If population surges and a hot real estate market werent proof enough, banking activityspecifically sharply rising loans and depositsprovide further evidence of rapid economic growth in Kootenai County.


Three Coeur dAlene-based banks all posted strong increases in loan activity in 2004, and marketwide, total deposits have surged.


Kootenai County is a star, says Kurt Gustavel, president and chief operating officer of Idaho Independent Bank, which started in Coeur dAlene 11 years ago. Its our most mature market, but its also still one of our fastest-growing markets.


Idaho Independent posted net income of $5 million for 2004, up 9 percent compared with 2003. The banks total loans shot up 23.5 percent, to $295.5 million, as of Dec. 31, compared with $239.2 million a year earlier, and its total deposits jumped 11 percent to $351.2 million in the same time period.


Coeur dAlene-based Mountain West Banks net income soared 44 percent last year, to $8.3 million. Its total loans, as of Dec. 31, were $389 million, up 23 percent compared with a year earlier. Its average deposits for 2004 increased 20 percent to $442 million.


Three-year-old bankcda, of Coeur dAlene, posted earnings of $73,000 in 2004, down from $115,000 in 2003. It attributed its lower earnings to costs associated with opening a new branch. The young banks loans, however, grew 41 percent to $35.3 million as of Dec. 31, compared with a year earlier.


Regional and national banks that have branches in Kootenai County also report strong growth there.


Wayne Schneider, community banking president for North Idaho and Eastern Washington for San Francisco-based Wells Fargo Bank, says growth in consumer and mortgage loans have kept pace with deposit growth at the banks six Kootenai County branches. Commercial loan activity in that market also has increased, says Schneider, who lives in Coeur dAlene.


For bank branches in Kootenai County, total deposits grew at faster clip than they had in recent years. Coupled with strong loan activity, more deposits generally lead to stronger profitability for bank branches, says Randy Fewel, president and CEO of Spokane-based Inland Northwest Bank.


Kootenai County is definitely growing faster in terms of banking than Spokane County, Fewel says.


According to the Federal Deposit Insurance Corp., total bank deposits in Kootenai County increased 17 percent in the year that ended last June 30, to $1.32 billion from $1.13 billion a year earlier. The FDIC requires banks to reports their deposits as of June 30.


In the previous five years, annual deposit growth in Kootenai County had ranged from almost 5 percent in 2001 to almost 10 percent in 2003.


By comparison, total bank deposits in Spokane County increased 11 percent to $4.81 billion in the year ended June 30, compared with $4.32 billion in the previous year, after ranging from growth of 5 percent to 9 percent in the previous five years.


FDIC data dont include credit union deposits.


As loans and deposits grow, so does competition in the Kootenai County market, bankers say.


Coeur dAlene and Kootenai County are on the map as a growth area, says Jon Hippler, president and CEO of Mountain West Bank. You see it with the number of big-box retailers opening stores here to take advantage of that. Its the same sort of motivation for a lot of banks.


Even though Kootenai County has only a quarter of the total deposits of Spokane County and far fewer bank branches39 compared with 124nearly as many banks have a presence there as in Spokane County. According to FDIC statistics, 14 banks have branches in Kootenai County, compared with 16 in Spokane County.


Ten years ago, nine banks had 28 branches in Kootenai County.


In addition to a number of national banks, the Kootenai County market includes several smaller banks that compete heavily for market share


We do best when we can compete against the national banks, says Fewel. In markets where there are a lot of other community banks, its more difficult to differentiate ourselves.


Schneider also says that competition is strong in Kootenai County, but sees little difference between the branches of large and small banks in terms of serving the market.


All of us live in Coeur dAlene, he says. Were all active in the community.


Market share,/p>


Meanwhile, the three national banks with the most deposits in Kootenai County all have lost market share there in recent years.


Wells Fargo has had far and away the largest market share of any bank in Kootenai County over the past four years, but its market share, measured in terms of local deposits, fell to 21 percent in 2004 from 29 percent in 2001.


Still, Wells Fargo maintains an 8-percentage-point lead over Charlotte, N.C.-based Bank of America, which has the second-best market penetration in Kootenai County. Bank of Americas percentage of total deposits has decreased consistentlythough not as steeply as Wells Fargos dropto 13 percent in 2004 from 15 percent in 2001, FDIC statistics show.


U.S. Bank, of Minneapolis, has had its market share dwindle to 12 percent in 2004 from 17 percent four years earlier.


Meantime, the shares of the deposits base held by Coeur dAlene-based banks all have risen slowly.


Mountain Wests market share of deposits was at 11 percent in 2004, up 1 percentage point from 2001.


Idaho Independent Banks market share in Kootenai County climbed to 10 percent, from 8 percent, during that period.


Bankcda, which opened its doors in 2001, had just under 3 percent market share in 2004.


Spokane-based banks also have chunks of the Kootenai County market.


Washington Trust Bank has the largest market share of the Spokane-based institutions, at 10 percent. That longtime bank has lost some market share, thoughit had 12 percent of the deposits in Kootenai County in 2001.


Sterling Savings Bank, of Spokane, entered the Coeur dAlene market about six years ago and had just over 2 percent of the market share in 2004. Inland Northwest Bank has held steady in recent years with just over 1 percent market share. AmericanWest Bank, with one branch in Hayden, controls about 1 percent of the market share.