heath says Washington Trust currently leases two floors in the Chase Financial Building, at 601 W. Main, one floor in the Holley-Mason Building, at 157 S. Howard, and a half-floor in the Peyton Building, at 722 W. Sprague.
“They’re all great buildings with fantastic office spaces, but they’re just not congruent to campus,” he says. “With our tech operations center up on Second Avenue near our banking branch there, we’re scattered throughout downtown.”
Heath says the plan is to slowly move several of the bank’s noncustomer-facing departments, including its loan service center, call center, marketing, and audit groups, to space in the Wells Fargo Center as their leases expire.
“We expect to be able to quickly occupy five floors of that building, and continue to build it out over time,” he says. “We anticipate keeping all the building’s other tenants, as well as the signage.”
“Some have questioned purchasing a building with the Wells Fargo name,” he adds. “But they’ve been a great competitor and we’re comfortable having our back office support in a building still branded with their name.”
Heath says all of the building’s current tenant leases will transition to Washington Trust. Two of the building’s larger tenants, INHS and Providence Health Care Foundation, will move over the next three years to a new location.
Heath says the bank is still planning how best to use the new space but hopes to enhance some of the building’s current amenities and add a coffee shop.
“We’re in the midst of planning, so those enhancements would occur over the next year or so,” he says. “The biggest benefit will be having all of our employees working in closer proximity.”
He says Washington Trust will keep its client-facing employees based at its headquarters at 717 W. Sprague, which also is set to undergo a significant remodel within the next year.
In consolidating its various office spaces into a central, downtown campus, Heath says Washington Trust also considered the challenges in committing to the location.
“There was a lot of discussion by our executive committee about potential challenges, one being the homeless population,” he says.
“Ultimately we decided that in spite of the challenges, the long-term outlook for downtown is strong, especially with recent investments like the M Apartments developing, and larger companies like Nike bringing their business in,” he says. “Downtown is where we want to be.”
Over the last two years, Washington Trust has replaced its Manito Branch, and remodeled two others here. At the same time, the bank also re-trained its employees in the “Financial Concierge” concept, to give them more financial experience and greater ability to assist customers.
Heath says the switch to a financial concierge approach has been a positive move, for both the bank’s customers and its employees.
“This model allows us to adapt to customer needs more quickly, which has resulted in accelerated service. At the same time, it’s also created more opportunities for employees to learn and grow,” he says.
Heath says the bank has also invested heavily in new technology to give customers quicker access to information and guidance through financial transactions.
“Some of the things we’ve invested in include mobile banking, commercial cash management services, and the process of opening accounts,” he says.
He says Washington Trust plans this year to roll out a new commercial cash management system, a new credit card, a new debit card, and a new merchant services platform.
“We’re really investing in our delivery system to ensure all of our touch points with clients are the best they can be,” he says.
Heath says Washington Trust doesn’t have any big plans to expand outside its current footprint, but it’s looking to continue investing in three areas; new technology, employee empowerment, and community needs.
“We see plenty of opportunity for growth in our current marketplaces, and feel we’re well positioned to continue to leverage the great people we have and the relationships we’ve established,” he says.
“At the same time, we recognize there are lots of challenges and needs in our communities, and we want to continue to make a difference there too.”
When it comes to supporting the community, Heath says the bank has participated in several capital campaigns to support projects like the Ronald McDonald House expansion and the Spokane Guild School’s relocation.
“We want to support growth that’s consistent and sustainable, that allows people to invest around infrastructure and help maintain that quality of life we all love so much,” he says.
Heath says the bank also hosts several of its own programs, including a partnership with the United Way that helps low-income people access a tax credit for daycare.
“We allow United Way to use our call center to schedule appointments that enable folks to meet with a counselor who can help them to file for and receive that tax credit for childcare,” he says. “We find programs like that exciting, and are happy to help hard working, low-income people with those processes.”
He says the bank also supports the arts and economic development activities.
“We strongly believe if you want to live in a community, and you want it to prosper, you have to be an active participant,” he says.
“It’s something we try to incorporate into our culture by initiating programs to help at-risk populations and encourage financial education, but also through inspiring our employees to be involved in the causes they care about.”
Although Washington Trust is expecting another successful year, Heath says bank officials continue to watch for signs of a recession.
“We know a recession is on the horizon, but it’s not clear just when that will happen,” he says. “So, we’re taking the opportunity during this time to reinvest some of those tax cut dollars back into our business for the long term.”
Heath says the bank also faces challenges in recruiting employees, as unemployment rates are still quite low, with the U.S. Bureau of Labor and Statistics listing Spokane County’s unemployment rate at 6.5 as of February.
“It’s harder to recruit talented individuals, but that’s a good challenge to have,” he says. “Going forward, I think we’ll need to focus on bringing in higher-paid jobs and raising the mean income in our markets, so we can begin to better address key community issues like homelessness.”