Bank will take more writedowns
AmericanWest Bancorp. will take a $9.8 million hit in its fourth quarter due to loan losses and reductions in the values of assets, the company announced in a news release.
The Spokane-based company will set aside up to $7 million to cover loan losses. The remainder will come in the form of lower values assigned to real estate the bank holds as assets, the news release said.
For the full year, the money reserved to cover loan losses is expected to be about $15.5 million. Net write-offs are expected to be $6.9 million for the year.
The company expects to issue its fourth quarter earnings report on Feb. 2.
The charges are the result of a review of the company’s loan portfolio that was completed during the fourth quarter in connection with changes in executive management, the release said. In September, Robert Daugherty was appointed president and CEO, replacing Wes Colley.
“I think what you’re seeing is a clean-up,” said Jeff Rulis, an analyst with D.A. Davidson in Portland. “They just hired a new CEO. There’s a honeymoon period with a new CEO. It’s an opportunity for them to come clean and get rid of their problem loans.”
The review of the company’s portfolio resulted in updated market valuations of three properties and in several large loans being downgraded, Daugherty said in a prepared statement. Ensuring the quality of the company’s assets and collecting on problem loans will be the top priorities for 2005, he said.
“Historically, we have taken a little higher credit risk than some of our peers,” said C. Tim Cassels, chief financial officer for AmericanWest. “We’re not going to do that on a go-forward basis.”
Cassels said the company also plans to refocus on markets close to home, including Spokane and the Tri-Cities. AmericanWest has 42 branches in Eastern Washington and North Idaho.