ASG Partners' interview with Scott Luttinen, President, Washington Trust Bank, Western Washington Region
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How does commercial financing fit within Washington Trust Bank’s overall business?
Commercial financing, including acquisition packages, is a core segment of our business. In fact, Washington Trust Bank is the largest, privately held commercial bank in the Northwest and we’ve handled commercial transactions since our beginnings in 1902. Our greatest reward is witnessing the growth and prosperity of our Northwest client businesses; we draw great satisfaction in providing the tools and counsel that makes this success possible.
One of the ways Washington Trust Bank has maintained a commercial banking stronghold, despite increasing banking choices, is our team of locally based (in each market we serve) financial experts that brings a wealth of relevant market knowledge and experience. Having versed, local decision-makers that understand firsthand the unique opportunities and challenges in their markets make it possible for us to be more nimble than our commercial competitors, and able to respond quickly and effectively to our clients’ needs.
Washington Trust Bank also offers personal banking, small business banking, real estate financing, and wealth management services making it easy to bank comprehensively in one place.
What kind of an impact - if any - has the "credit crunch" had on Washington Trust Bank’s commercial lending practices or criteria?
Washington Trust Bank has remained relatively insulated from the impact of the national credit crunch, especially in the areas of commercial lending. Our commercial financing criteria have held fast, our commercial banking activity remains constant, and we’re fortunate for the deep relationships we’ve established in the Northwest. Washington Trust Bank’s strong financial position allows us to serve the financing and banking needs of our customers.
Our deep relationships with business leaders and commercial banking clients are predicated on transparent and responsive communication; we’re here to answer questions and quickly respond to concerns. We’re also fortunate in not deviating in our careful, thoughtful lending practices, which is why our clients and their assets remain secure despite uncertain economic climates.
What is Washington Trust Bank hearing from its clients about the state of the economy in the Northwest?
Our commercial clients are cautious, but tell us they are optimistic that better times are on the horizon. There is a reserved “watch and wait” calm in the marketplace but our clients are conducing business as usual. On the whole it’s clear that everyone is seeking value with every dollar they spend. Businesses are looking for ways to stretch their dollars, to bring their own clients more value and to be indispensable in the products and services they provide, without compromising their bottom lines.
We’re hearing from our commercial clients that they are using this time to take inventory on how they’re serving their own clients, and evaluating how they can more effectively and efficiently operate their own businesses—which we’re happy to advise.
What new advice is Washington Trust Bank offering its commercial clients given the current credit/economic environment?
Think strategically. Use any downtime to cultivate new relationships and maintain those you’ve established —don’t be afraid of the phone and making personal visits to clients.
Proactively collect on accounts receivable. "Proactive collections," such as placing a courtesy call to customers a week after their invoice has been mailed out. The call is used to verify that the customer received the appropriate shipment or service and that the invoice detail was correct.
Arm yourself with measurements. On an operations level, with focus on cash flow, use your accounting tools to take a hard look at sales, outstanding balances, percent of current invoices and make projections that are relevant to your current performance. This, combined with commercial banking tools such as Washington Trust Bank’s eBusiness Express, can help you make holistic, educated forecasts.
On a service level, zero in on the needs of your existing clients base (i.e., surveys and focus groups) and make sure your company is meeting your client’s expectations.
Make sure you understand and are compensated for the risk you are incurring. One of the problems encountered by businesses that are currently experiencing trouble was that they took on risk that they either didn't understand or for which they didn't get sufficiently compensated. Risk presents opportunities as long as you understand the risk and price it appropriately.
Make sure your financial house is in order. Explore avenues to enhance your financial resources and flexibility. We consult with our clients on this type of planning throughout all business cycles. Our goal is to be a valued financial partner to all our clients.
What other changes/trends are likely to affect commercial banking clients in the next few years?
The economic climate will continue to have the most noticeable effects on residential and land developers. Although our markets have softened, they continue to perform well compared to other parts of the country where values have significantly declined. In challenging economic times banker-client relationships will intensify with clients exercising more scrutiny and dependence on the stability of their bank than ever before, and clients will increasingly seek the assurance of a stable bank. Personal relationships and advisory services offered from experienced commercial bankers who have a solid understanding of your business and market are going to make a difference in the confidence of clients in the long term. Washington Trust Bank is an enviably stable position to weather such change right alongside its clients and help them navigate through the uncertainties.
For more information about Washington Trust Bank, visit Washington Trust's web site.
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