Spokane-area bank and credit union executives expect gains in both loans and deposits next year, although they caution that rising interest rates could slow that growth slightly.


Were optimistic about 2006, and have good reason to be, says Bill Zuppe, board chairman and CEO at Spokane-based Sterling Savings Bank. Moderate increases in interest rates will have a cooling effect, though.


Zuppe says the bank anticipates double-digit growth in loans and deposits next year. Between November 2004 and November 2005, its total loans grew by nearly 13 percent and deposits rose by 21 percent. The bank has about $6.8 billion in assets.


Sterling plans to open branches next year in locations that include Liberty Lake and Kirkland, Wash., bringing the banks total number of branches to 142 in Washington, Oregon, Idaho, and Montana. That doesnt include other planned branches that Zuppe says he isnt able to disclose yet.


He says he expects the financial-services industry here will experience robust growth in 2006, particularly because credit quality has improved and a significant amount of capital- investment money has been poured into the Spokane area in the last few years.


I look at the lay of the land in downtown Spokane, and it speaks well for the sense of confidence in our future thats pretty darn exciting, he says.


John Wagner, president and CEO of Farmers & Merchants Bank, also says the Spokane market looks healthy for 2006, and that the bank anticipates 10 percent growth in loans and deposits next year. Wagner anticipates it will have $310 million in loans and $312 million in deposits by the end of 2005.


Farmers & Merchants commercial lending is likely to grow next year, although residential real estate activity is expected to flatten out, he says.


Dennis Cutter, president and CEO of Spokane-based Numerica Credit Union, says the credit union expects its total loans to grow more sharply next year than they have this year, particularly in the area of commercial loans.


The only uncertainty thats clouding the credit unions 2006 forecast involves a potential cooling of the home market.


Even though rates are going up, people will rise to the occasion and still need to buy houses and cars, so I think the economy is going to be better in 2006, he says.


Spokane-based Horizon Credit Union plans to complete a merger with Columbia Basin Federal Credit Union in February, which will add three Horizon branches in the Moses Lake area, says Brian Grytdal, its vice president of marketing. Columbia Basin has 7,500 members and about $50 million in assets, Grytdal says. Horizon has 14 branches.


Horizon anticipates steady business growth and a stable economic climate here next year.