AmericanWest Bank finds a buyer

AmericanWest Bancorporation will sell operating subsidiary AmericanWest Bank to private investors in a deal that Patrick Rusnak, company president and CEO, said Wednesday was the best possible outcome for the Spokane-based bank, its employees and customers.

The holding company will file bankruptcy, he said, but AmericanWest’s 58 branches in Eastern Washington, Idaho, and Utah will remain open, with additional capital to support more lending, he said.

The buyer, SKBHC Holdings LLC, will pay the holding company $6.5 million for the bank, but other bidders can up that offer in an auction that will be conducted by the U.S. Bankruptcy Court in Spokane, Rusnak said.

SKBHC will also invest up to $200 million in the bank, which in May 2009 was ordered to raise more capital by federal and state regulators. That demand was reiterated in April.

Rusnak said AmericanWest needs about $115 million in new investment to comply with regulatory benchmarks.

AmericanWest employs 540, 164 in Spokane. Branches in Utah operate under the name Far West Bank.

The Federal Reserve Bank on Tuesday approved SKBHC’s standing as a bank holding company, which allowed it to complete the purchase of Starbuck Bancshares Inc. and its single-branch subsidiary, the First National Bank of Starbuck, Minn.

Rusnak said the Fed action also allowed the AmericanWest Bancorporation and SKBHC to make Wednesday’s announcement, which he said followed two months of negotiation.

A competing bid for the holding company during the bankruptcy court auction is unlikely, he said.

Since the order to raise more capital, he said, “We’ve turned over every rock.”

Rusnak said the $6.5 million received from SKBHC will only partially repay creditors, and shareholders will receive nothing. The shares, worth as much as $26 in 2006, closed Wednesday at 24 cents.

Rusnak said the deal with SKBHC is expected to close this year.

If so, AmericanWest will be the second Spokane bank to successfully recapitalize. Sterling Financial Corp. in August secured $730 million in new investment.

Both institutions took huge losses on real estate and construction loans in markets that collapsed during the recession.

Rusnak said SKBHC, a $750 million fund raised specifically to invest in under-capitalized banks, liked the footprint AmericanWest and Far West have in the Northwest and Rocky Mountain regions.

SKBHC Chairman Scott Kisting has held executive positions at Merrill Lynch, Golden State Bancorp., and Bank of America during a 35-year career in banking.

“Community banking has a bright future in the Inland Northwest and Utah,” he said. “A well-regarded community bank like AmericanWest Bank can play a role in that future.”