AmericanWest Bancorporation Announces Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091029005249/en

SPOKANE, Wash.--(Business Wire)--
AmericanWest Bancorporation (NASDAQ: AWBC) today announced third quarter
financial results which included the following:

* Total balance sheet liquidity increased significantly to $252 million of
liquid assets at September 30, 2009, comprised of cash, cash equivalents and
securities, as compared to $167 million at June 30, 2009 and $132 million at
year end 2008.
* Loans ended the quarter at $1.37 billion, a reduction of $103 million, or 7%,
from June 30, 2009 and a reduction of $253 million, or 16%, over the past year.
* Total deposits remained stable at $1.55 billion at September 30, 2009 as
compared to $1.52 billion at June 30, 2009.
* Net interest margin was 3.54% for the third quarter of 2009 as compared to
3.35% for the second quarter of 2009 and 3.89% in the third quarter of 2008.
* Provision for loan losses was $9.0 million for the third quarter of 2009 as
compared to $11.8 million for the second quarter of 2009 and $27.7 million for
the third quarter of 2008.
* Net charge-offs for the third quarter of $8.7 million (2.40% of total loans)
as compared to $19.8 million (5.15%) for the second quarter of 2009 and $22.8
million (5.15%) for the third quarter of 2008.
* Non-performing assets remained stable at $156.4 million at September 30, 2009
as compared to $157.5 million at June 30, 2009.
* Mortgage banking revenue decreased $2.2 million, or 71%, as compared to the
second quarter of 2009 and $142 thousand, or 13%, as compared to the third
quarter of 2008.
* Goodwill impairment charge of $18.9 million was recorded in the third quarter
2009, based on annual impairment testing results, as compared to $82.0 million
recorded in the same period of the prior year.
* Total non-interest expense was $19.6 million, excluding a goodwill impairment
charge of $18.9 million, which is unchanged from the second quarter.

For the quarter ended September 30, 2009, AmericanWest Bancorporation (Company)
reported a net loss of $28.4 million, or $1.65 per share, as compared to a net
loss of $10.5 million, or $0.61 per share, for the second quarter of 2009 and a
net loss of $96.9 million, or $5.63 per share, for the third quarter of 2008.
Excluding goodwill impairment charges, the net loss was $9.5 million or $0.55
per share for the third quarter 2009 as compared to $14.9 million or $0.87 per
share for the third quarter 2008.

For the nine months ended September 30, 2009, the Company reported a net loss of
$53.5 million, or $3.11 per share, as compared with a net loss of $134.7
million, or $7.82 per share, for the same period in 2008. Excluding $18.9
million and $109.0 million goodwill impairment charges during the first nine
months of 2009 and 2008, respectively, the net losses were $34.6 million ($2.01
per share) and $25.7 million ($1.49 per share).

"Our third quarter results reflect continuing progress on a number of fronts,
including a 19 basis point expansion in the net interest margin driven by lower
deposit costs, the lowest loan loss provision in two years and an enhanced
liquidity position," remarked Patrick Rusnak, Chief Executive Officer. "Our
sights remain firmly fixed on the objective of restoring AmericanWest to
sustained profitability and removal of all regulatory restrictions just as
quickly as possible."

Net Interest Margin:

The tax-equivalent net interest margin for the third quarter of 2009 was 3.54%,
as compared to 3.35% in the second quarter, and 3.89% for the third quarter of
2008. The 19 basis point increase from the prior quarter is due to the decrease
in the cost of funds of 28 basis points, while the yield on earning assets
remained unchanged.

The average yield on loans for the third quarter was 5.80%, an increase of 18
basis points from the prior quarter, and a decrease of 54 basis points from the
same period in 2008. The loan yield for the third quarter of 2009 was reduced by
61 basis points due to the total impact of non-accrual loans, including both
reversed and forgone interest. The average prime rate (the base index for
approximately 31% of the Company`s loan portfolio) for the third and second
quarters of 2009 was 3.25% as compared to 5.00% for the third quarter of 2008.

The average cost of interest bearing deposits for the third quarter was 1.91%, a
decrease of 27 basis points from the second quarter of 2009 and a decrease of 79
basis points from the third quarter of 2008. The cost of borrowed funds,
including FHLB advances and junior subordinated debt, was 3.59% for the third
quarter of 2009, a decrease of 23 basis points from the second quarter of 2009,
and a decrease of 46 basis points from the third quarter of 2008, both due to
the mix of borrowings and a decline in variable rates. The average cost of
interest bearing liabilities for the third quarter of 2009 was 2.10%, as
compared to 2.38% for the second quarter of 2009, and 2.92% for the third
quarter of 2008. The Company`s cost of funds inclusive of non-interest bearing
deposits was 1.74% for the third quarter of 2009 as compared to 1.98% for the
second quarter of 2009, and 2.41% for the same period of 2008.

