WESTERLY – As banks across the region and nation look to scale back on brick-and-mortar branches, The Washington Trust Co. is looking to expand its footprint as a key way to grow its share of deposits.
The Westerly-based bank plans to open its 24th branch, in East Greenwich, later this quarter, Edward O. Handy III, company chairman and CEO, said in an earnings call on Thursday. While no further branch openings have been announced, the company continues to eye brick-and-mortar branches as a key way to achieve its goal of increasing its share of deposits.
Like other financial institutions across the country, Washington Trust saw a significant growth in in-market deposits during 2020 – up 18%, or $573 million, over the prior year. This stemmed from a combination of the $200 million in Paycheck Protection Program loans the company acted as the lender for, as well as increases in customer savings amid a time of economic volatility and inability to spend on commodities such as travel and restaurant dining.
Mark Gim, president and chief operating officer, said the company saw similar increases in deposits during the 2008 economic crisis.
“When interest rates are low, consumers feel safer leaving money in the bank,” he said in an interview with Providence Business News on Thursday. “Also, many of the things they might want to spend money on – travel, hospitality, restaurants – are not options right now.”
Despite reports suggesting the pandemic has accelerated a shift toward digital and mobile banking, Washington Trust has not seen activity at brick-and-mortar branches decrease much – particularly when it comes to opening loans or new deposit accounts – in the last year, Gim said in an interview with Providence Business News.
Of the 23 branches, 12 have more than $100 million in core deposits, and six have more than $200 million in deposits, Gim said in the earnings call.
As Washington Trust looks to continue deposit growth in the coming year, new branches may be a key part of that strategy, particularly in untapped markets such as northern Rhode Island along the Interstate 295 corridor, as well as the East Bay, where the company’s presence is limited to two branches in East Providence.
“We feel having a branch location is really a sign of community commitment and also necessary as a place for customers to come in,” Gim said, naming the PPP loan process as an example of the kind of complex transaction that benefits from in-person services.
Other regional banks, including Citizens Bank, Webster Bank and Berkshire Bank, last quarter announced plans to close a number of brick-and-mortar locations across the region.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
