Washington Federal Bank expanding back-office operations in Boise

Washington Federal Bank’s headquarters will remain in Seattle, but the bank is expanding back-office operations in Idaho because of lower costs.

“The bank realized that continuing to house our back-office operations in Seattle was not going to be cost-efficient,” said Tom Van Hemelryck, region president for the bank. “Like most companies, you look for ways to be more efficient.”

Washington Federal has 236 branches in Washington, Oregon, Idaho, Utah, Nevada, Arizona, Texas and New Mexico, 24 of which are in Idaho.

The bank already has a small multistate operations center in Boise to perform functions such as deposit operations, check processing and debit card support. Currently, the bank has 117 back office staff there — an increase from 53 in 2018 — and will be adding another 17 in areas such as fraud prevention, for a total of 260 Idaho employees, Van Hemelryck said.

Washington Federal is currently housed in a four-story building at 10^th and Idaho in downtown Boise, which it remodeled five years ago, and has a branch on the ground floor. The building houses legal and IT staff, as well as Van Hemelryck’s office.

To add the new staff, the bank has purchased the Bodybuilding.com building near the intersection of Cloverdale Road and Chinden Blvd., and will lease back some of it to the company for the next five years. The 98,574-square-foot building is also being remodeled to help Washington Federal add more staff, a project that’s expected to be completed later this year.

Once that’s done, the bank could add another 100 employees over the next few years, Van Hemelryck said. In addition, the 11-acre parcel has space the bank could build on, he said.

Van Hemelryck said he wasn’t able to reveal the price, but the bank said in January that it had paid $15.2 million. “We got a smoking deal on it,” he said.

Lease rates in downtown Seattle are $35 per square foot, while lease rates in downtown Boise are in the $17 range, he said.

Trent Wright, president and CEO of the Idaho Bankers Association in Boise, said banks are trying to do more with less and meet rising customer expectations. He said he hadn’t heard of any other financial institutions moving their support offices to Idaho from out-of-state regional institutions, but he wasn’t surprised to learn of Washington Federal’s plan.

“All banks have worked to address challenges in recruiting and retaining a talented workforce,” Wright said. “Idaho provides such a wealth of talent in our workforce that other states just can’t compete with. Coupled with our high quality of living and lower housing costs, Idaho is the clear choice for business relocation.”

The bulk of the new hires will be from the Treasure Valley, but some will come from elsewhere. For example, Washington Federal’s head of commercial banking is also moving from Salt Lake City to Boise. “He had options of where to move, and Boise was where he wanted to go,” Van Hemelryck said.

Similarly, the bank’s head of money laundering is moving from New Jersey, and bringing staff with her, he added.

Setting up the back office in Idaho also saves money due to Idaho’s lower salaries; hiring people in Seattle means competing with big companies like Microsoft and Amazon, Van Hemelryck said. While Oregon has no sales tax and Washington has no income tax, those factors were less of an issue due to the lower overall cost of living in Idaho, he said.

“The people who move here from Seattle are ecstatic,” Van Hemelryck said, noting that headquarters is just a one-hour flight from Boise. “There’s younger people who came here and bought their first house and never thought they’d be able to. I think you’ll see a lot more of this. Companies are seeing this as a great place to do business.”