U.S. Bankruptcy Court Judge Patricia Williams on Thursday authorized the sale of AmericanWest Bank to a holding company that will inject as much as $200 million into the Spokane-based institution.
The $6.5 million deal between AmericanWest Bancorporation and SKBHC Holdings LLC is expected to close by the end of the year, possibly before Christmas.
While reluctant to comment in detail until the transaction is completed, executives on both sides said they have high expectations for a revitalized AmericanWest.
“This is great news, a great outcome,” AmericanWest President Pat Rusnak said. “We’ve really been in a hunkered-down position.”
AmericanWest operates 58 branches in Washington, Idaho and Utah, and employs 160 in Spokane.
“Our employees are excited and ready to move the bank forward,” Rusnak said. “After two-and-a-half years of delay and disappointment, the last 90 days went like clockwork.”
SKBHC executives said they invested in AmericanWest because management and employees had not flinched from recognizing and addressing the bank’s loan problems, which spurred regulator concern in 2008.
Other banks SKBHC considered were less realistic, said Chairman Scott Kisting.
And AmericanWest had established the customer relationships that are the foundation of community banking, he said. “We could see the quality of the bank beneath the problems.”
Kisting said the holding company with his initials – he said that will change – was created by Oaktree Capital Management in 2009 to look for an opportunity to build a new community banking franchise. Goldman Sachs Group became an investor, as did Friedman Fleischer & Lowe, a private equity group based in San Francisco.
The company assembled a fund of $750 million, said Kisting, whose 35-year career includes executive positions with Bank of America and Norwest Corp.
Chief Operating Officer James Claffee, with 30 years in banking, most recently was West Region president for Mutual of Omaha Bank.
“Today’s a really exciting day for us,” said Claffee, who said it was encouraging to have everyone – the bank, its creditors, regulators and court – working toward a common goal; in this case a renewed AmericanWest.
He said the deal could be precedent-setting for its treatment of trust-preferred security holders, who will get a fraction of their original investment back.
Trustees unable to get 100 percent investor approval of other deals had to stand off, at the risk of losing everything, he said.
Having AmericanWest Bancorporation file bankruptcy forced the trustees’ hands, Claffee said. In the future, investors may sue if trustees do not negotiate at least a partial settlement of their claims, he said.
Kisting praised Rusnak, other AmericanWest senior managers and the board of directors for their determination and “courage” preserving a bank under severe pressure to raise money, or possibly perish.
“We have been interested in the bank because of its mix of dedicated employees, loyal customers and attractive communities,” he said. “Together with those employees, we are about to begin a new chapter in the bank’s life.
“We are very proud to be a part of it.”