The tax-equivalent net interest margin for the nine months ended September 30,
2009 was 3.40%, as compared to 4.23% for the similar period of the prior year.
The decrease is principally due to a 130 basis point decrease in the yield on
interest earning assets, partially offset by a decline in the cost of funds of
71 basis points. The average yield on loans was 5.69% for the first nine months
of 2009, a decrease of 112 basis points from the same period of the prior year.
The total impact of non-accrual loans, including both reversed and forgone
interest, was 73 basis points on the loan yield for the nine months ended
September 30, 2009. The cost of interest bearing deposits was 2.20% for the nine
months ended September 30, 2009, a decrease of 61 basis points from the similar
period of the prior year.

Loans:

Total outstanding loans as of September 30, 2009 were $1.37 billion, as compared
to $1.47 billion at June 30, 2009, and $1.62 billion at December 31, 2008. The
linked-quarter reduction was principally driven by declines of $46 million in
construction and development loans (including $21 million transferred to
foreclosed real estate and $2 million in charge-offs), $23 million in commercial
and industrial loans (including $1 million in charge-offs), and $21 million in
commercial real estate loans (including $5 million transferred to foreclosed
real estate and $2 million in charge-offs). Total average loans outstanding for
the third quarter of 2009 were $1.44 billion, a decrease of $99 million from the
prior quarter end and $324 million from September 30, 2008.

Asset Quality:

Total non-performing assets, net of government guarantees on loans, were 8.87%
of total assets at September 30, 2009 as compared to 8.86% of total assets at
June 30, 2009, and 5.74% of total assets at December 31, 2008. Non-performing
loans, net of government guaranteed amounts, represented 7.30% of total loans at
September 30, 2009 as compared to 8.29% of total loans at June 30, 2009 and
5.65% of total loans at December 31, 2008. Non-performing loans reported as of
September 30, 2009 reflected cumulative charge-offs of $30.1 million, of which
$6.8 million and $26.3 million were recognized during the three and nine months
ended September 30, 2009.

"Over the past eight quarters, we have been aggressively addressing the
deterioration in our loan portfolio caused by the economy in general, and the
residential real estate market in particular, through the timely identification
of problem loans, recognition of related losses and commencement of liquidation
efforts," remarked Rusnak. "This disciplined approach is a principal reason why
our asset quality metrics, including non-performing and adversely classified
assets, are exhibiting clear evidence of stabilization. Our current outlook is
for continued asset quality improvement during the fourth quarter of 2009 and
into 2010, driven mostly by the liquidation of foreclosed real estate."

Foreclosed assets at September 30, 2009 totaled $56.3 million and consisted of
41 properties as compared to $35.2 million (30 properties) at June 30, 2009, and
$15.8 million (22 properties) as of December 31, 2008. The value of the largest
properties being carried at September 30, 2009 were $9.7 million for a
residential development project and $8.3 million related to a completed
commercial office condominium complex. During the third quarter of 2009, 10
foreclosed properties with an aggregate carrying value of $2.9 million were sold
resulting in a pre-tax loss of $85 thousand. In addition, during the third
quarter of 2009, $2.0 million of impairment charges were recognized on
foreclosed real estate. Foreclosure action has been initiated on substantially
all real estate secured non-performing loans, and the Company expects to obtain
ownership of approximately $34 million of additional real estate collateral
during the fourth quarter of 2009. Further, management expects to complete the
sale of approximately $16 million of foreclosed property during the fourth
quarter of 2009, without incurring any additional material losses.

At September 30, 2009, the Company had approximately $73 million of loans which
were not classified as non-performing but were internally identified as
potential problem loans due to management`s concerns about the borrower`s
financial condition. This represented approximately 5.3% of total outstanding
loans, as compared to 4.7% at June 30, 2009.

The Company recognized a provision for loan losses of $9.0 million or 2.48% of
average loans on an annualized basis, for the quarter ended September 30, 2009,
as compared to $11.8 million, or 3.07% of average loans on an annualized basis,
for the quarter ended June 30, 2009. For the quarter ended September 30, 2008,
the Company recognized a provision for loan losses of $27.7 million, or 6.23% of
average loans on an annualized basis. For the quarter ended September 30, 2009,
net charge-offs were $8.7 million, or 2.40% of average loans annualized, as
compared to $19.8 million, or 5.15% of average loans annualized for the quarter
ended June 30, 2009 and $22.8 million, or 5.15% of average loans annualized, for
the third quarter of 2008.

For the nine months ended September 30, 2009, the Company recognized a provision
for loan losses of $34.5 million, or 3.01% of average loans annualized, as
compared to $56.9 million and 4.27% for the prior year period.

