Rising small business loan demand is bolstering some Inland Northwest banks in the third quarter, but persistent inflation, high interest rates, and trade tariffs are depressing agricultural and commercial borrowing, according to quarterly earnings reports released by banks across the region.

Together, the results from major financial institutions operating in the Spokane-Coeur d'Alene area reflect a regional economy pulled in opposing directions. While strong balance sheets and steady consumer deposits allowed several institutions to post solid profits, elevated borrowing costs and trade uncertainty are prompting commercial and agricultural borrowers to dial back expansion plans heading into next year.

Spokane-based W.T.B. Financial Corp., parent of Washington Trust Bank, saw third-quarter net income rise to $30.2 million, or $12.54 per diluted share, up from $27.2 million, or $11.09 per share, in the year-earlier quarter. The gains came as steady small business activity helped balance caution among larger commercial borrowers, according to the bank's Chief Economist Steve Scranton.

A company letter to shareholders regarding third-quarter earnings attributes the growth to disciplined expense management and net interest revenue expansion. At the same time, elevated economic uncertainty and market inflation concerns continue to create challenges for Washington Trust Bank and other banks here, says Scranton.

“Given how much rates have gone up over the quarter, a lot of projects that need term financing, whether it's building a building or buying new equipment, aren’t as feasible at the higher rate environment,” Scranton says. 

He notes that ongoing macroeconomic headwinds can create friction, prompting companies to exercise caution and adopt a wait-and-see approach before committing to new loans.

In 2025, Washington Trust Bank saw loan demand in the commercial real estate sector as the weakest area, Scranton explains. This year, however, the agriculture industry has been hit the hardest by tariffs and high diesel and material prices. As a result, some agricultural companies are finding it harder to stay profitable and aren’t looking to expand or produce on more acreage, resulting in fewer agricultural loans, he says.

“Banks are still actively looking to lend, but they're not necessarily seeing the demand from their customers to borrow that they had seen in the past,” he says.

Some other lenders with a presence in the Spokane-Coeur d'Alene market also navigated a more constrained lending environment.

First Interstate BancSystem Inc., parent company of First Interstate Bank, reported third-quarter net income of $62.2 million, or $0.65 per diluted share, down from $71.4 million, or $0.69 per share, for Q3 2025. Despite lower overall loan balances, the Billings, Montana-based institution expanded its net interest margin 19 basis points year over year and reduced nonperforming assets by 16.5% to $155 million.

Tacoma, Washington-based Columbia Banking System Inc., parent of Columbia Bank, reported third-quarter net income of $220 million, or $0.78 per diluted share, up significantly from $96 million, or $0.40 per share, in Q3 2025. Third-quarter performance was driven in part by a net interest margin expansion to 4.11%, along with a summer customer deposit campaign that brought in over $700 million in new deposits.

Columbia Banking System merged with the parent company of Umpqua Bank in March 2023. Umpqua Bank rebranded to Columbia Bank in September 2025 and the bank now operates 12 branches in the Spokane-Coeur d'Alene area.

Walla Walla-based Banner Corp. reported third-quarter net income of $47.7 million, or $1.36 per diluted share, down from $53.5 million, or $1.54 per share, in the year-earlier quarter. In the company's letter to shareholders, President and CEO Mark Grescovich explains that costs related to its Pacific Financial acquisition affected earnings, but the bank's core operations remained solid, supported by disciplined expenses and core deposits making up 90% of total deposits. Banner Bank operates 9 branches in the Spokane-area.

Kalispell, Montana-based Glacier Bancorp Inc. delivered a quarterly net income of $105 million, or $0.80 per diluted share, up 54% from $67.9 million, $0.57 per share, in Q3 2025, according to its latest earnings report. CEO Randy Chesler attributes the record performance to 11 consecutive quarters of net interest margin expansion — which reached 4.01% — and strong core deposit growth, he says in the company's third-quarter press release.

The parent company of both Coeur d’Alene-based Mountain West Bank and Spokane-based Wheatland Bank declared its 166th consecutive quarterly dividend. Mountain West Bank operates five branches in the Spokane-Coeur d'Alene area. Wheatland Bank has two branches in the market.

Seattle-based WaFd Inc., parent company of WaFd Bank, reported net income of $60 million, or $0.76 per diluted share, down slightly from $60.6 million, or $0.72 per share, in the year-earlier quarter. This earnings report is for WaFd’s fiscal fourth quarter, which ended Sept. 30. For the full fiscal year, WaFd achieved a 22% increase in diluted earnings per share to $3.21. WaFd Bank operates two local branches.

Coeur d’Alene Bancorp, parent of bankcda, posted third-quarter net income of $613,000, or $0.32 per diluted share, up from $402,000, or $0.21 per share, a year earlier. President and CEO Wes Veach notes in the company's third-quarter letter to shareholders that strong core deposits helped push year-to-date net interest margin to 4.42%, while gross loans grew 12.8% year-over-year to $146.7 million. 

The community bank also announced plans to break ground on a new full-service branch in Richland, Washington, expected to open in late 2027. Bankcda has four branches in the Spokane-Coeur d’Alene area.

Charlotte, North Carolina-based Bank of America reported Q3 net income of $6.9 billion, or $0.91 per diluted share, down from $8.3 billion, or $1.04 per share, in the year-earlier quarter. The company failed to mitigate and report priority national security risks related to international money laundering and maintained a deficient and ineffective antimoney laundering compliance program, the U.S. Department of the Treasury announced on Oct. 13. Third-quarter results included a regulatory settlement charge of $1.2 billion.

Bank of America operates seven Spokane-area branches.

San Francisco-based Wells Fargo & Co.'s reported third-quarter net income is $6 billion, or $1.87 per diluted share, up 13% from $5.6 billion, or $1.66 per share, in Q3 2025. In the company's third-quarter press release, CEO Charlie Scharf highlights broad-based growth in both average loans and average deposits, alongside efficiency gains from an 8% reduction in headcount over the past year. The organization has 10 branches in the Spokane-Coeur d'Alene area.

U.S. Bancorp, the Minneapolis-based parent company of U.S. Bank, has reported third-quarter net income of $2.2 billion, or $1.34 per diluted share, up from $2 billion, or $1.22 per share, in the year-earlier quarter. The bank earned record quarterly net revenue of $7.97 billion, driven by an 8% increase in average loan balances and a 14.9% uptick in fee revenue, according to the bank's Q3 2026 financial report. U.S. Bank operates 15 branches in the Spokane-Coeur d’Alene area.

In the year ahead, Scranton says he expects small businesses to bolster the economy, as the number of new businesses applying for licenses currently is at a near-record high. Both the national and Inland Northwest economy will likely continue at a slow pace of growth, he says, adding that a recession or an economic boom isn't expected in the near future.

“People are still thinking that they've got something that will be successful, can take to the marketplace, and have a successful business,” he says. “I think the economy is going to continue to grow — not boom — but if the economy is growing, then there's going to be demand to be able to finance projects like that.”