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March 26, 2010 in Business
AmericanWest on federal notice
Bank must raise $100 million by Sunday
AmericanWest Bancorp is facing a Sunday deadline from federal regulators to raise about $100 million or be taken over, the Spokane-based company revealed in filings with the U.S. Securities & Exchange Commission.
But Patrick Rusnak, AmericanWest’s CEO, said in an interview Thursday that the bank is making progress in attracting new investment and he’s confident the deadline will be extended.
Brad Williamson, Washington state’s top bank regulator, said he is in close contact with AmericanWest executives and believes “failure is not imminent here. The bank does have some time to recapitalize, but they do need to recapitalize.”
The state’s opinion of AmericanWest is important because in most cases, state regulators close banks, not federal regulators.
Williamson, director of the Washington Department of Financial Institution’s banks division, said the “prompt corrective action” directive from federal regulators is a step in a process.
While nearly all bank failures have been preceded by the issuance of a PCA letter from the Federal Deposit Insurance Corp., issuing the letter doesn’t necessarily mean the bank will fail, he said.
“There are certainly banks across the country that have gotten PCA letters and been able to move on,” Williamson said Thursday.
Williamson said that in his view, AmericanWest “management has taken very aggressive action to address the problems in the institution.”
LaJuan Williams-Young, spokeswoman for the FDIC in Washington, D.C., said the agency doesn’t comment on PCA letters issued to individual banks. In general, however, the FDIC can extend deadlines “on a case-by-case basis,” she said.
The PCA directive, issued Feb. 26, gave AmericanWest 30 days to recapitalize or sell to another financial institution.
AmericanWest, like many banks, has been hurt by the sharp downturn in the real estate market and a mortgage-fueled credit crunch. Earlier this month, its stock was de-listed from the Nasdaq exchange.
Rusnak, the bank’s CEO, said hiring a new financial adviser in February has helped AmericanWest identify potential investors, and the de-listing won’t be an impediment to attracting new capital.
“Based on what’s happened over the last few weeks, I’m more confident now than at any time during the last year,” he said.
Investors are more optimistic about economic recovery, he said, and AmericanWest, with its 58 branches in three states, is still “an excellent community-bank franchise.”
Seven firms or nonprofits win Agora Awards 
Not_woriking on March 26 at 12:32 p.m.
I wonder if the CEO is pulling down a couple million in pay and bennies.
johnclarke on March 26 at 3:38 p.m.
http://investing.businessweek.com/research/stocks/people/person.asp?personId=602465&ticker=AWBC:US
More like $267,000 on paper. AW had a cease and desist back in 2008 when he took over, so it’s not like it is Rusnak’s fault. This ship was sunk by someone else, who overexpanded and then bailed to guess what….open another bank. Regardless, I don’t think Sterling or AW should be saved with my tax dollars. Banking is nearly impossible to do wrong if you stick to normal principals, yet these guys manage to find a way to run banks into the ground. How about a little free economy, survival of the fittest?
edmitch on March 27 at 2:42 p.m.
Let them go bankrupt. Businesses out in “the real world” live or die based on their own management skill not on taxpayers being ripped off to bail out their incompetence.
There are healthy banks around - which means these failing banks are failing because of bad management. They deserve to fail because they ran their own firm into the ground.
And when will we see bank executives apologizing for their behavior and thanking the American taxpayer for our generous enforced gifts to the banking industry?
American West, Sterling and Frontier have blown through deadline after deadline. Its time to get rid of the failures so that new, well run, and efficient organizations can take their place. There used to be a name for this type of economic system where accountability reigned. In the old days, I think they called it “capitalism”.