It is the Company`s general policy to recognize as charge-offs any specific loan
impairments for known losses in lieu of carrying such amounts as a loan specific
component of the allowance for credit losses. The allowance for credit losses,
which is comprised of the allowance for loan losses and reserve for unfunded
commitments, was $33.4 million, or 2.44% of total loans at September 30, 2009,
an increase of 19 basis points from June 30, 2009 and an increase of 26 basis
points from September 30, 2008.

Deposits and Liquidity:

Total average interest bearing deposits for the third quarter of 2009 were $1.24
billion as compared to $1.25 billion in the second quarter of 2009 and $1.26
billion in the third quarter of 2008. Total average non-interest bearing demand
deposits for the third quarter of 2009 were $287 million, substantially
unchanged from the second quarter, and a decline of $30.1 million, or 9%, from
the similar quarter of the prior year. Total average interest bearing demand
deposit balances increased $28 million, or 18%, during the quarter and increased
$47 million, or 35%, over the last 12 months. The average balance of
certificates of deposit decreased $20 million, or 3%, during the third quarter
of 2009 and was up $21 million, or 3%, as compared to the third quarter of 2008.

Total deposits as of September 30, 2009 were $1.6 billion, an increase of 2%
from June 30, 2009 and a decrease of 1% from December 31, 2008. Total brokered
certificates of deposit at September 30, 2009 were $2.5 million, a reduction of
$50.0 million from December 31, 2008.

The reduction in loans and the continued stability of the core deposit base has
lowered the Company`s reliance on borrowings to fund its liquidity needs over
the past year. Total FHLB and other borrowings at September 30, 2009 were $109.2
million, a decrease of $15.9 million from June 30, 2009 and a decrease of $33.8
million from December 31, 2008.

As of September 30, 2009, the Bank had total available secured borrowing
capacity of approximately $164.2 million through facilities at the FHLB and the
Federal Reserve Bank of San Francisco (Fed) Discount Window program. As of
September 30, 2009, the Bank had no borrowings from the Fed Discount Window.

Non-interest Income:

Non-interest income was $4.7 million for the quarter ended September 30, 2009 as
compared to $7.0 million for the quarter ended June 30, 2009, and $5.3 million
for the same period of the prior year. Fees on mortgage loan sales decreased
$2.2 million, or 71%, from the preceding quarter and $142 thousand, or 13%, as
compared to the third quarter of 2008. The significant decline in mortgage
activity was driven by an increase in mortgage rates and the resulting decline
in the volume of production. Fees and service charges on deposits as compared to
the prior quarter increased $141 thousand, or 6%, due to increased debit card
fees. Fees and service charges on deposits as compared to the same period of the
prior year decreased $431 thousand, or 15% due mainly to overdraft fees, which
declined $406 thousand. Included in other non-interest income for the third
quarter of 2009 was $435 thousand related to a trailing incentive on the sale of
a merchant bankcard portfolio in a prior period. Included in other non-interest
income for the second quarter of 2009 was a state excise tax refund of $335
thousand related to prior years.

Non-interest income for the nine months ended September 30, 2009 was $17.5
million, as compared to $14.6 million for the similar period of the prior year.
Mortgage loan sale income increased $2.8 million due to higher volumes of
activity and the market for residential loans during the first half of 2009.
Other non-interest income increased $1.4 million due mainly to refunds received
related to prior year state excise taxes of $1.3 million, the gain discussed
above of $435 thousand on the merchant bankcard portfolio and an increase in net
gains recorded on sales of securities of $169 thousand. These were partially
offset by income related to the credit card portfolio sold in the prior year,
which declined $321 thousand. Fees and service charges on deposits declined $1.3
million as compared to the same period of the prior year due mainly to a
decrease in overdraft fees.

Non-interest Expense:

Non-interest expense for the third quarter of 2009 was $38.5 million as compared
to $19.6 million for the second quarter of 2009 and $101.3 million for the third
quarter of 2008. The third quarter of 2009 and 2008 included goodwill impairment
charges of $18.9 million and $82.0 million, respectively, which were based on
annual impairment testing results. The goodwill impairment charge during the
third quarter of 2009 eliminates the carrying balance of goodwill. Excluding the
goodwill impairment charges, non-interest expense for the three months ended
September 30, 2009 and 2008 was $19.6 million and $19.3 million, respectively.
FDIC assessment expense for the third quarter of 2009 was $1.8 million, an
increase of $906 thousand over the second quarter 2009. This increase was mainly
due to a reversal of $1.0 million during the second quarter due to an
over-accrual in the first quarter. The foreclosed assets expense increased $659
thousand as compared to the second quarter due to charge-downs of carrying
values based on updated appraisals. These increases were partially offset by a
decline in other non-interest expense of $517 thousand due mainly to lower legal
and professional fees.

