Total deposits in financial institutions in Spokane County dropped 2.8 percent in the year ended June 30, 1997, newly released figures show, but the decrease probably doesnt reflect on Spokanes economic climate, says a Spokane bank executive.


Deposits in the county totaled $4.223 billion as of June 30, down from $4.343 billion at the end of the year-earlier period. In the 12 months ended June 30, 1996, deposits grew 2 percent.


The bank executive, Peter Stanton, president and CEO at Washington Trust Bank, says he believes much of the drop in deposits in Spokane County can be attributed to the nationwide trend of people putting their money into the stock market and other non-bank investments, rather than in bank-handled conservative certificates of deposit and savings accounts.


The climate has changed, but I dont think its necessarily unhealthy, Stanton says. Banks historically have needed deposits to make loans, but banks will figure out how to get that inventory of loanable funds even if deposits continue to drop.


He adds that financial institutions are using strategies, such as securitizing loans and then selling them or garnering funds from the Federal Home Loan Bank. Some larger, sophisticated banks are even looking to shed deposits in favor of capital that doesnt cost as much, he says.


Stanton doubts that much of the drop in countywide deposits could be attributed to recent mega-mergers in the banking industry. Such mergers can cause a drop in deposits at a particular institution, but usually would result in an increase in deposits at smaller institutions here, he says.


The figures were compiled by Sheshunoff Information Services, of Austin, Texas, for the Federal Home Loan Bank of Seattle. They cover all deposits in financial institutions in Spokane County.


John R. Madri, president and CEO at Global Credit Union, of Spokane, says he, too, believes the drop in deposits can be attributed to people investing more in stocks and annuities.


In addition, he says hes heard that some people are stashing away money at home as a precaution against any possible computer glitches that the advent of the year 2000 may cause. Its expected that some computer systems wont handle the change to the century correctly, and Madri says depositors who are squirreling away money at home fear they may not have access to their account for a while.Credit unions see gainsDespite the industrywide decline in deposits here, Spokane Countys credit unions posted a strong 6.3 percent increase in deposits. Deposits at credit unions here rose to $1.25 billion, which gave credit unions 29.5 percent of the market, up from 27 percent 12 months earlier.


Madri contends people like credit unions because of their personal service and attractive rates on deposits and loans. Thats what people are looking for, he says.


At commercial banks, deposits fell 7.8 percent to $2.27 billion. The banks market share remained a commanding 53.8 percent, though down somewhat from 56.7 percent a year earlier.


The two other categories of financial institutions whose deposits are reflected in Sheshunoffs records are mutual savings banks and savings and loans. Deposits at mutual savings banks dropped 2.6 percent in the year ended June 30, 1997, to $542.2 million. Their market share remained unchanged at 12.8 percent.


At savings and loans, deposits rose 8.5 percent to $162.77 million, and market share increased to 3.9 percent, up from 3.5 percent 12 months earlier.