AmericanWest posts large loss
New CEO aims at return to profitability
A defiant Patrick Rusnak, newly confirmed as president and chief executive officer of AmericanWest Bancorporation, Friday repudiated what he called “malicious rumors” about the standing of the Spokane-based institution, even as he announced major losses and the closure of six branches in the area.
“Many have already written the AmericanWest Bancorporation epitaph,” he said at the conclusion of a conference call on company earnings. “Standing on the outside looking in, that may be understandable.”
But, Rusnak said, doubters discount AmericanWest’s efforts to address its problem loans, its 100,000 accounts with an average longevity of seven years, and the dedication of its 700-plus employees, for whom he said his message was intended.
“We’re going to make a concerted effort to return the bank to profitability,” Rusnak said.
To get there, the bank aggressively marked down goodwill booked as a result of earlier acquisitions, and restructured management to fit a traditional community banking model.
For its third quarter, the result was a net loss of $96.9 million, or $5.63 per share, compared with net income of $5.3 million, or 31 cents per share, for the 2007 period. For the first nine months of 2008, the bank reported a loss of $134.7 million, or $7.82 per share, compared with income of $12.1 million, or 79 cents per share, in 2007.
The biggest damage was done by an $82 million non-cash adjustment for goodwill, which came on top of a $27 million charge in the first quarter.
The bank also took a $27.7 million provision for loan losses, and charged off $22.8 million in loans.
Deposits, at $1.59 billion, slipped by $23 million during the quarter, and were off $11.3 million from Sept. 30, 2007.
Assets stood at $2 billion, compared with $2.1 billion a year ago.
Net loans were $1.65 billion, compared with $1.7 billion a year ago.
The branches to be closed are in Kennewick, Latah, Oakesdale, Qualchan, on the West Plains and St. Maries. Customer accounts will be transferred to nearby branches. That reduces the network to 58.
Rusnak said the reorganization and closures will save the bank about $6 million annually. He said he did not know how many employees might be laid off to reach that figure.