Non-interest expense, excluding the previously noted goodwill impairment
charges, for the nine months ended September 30, 2009 was $59.8 million, an
increase of $2.5 million from the prior year. The increase is related to the
FDIC assessment expense, which increased $5.4 million due to the special
assessment and increased quarterly assessments, and foreclosed assets expense
which increased $4.1 million, due mainly to $3.6 million of charge-downs taken
during the year. These increases were partially offset by a reduction in
salaries and employee benefits of $5.0 million, which is a result of the
Company`s ongoing cost savings initiatives.

The efficiency ratio for the quarter ended September 30, 2009 was 86%, as
compared to 82% in the prior quarter and 79% for the similar quarter of the
prior year.

Income Taxes:

As a result of the Company`s current going concern status since December 31,
2008, all tax benefits from operating losses in 2009 have been deferred and all
deferred taxes have been fully reserved, and therefore, the Company has not
shown any tax benefit for operating losses in the first nine months of 2009. If
the Company is successful in raising additional capital and future operating
profitability becomes probable, it is likely the going concern status will be
removed and the valuation reserve for deferred tax asset reversed, significantly
enhancing the regulatory capital ratios of both the Bank and the Company.

Capital and Regulatory Matters:

At September 30, 2009, total stockholders` equity was $37.5 million and total
tangible shareholders` equity was $26.2 million, or $1.52 per share. The
Company`s tangible equity ratio (tangible equity divided by tangible assets) was
1.50% as of September 30, 2009.

On May 11, 2009, AmericanWest Bank, the wholly-owned operating subsidiary of the
Company (Bank), stipulated to entry of an Order to Cease and Desist (Order) by
the Federal Deposit Insurance Corporation and the Washington Department of
Financial Institutions, Division of Banks. Management believes the Bank is in
compliance with all but two provisions contained in the Order. First, the Bank
did not attain the required Tier 1 leverage capital ratio of 10% within the
required 120 day period, which expired on September 8, 2009. The amount of
additional capital required to attain the prescribed Tier 1 leverage ratio as of
September 30, 2009 was approximately $109 million (please refer to the
Consolidated Financial Highlights section of this release for additional
information on regulatory capital ratios).

The Company is continuing to explore all available options with respect to
restoration of the Bank`s regulatory capital. "We are actively engaging in
discussions with prospective investors and are encouraged by recent improvements
in the capital markets environment," Rusnak remarked. "The stabilization of our
asset quality, solid core deposit base and fact that we have already completed
substantial organizational changes distinguish our bank from many others seeking
new capital."

Second, the ratio of assets classified as substandard or doubtful noted in the
most recent report of examination was not reduced to the required level of 75%
of capital by September 8, 2009. The respective ratio was 125% as of September
30, 2009. Although the amount of assets so classified has been reduced by $93.9
million since December 31, 2008, the decrease in the Bank`s regulatory capital
resulting from operating losses has impeded the Bank`s ability to achieve the
requirements of this provision within the specified timeframe.

On September 15, 2009, the Company entered into a Written Agreement with the
Federal Reserve Bank of San Francisco. Substantially all of the requirements of
the Written Agreement are similar to requirements imposed on the Company and the
Bank pursuant to other regulatory orders and agreements, and the Company and the
Bank have been operating in a manner consistent with those requirements.

About AmericanWest Bancorporation:

AmericanWest Bancorporation is a bank holding company whose principal subsidiary
is AmericanWest Bank which includes Far West Bank in Utah operating as an
integrated division of AmericanWest Bank. AmericanWest Bank is a community bank
with 58 financial centers located in Washington, Northern Idaho and Utah. For
further information on the Company, please visit our web site at
www.awbank.net/IR.

The press release contains certain non-GAAP measures which management believes
provide investors with information useful in understanding the financial
performance.Readers of this release are urged to review the non-GAAP financial
measures in conjunction with the GAAP results as reported.Management believes
tangible stockholders` equity and the tangible equity ratio are meaningful
measures of capital adequacy.Tangible stockholders` equity is calculated as
total stockholders` equity less goodwill and other intangible assets.In
addition, tangible assets are total assets less goodwill and other intangible
assets.The tangible equity ratio is calculated as tangible stockholders` equity
divided by tangible assets.The press release also contains non-GAAP measures
related to eliminating the effects of goodwill impairment and intangible
balances on certain amounts and ratios presented herein.Management believes
these measures are meaningful to investors in understanding the financial
performance during the periods presented.

