More banks join bandwagon to raise pay after tax savings
Four additional banks have announced plans to give employees a raise or pay a one-time bonus after Congress approved a large corporate tax cut.
Washington Federal in Seattle, Florida Community Bank in Weston, FirstCapital Bank of Texas in Midland and Western Alliance Bancorp. in Phoenix each unveiled plans to boost worker pay.
Earlier, Fifth Third Bancorp in Cincinnati and Wells Fargo in San Francisco announced raises and bonuses.
Congress passed the tax overhaul this week, and President Trump is expected to sign it in the coming weeks. The legislation reduces the corporate tax rate from 35% to 21%. Banks have been facing questions about how they plan to use their additional profits.
The $15 billion-asset Washington Federal plans to give a 5% pay raise, on top of normal merit increases, to all employees in good standing who currently earn less than $100,000 per year. Those employees comprise about 94% of the company's workforce. Washington Federal announced the plan late Wednesday afternoon.
Washington Federal also plans to create a second technology hub in Boise, Idaho, and increase its overall technology staffing by 25%. Additionally, the bank will accelerate its planned investments in technology and boost employee training.
“We’re very pleased and supportive of the legislation, so we wanted to say, `Here’s what we’re going to do to spur investment in our communities,'” Beardall said in an interview.
Washington Federal paid income taxes totaling $82.7 million during its 2017 fiscal year, which ended Sept. 30, spokesman Brad Goode said Thursday. The company reported net earnings of $173.5 million for the 12 months.
The $10 billion-asset Florida Community Bank will raise its minimum hourly pay rate to $15, the company said in a Thursday news release. The bank did not disclose its current minimum pay rate.
“Our employees are the face of our Company and are the foundation of our strength in serving our growing client base with exceptional dedication and care,” CEO Kent Ellert said in a news release.
At the $1.1 billion-asset FirstCapital, 197 employees will receive a $500 bonus before the end of the year; the bank had 205 full-time employees as of Sept. 30, according to its call report. The bank's chairman, Ken Burgess, is the current chairman of the American Bankers Association.
The $20 billion-asset Western Alliance also plans to give raises, especially to workers who earn less than $75,000 a year, the company said. Western Alliance did not provide additional details in an announcement posted on its website.
Separately, the $4 billion-asset Camden National Corp. in Maine provided insight into how much the tax bill could cost the bank. Camden will write down the value of its deferred tax assets due to the lower tax rate. For each 1 percentage point decrease in the corporate tax rate, Camden’s diluted earnings per share will be reduced between 6 cents and 8 cents. The tax bill cuts the corporate rate by 14 percentage points, so Camden's earnings per share figures to decline by between 84 cents and $1.12.
Most banks are expected to record a fourth-quarter charge to write down the value of deferred tax assets. Analysts expect more banks to disclose the estimated amounts of these charges soon after the beginning of the year.