Spokane-area bankers say 2012 is expected to usher in slightly better results for financial institutions after seeing some improvement in 2011, but they sprinkle any projections with caution based on the economy's lingering uncertainty.

They cite impacts from a still sluggish real estate market, area joblessness, and customers waiting out a political fog over taxes, regulations, and national governmental issues in general. Still, they say bright spots are emerging, including a slight increase in loan activity, a strong agricultural market, and some manufacturing companies seeking financing to add equipment or expand inventory.

"I believe 2012 will be marginally better, but until we see significant job creation, it's going to be a tough road," says Randy Fewel, president and CEO of Inland Northwest Bank.

Nationally, the pace of bank failures has slowed, and banks have gradually worked through past bad loans, he adds, but the process will continue to be slow. "Banks, particularly community banks, are so dependent on the economies where they do business, and our economy still, I think, has got some serious issues."

However, Fewel says some manufacturing companies here are requesting equipment loans and credit lines.

Greg Deckard, State Bank Northwest president and CEO, says that banks statewide saw general improvement in 2011. The same is true for State Bank Northwest and its clients' financial positions, he says. However, he adds, "Most people who are able to add jobs or expand are reluctant to do so until the political and legislative environment becomes more clear."

Some banks will face challenges in this newer loan and regulatory environment, says Ezra Eckhardt, Sterling Savings Bank president and chief operating officer.

"In particular, small organizations will have a harder time keeping pace with the management costs associated with increased regulations and compliance, and with the very low interest rate environment, that creates a pressure on the earning potential for banks," Eckhardt says.

Meanwhile, there's hope for additional small business lending. WTB Financial Corp., the Spokane parent of Washington Trust Bank, recently received $89.1 million from the U.S. Department of the Treasury's Small Business Lending Fund.

Pete Stanton, chairman and CEO of Washington Trust Bank, says that most banks will tell customers they have funds to lend, but he also cites business uncertainty about taxation and regulations, "so to some extent we're captive to that uncertainty."

However, Stanton says that loan activity is up a bit, and expected to rise 2 to 3 percent next year, "There is sort of a feeling that now's an opportune time to take advantage of low real estate values, low interest rates," he adds. "I also think people are realizing that we're reaching the point when it's time to make those investments, given the value of real estate and the inputs for production."

He says Washington Trust expects "a reasonably good year," in 2012.

Meanwhile, credit unions have had their share of a better 2011, with a large gain in new customers.

Numerica Credit Union, for example, saw a 7 percent increase in new members so far this year.

"We've had greater member growth than we budgeted," Numerica CEO Carla Altepeter says. "You have to attribute that to a national awareness about the choice of credit unions."