This press release includes forward-looking statements, and AmericanWest
Bancorporation intends for such statements to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.These
forward-looking statements describe AmericanWest Bancorporation`s expectations
regarding future events, including the Company`s ability to improve its
regulatory capital ratios and the Company`s projections regarding asset quality
trends and foreclosed assets activity.Future events are difficult to predict and
are subject to risk and uncertainty which could cause actual results to differ
materially and adversely.Additional information regarding risks and
uncertainties is included in AmericanWest Bancorporation`s periodic filings on
Forms 10-K and 10-Q with the Securities and Exchange Commission.AmericanWest
Bancorporation undertakes no obligation to revise or amend any forward-looking
statements to reflect subsequent events or circumstances.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Consolidated Statements of Operations:
For the three months ended:
INTEREST INCOME 9/30/2009 6/30/2009 9/30/2008
Interest and fees on loans $ 21,056 $ 21,588 $ 28,149
Interest on securities 650 691 805
Other interest income 88 62 104
TOTAL INTEREST INCOME 21,794 22,341 29,058

INTEREST EXPENSE
Interest on deposits 5,995 6,809 8,562
Interest on borrowings 1,409 1,620 2,469
TOTAL INTEREST EXPENSE 7,404 8,429 11,031

NET INTEREST INCOME 14,390 13,912 18,027
Loan loss provision 9,000 11,800 27,650

NET INTEREST INCOME AFTER LOAN LOSS PROVISION 5,390 2,112 (9,623 )

NON-INTEREST INCOME
Fees and service charges on deposits 2,468 2,327 2,899
Fees on mortgage loan sales, net 921 3,154 1,063
Other 1,289 1,515 1,306
TOTAL NON-INTEREST INCOME 4,678 6,996 5,268

NON-INTEREST EXPENSE
Salaries and employee benefits 8,088 8,863 9,906
FDIC assessment 1,762 856 312
Equipment expense 1,858 1,880 2,035
Impairment of goodwill 18,852 - 82,000
Occupancy expense, net 1,623 1,758 1,822
Amortization of intangible assets 716 716 864
Foreclosed real estate and other foreclosed assets expense 2,427 1,768 73
Impairment of premises and securities 75 52 -
State business and occupation tax 155 320 266
Other 2,905 3,422 4,010
TOTAL NON-INTEREST EXPENSE 38,461 19,635 101,288

LOSS BEFORE PROVISION FOR INCOME TAX (28,393 ) (10,527 ) (105,643 )

BENEFIT FOR INCOME TAX - - (8,748 )
NET LOSS $ (28,393 ) $ (10,527 ) $ (96,895 )

Basic loss per common share $ (1.65 ) $ (0.61 ) $ (5.63 )
Diluted loss per common share $ (1.65 ) $ (0.61 ) $ (5.63 )
Basic weighted average shares outstanding 17,213 17,213 17,213
Diluted weighted average shares outstanding 17,213 17,213 17,213

Ending book value per share $ 2.18 $ 3.80 $ 8.53
Ending tangible book value per share $ 1.52 $ 2.01 $ 6.60
Ending shares outstanding 17,213 17,213 17,213

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Consolidated Statements of Operations:
For the nine months ended:
INTEREST INCOME 9/30/2009 9/30/2008
Interest and fees on loans $ 65,108 $ 90,717
Interest on securities 2,093 2,494
Other interest income 185 256
TOTAL INTEREST INCOME 67,386 93,467

INTEREST EXPENSE
Interest on deposits 20,361 26,244
Interest on borrowings 4,786 8,391
TOTAL INTEREST EXPENSE 25,147 34,635

NET INTEREST INCOME 42,239 58,832
Loan loss provision 34,480 56,850

NET INTEREST INCOME AFTER LOAN LOSS PROVISION 7,759 1,982

NON-INTEREST INCOME
Fees and service charges on deposits 7,003 8,299
Fees on mortgage loan sales, net 5,999 3,183
Other 4,472 3,111
TOTAL NON-INTEREST INCOME 17,474 14,593

NON-INTEREST EXPENSE
Salaries and employee benefits 25,844 30,838
FDIC assessment 6,093 676
Equipment expense 5,730 6,019
Occupancy expense, net 5,335 5,442
Foreclosed real estate and other foreclosed assets expense 4,482 369
Amortization of intangible assets 2,148 2,612
State business and occupation tax 495 858
Impairment of premises and securities 186 -
Impairment of goodwill 18,852 109,000
Other 9,523 10,498
TOTAL NON-INTEREST EXPENSE 78,688 166,312

LOSS BEFORE PROVISION FOR INCOME TAX (53,455 ) (149,737 )

BENEFIT FOR INCOME TAX - (15,073 )

NET LOSS $ (53,455 ) $ (134,664 )

