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.”