West Coast interstate becomes growth highway for Wash. bank

At $11 billion of assets, Washington Trust Bank has reached the size where many institutions seek to engineer a rapid-fire growth spurt, clambering to add enough scale to offset the revenue lost to the interchange-fee cap that comes with crossing the $10 billion-asset threshold.

Spokane, Washington-based Washington Trust is pursuing a different course.

The privately held company is focused on expanding organically closer to the coasts of Washington and Oregon. Though Washington Trust doesn’t rule out doing deals, it’s opted to pursue a slower, less-splashy strategy, according to President Kevin Blair.

“Our growth is de novo growth,” Blair told American Banker. 

“We feel like, from a cultural standpoint, we’re really a $10 billion, one-customer-at-a-time, one-employee-at-a-time [bank] in growing the organization,” Blair said. “It’s a bit of a unique animal.”

Washington Trust unveiled the latest installment in its Pacific Northwest expansion push this week, opening a branch north of Seattle in Bellingham, Washington. In the fall, it plans to open the doors on a new six-story financial center in Tacoma.

Those locations follow on the heels of a branch opening in Vancouver, Washington, in November.

Founded in 1902, Washington Trust has a substantial presence in Eastern and Central Washington, as well as in Idaho. But the company is no stranger to cities that are closer to the coast. It established branches in Seattle, Bellevue and Portland, Oregon, in the early 2000s.

Washington Trust began adding to that presence in 2020, opening a branch in Marysville, Washington, north of Seattle, and another in Bend, Oregon, the following year.

“This has been a multiyear expansion,” Blair said. “We’re looking at all of our markets within our footprint, but the largest ones are in that I-5 Corridor.”

The I-5 is one of the nation’s busiest interstate highways, spanning the entirety of the West Coast from San Diego to the Canadian border.

Washington Trust’s de novo strategy is similar to efforts by a number of banks, including many of the nation’s largest institutions, which are leaning into branch expansion plans as they enter new markets.

Columbus, Ohio-based Huntington Bancshares, for example, plans to open more than 55 branches as part of its move into the Carolinas. Meanwhile, Bank of America plans to open more than 160 branches over the next year, bulking up in markets like Milwaukee, Atlanta, Nashville and Boise, Idaho. JPMorganChase, the nation’s largest bank, is in the midst of a major, multiyear de novo expansion program. In February, it announced plans to triple the size of its branch network in Alabama, adding 24 locations. 

But Washington Trust’s strategy diverges from several other community banks that have crossed the $10 billion-asset mark via an acquisition. ConnectOne Bancorp in Englewood Cliffs, New Jersey, had $9.7 billion of assets when it announced plans in September to acquire the First of Long Island Corp. for $284 million in stock. The deal, which closed in June, increased the company’s assets to $14 billion.  

Similarly, OceanFirst Financial in Red Bank, New Jersey, used a pair of acquisitions to cross the $10 billion threshold in 2020.

The Durbin Amendment, part of the Dodd Frank Act of 2010, caps interchange fees for banks with $10 billion or more of assets, incentivizing deals that vault institutions over the threshold. 

Blair was raised in the Pacific Northwest and attended college in Seattle. He said he has witnessed the Seattle region, which was dominated by Boeing during his youth, grow significantly larger and more diverse with the rise of major corporations such as Microsoft, Amazon, Costco and Starbucks.

“Because of the economic environment here, it’s been a pretty healthy place to bank,” Blair said. “Going forward, I still see the strength here.”

In Tacoma, which is about 30 miles south of Seattle, the bank has purchased an office building where it plans to house a full-service team with capacities in commercial banking, private banking, investments, wealth management, mortgages and retail banking. “It’s a long-term investment,” Blair said. “All our business lines are there.”

Blair said Washington Trust would consider adding other Tacoma-area locations, but he did not provide a timetable. “That will be our vision for the future,” he said.

Tacoma’s population has been growing steadily in recent years, topping 225,000 in 2024, according to the U.S. Census Bureau. The largest bank by deposit market share in Pierce County, which includes Tacoma, is Umpqua Bank, which is headquartered there. Out-of-state regional banks control more than 60% of the $15 billion deposit market, according to the Federal Deposit Insurance Corp.

Washington Trust has been controlled by the Stanton family since 1919. Executive Chairman Peter Stanton represents the fourth generation of family members to lead the company.