Basic loss per common share $ (3.11 ) $ (7.82 )
Diluted loss per common share $ (3.11 ) $ (7.82 )
Basic weighted average shares outstanding 17,213 17,210
Diluted weighted average shares outstanding 17,213 17,210

Ending book value per share $ 2.18 $ 8.53
Ending tangible book value per share $ 1.52 $ 6.60
Ending shares outstanding 17,213 17,213

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Consolidated Statement of Condition:

9/30/2009 6/30/2009 12/31/2008 9/30/2008
ASSETS
Cash and due from banks $ 35,335 $ 36,195 $ 40,927 $ 55,300
Overnight interest bearing deposits with other banks 164,099 75,027 26,058 11,581
Cash and cash equivalents 199,434 111,222 66,985 66,881

Securities, available-for-sale at fair value 52,841 55,540 65,270 66,905

Loans, net of allowance for loan losses 1,336,280 1,439,707 1,577,106 1,685,006

Loans, held for sale 15,335 11,898 12,265 9,255
Accrued interest receivable 7,615 7,337 8,193 10,271
FHLB stock 10,267 10,267 8,286 10,010
Premises and equipment, net 36,956 38,009 41,385 44,578
Foreclosed real estate and other foreclosed assets 56,286 35,240 15,781 7,362
Bank owned life insurance 30,958 30,701 30,193 29,930
Goodwill - 18,852 18,852 18,852
Intangible assets 11,319 12,035 13,467 14,330
Other assets 6,140 6,810 16,840 27,747
TOTAL ASSETS $ 1,763,431 $ 1,777,618 $ 1,874,623 $ 1,991,127

LIABILITIES
Non-interest bearing demand deposits $ 291,683 $ 284,096 $ 321,552 $ 325,465
Interest bearing deposits:
NOW, savings accounts and MMDA 593,926 573,997 559,666 577,804
Time, $100,000 and over 216,150 213,778 342,022 390,103
Other time 450,561 449,395 350,293 292,501
TOTAL DEPOSITS 1,552,320 1,521,266 1,573,533 1,585,873

FHLB advances 109,100 122,193 139,668 189,356
Other borrowings 104 2,933 3,294 3,535
Junior subordinated debt 41,239 41,239 41,239 41,239
Accrued interest payable 6,775 5,810 7,677 6,535
Other liabilities 16,354 18,763 19,424 17,830
TOTAL LIABILITIES 1,725,892 1,712,204 1,784,835 1,844,368

STOCKHOLDERS' EQUITY
Preferred stock, no par - - - -
Common stock, no par 253,426 253,411 253,450 253,460
Accumulated deficit (217,219 ) (188,826 ) (163,764 ) (106,068 )
Accumulated other comprehensive income (loss), net of tax 1,332 829 102 (633 )
TOTAL STOCKHOLDERS' EQUITY 37,539 65,414 89,788 146,759
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,763,431 $ 1,777,618 $ 1,874,623 $ 1,991,127

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Three Months Ended
GAAP Non-GAAP (1) GAAP Non-GAAP (1)
Quarterly Financial Ratios, annualized: 9/30/2009 9/30/2009 6/30/2009 9/30/2008 9/30/2008
Return on average assets -6.35% -2.13% -2.34% -18.48% -2.84%
Return on average equity -175.40% -58.94% -59.45% -159.24% -24.48%
Return on tangible average equity -332.28% -111.66% -106.11% -302.72% -46.54%
Efficiency ratio (2) 86.35% 82.03% 78.78%
Non-interest income to average assets 1.05% 1.55% 1.00%
Non-interest expenses to average assets 8.60% 4.41% 19.32%
Net interest margin to average earning assets (3) 3.54% 3.35% 3.89%

Nine Months Ended
GAAP Non-GAAP (1) GAAP Non-GAAP (1)
Year to Date Financial Ratios, annualized: 9/30/2009 9/30/2009 9/30/2008 9/30/2008
Return on average assets -3.95% -2.55% -8.54% -1.63%
Return on average equity -95.98% -62.13% -69.19% -13.19%
Return on tangible average equity -165.07% -106.86% -133.62% -25.47%
Efficiency ratio 89.10% 74.00%
Non-interest income to average assets 1.29% 0.93%
Non-interest expenses to average assets 5.81% 10.55%
Net interest margin to average earning assets (3) 3.40% 4.23%

(1) Excludes goodwill impairment.
(2) Excludes intangible amortization and foreclosed assets expenses.
(3) Presented on a tax equivalent basis for tax exempt securities.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Loan Portfolio: 9/30/2009 6/30/2009 12/31/2008 9/30/2008
Commercial real estate $ 620,169 $ 641,274 $ 630,540 $ 629,536
Construction, land development and other land 229,420 275,528 388,381 431,817
Commercial and industrial 147,548 170,997 215,776 267,245
Residential real estate 189,651 196,039 200,047 192,809
Agricultural 163,895 165,501 160,944 169,154
Installment and other 20,402 24,997 28,777 33,816
Total loans 1,371,085 1,474,336 1,624,465 1,724,377
Allowance for loan losses (32,991 ) (32,690 ) (44,722 ) (36,573 )
Deferred loan fees, net of deferred costs (1,814 ) (1,939 ) (2,637 ) (2,798 )
Net loans $ 1,336,280 $ 1,439,707 $ 1,577,106 $ 1,685,006

Non-performing Assets:
Accruing loans over 90 days past due (1) $ 0 $ 0 $ 0 $ 0
Non-accrual loans (1) 100,068 122,246 91,744 81,383
Total non-performing loans $ 100,068 $ 122,246 $ 91,744 $ 81,383
Foreclosed real estate and other foreclosed assets 56,286 35,240 15,781 7,362
Total non-performing assets $ 156,354 $ 157,486 $ 107,525 $ 88,745

Restructured loans (2) $ - $ 2,938 $ 260 260

Allowance for Credit Losses:
Allowance for loan losses $ 32,991 $ 32,690 $ 44,722 $ 36,573
Reserve for unfunded commitments 402 470 660 968
Allowance for credit losses $ 33,393 $ 33,160 $ 45,382 $ 37,541

Credit Quality Ratios:
Non-performing loans to total gross loans (1) 7.30 % 8.29 % 5.65 % 4.72 %
Non-performing assets to total assets (1) 8.87 % 8.86 % 5.74 % 4.46 %
Allowance for loan loss to total gross loans 2.41 % 2.22 % 2.75 % 2.12 %
Allowance for credit losses to total gross loans 2.44 % 2.25 % 2.79 % 2.18 %
Allowance for credit losses to non-performing loans (1) 33.37 % 27.13 % 49.47 % 46.13 %

(1) Amounts and ratios shown net of government guarantees on non-performing loans of $1.4 million, $1.7 million, $1.6 million, and $1.2 million, respectively.
(2) Represents accruing restructured loans performing according to their restructured terms.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Three Months Ended Nine Months Ended
Allowance for Loan Losses: 9/30/2009 6/30/2009 9/30/2008 9/30/2009 9/30/2008
Balance, beginning of period $ 32,690 $ 40,675 $ 31,768 $ 44,722 $ 25,258
Loan loss provision 9,000 11,800 27,650 34,480 56,850
Loans charged-off (9,182 ) (20,229 ) (23,036 ) (47,354 ) (46,325 )
Recoveries 483 444 191 1,143 790
Balance, end of period $ 32,991 $ 32,690 $ 36,573 $ 32,991 $ 36,573

Reserve for Unfunded Commitments:
Balance, beginning of period $ 470 $ 660 $ 1,172 $ 660 $ 1,374
Provision for unfunded commitments (68 ) (190 ) (204 ) (258 ) (406 )
Balance, end of period $ 402 $ 470 $ 968 $ 402 $ 968

Net charge-offs to average gross loans (1) 2.40 % 5.15 % 5.15 % 4.04 % 3.42 %
Provision for loan losses to average
gross loans (1) 2.48 % 3.07 % 6.23 % 3.01 % 4.27 %

(1) Ratios are annualized.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Quarter to Date Net Interest Margin: Three Months Ended
September 30, 2009 June 30, 2009 September 30, 2008
Average Average Average
Assets Balance Interest % Balance Interest % Balance Interest %
Loans (1) $ 1,440,940 $ 21,056 5.80 % $ 1,540,177 $ 21,588 5.62 % $ 1,765,229 $ 28,149 6.34 %
Taxable securities 40,745 509 4.96 % 39,960 507 5.09 % 48,739 608 4.96 %
Non-taxable securities (2) 13,755 213 6.14 % 18,279 277 6.08 % 19,728 298 6.01 %
FHLB Stock 10,267 - 0.00 % 10,267 - 0.00 % 9,671 35 1.44 %
Overnight deposits with other banks and other 113,394 88 0.31 % 69,634 62 0.36 % 9,896 69 2.77 %
Total interest earning assets 1,619,101 21,866 5.36 % 1,678,317 22,434 5.36 % 1,853,263 29,159 6.26 %
Non-interest earning assets 156,225 126,367 232,148
Total assets $ 1,775,326 $ 1,804,684 $ 2,085,411

Liabilities
Interest bearing demand deposits $ 181,837 $ 203 0.44 % $ 153,608 $ 156 0.41 % $ 134,861 $ 175 0.52 %
Savings and MMDA deposits 392,484 1,262 1.28 % 408,872 1,444 1.42 % 478,295 2,331 1.94 %
Time deposits 667,880 4,530 2.69 % 687,698 5,209 3.04 % 646,773 6,056 3.73 %
Total interest bearing deposits 1,242,201 5,995 1.91 % 1,250,178 6,809 2.18 % 1,259,929 8,562 2.70 %
Overnight borrowings 46,126 96 0.83 % 45,219 108 0.96 % 76,570 508 2.64 %
Junior subordinated debt 41,239 633 6.09 % 41,239 643 6.25 % 41,239 670 6.46 %
Other borrowings 68,530 680 3.94 % 83,825 869 4.16 % 124,706 1,291 4.12 %
Total interest bearing liabilities 1,398,096 7,404 2.10 % 1,420,461 8,429 2.38 % 1,502,444 11,031 2.92 %
Non-interest bearing demand deposits 287,000 285,888 317,098
Other non-interest bearing liabilities 26,008 27,311 23,803
Total liabilities 1,711,104 1,733,660 1,843,345
Stockholders' Equity 64,222 71,024 242,066
Total liabilities and stockholders' equity $ 1,775,326 $ 1,804,684 $ 2,085,411

Net interest income and spread $ 14,462 3.26 % $ 14,005 2.98 % $ 18,128 3.34 %

Net interest margin to average earning assets 3.54 % 3.35 % 3.89 %

(1) Includes loans held for sale and non-performing loans in average loans. Interest income includes loan fee income.
(2) Tax-exempt securities income has been presented using a tax equivalent basis and an assumed tax rate of 34%.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Year to Date Net Interest Margin: Nine Months Ended
September 30, 2009 September 30, 2008
Average Average
Assets Balance Interest % Balance Interest %
Loans (1) $ 1,531,133 $ 65,108 5.69 % $ 1,778,661 $ 90,717 6.81 %
Taxable securities 42,080 1,577 5.01 % 51,045 1,910 5.00 %
Non-taxable securities (2) 17,027 781 6.13 % 19,389 884 6.09 %
FHLB Stock 10,042 - 0.00 % 9,525 97 1.36 %
Overnight deposits with other banks and other 71,670 185 0.35 % 6,730 159 3.16 %
Total interest earning assets 1,671,952 67,651 5.41 % 1,865,350 93,767 6.71 %
Non-interest earning assets 139,205 241,075
Total assets $ 1,811,157 $ 2,106,425

Liabilities
Interest bearing demand deposits $ 155,670 $ 491 0.42 % $ 136,977 $ 547 0.53 %
Savings and MMDA deposits 409,099 4,474 1.46 % 518,336 7,793 2.01 %
Time deposits 673,329 15,396 3.06 % 590,836 17,904 4.05 %
Total interest bearing deposits 1,238,098 20,361 2.20 % 1,246,149 26,244 2.81 %
Overnight borrowings 61,686 418 0.91 % 64,109 1,521 3.17 %
Junior subordinated debt 41,239 1,916 6.21 % 41,239 2,061 6.68 %
Other borrowings 79,955 2,452 4.10 % 148,704 4,809 4.32 %
Total interest bearing liabilities 1,420,978 25,147 2.37 % 1,500,201 34,635 3.08 %
Non-interest bearing demand deposits 289,548 322,603
Other non-interest bearing liabilities 26,166 23,648
Total liabilities 1,736,692 1,846,452
Stockholders' Equity 74,465 259,973
Total liabilities and stockholders' equity $ 1,811,157 $ 2,106,425

Net interest income and spread $ 42,504 3.04 % $ 59,132 3.63 %

Net interest margin to average earning assets 3.40 % 4.23 %

(1) Includes loans held for sale and non-performing loans in average loans. Interest income includes loan fee income.
(2) Tax-exempt securities income has been presented using a tax equivalent basis and an assumed tax rate of 34%.

AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)

Capital Ratios: Actual Adequately Capitalized Well Capitalized
Amount Ratio Amount Ratio Amount Ratio
As of September 30, 2009:
Total capital to risk weighted assets:
Company $ 84,227 5.49 % $ 122,642 8.00 % N/A N/A
Bank 87,382 5.71 % 122,512 8.00 % $ 153,140 10.00 %

Tier I capital to risk weighted assets:
Company 36,957 2.41 % 61,321 4.00 % N/A N/A
Bank 68,064 4.44 % 61,256 4.00 % 91,884 6.00 %

Leverage capital, Tier I capital to average assets:
Company 36,957 2.10 % 70,560 4.00 % N/A N/A
Bank 68,064 3.86 % 70,497 4.00 % 88,121 5.00 %

The amounts and corresponding ratios set forth in the table above for both
"adequately capitalized" and "well capitalized" information are based upon
Federal banking regulations. As a result of the Bank being subject to the Order
discussed above, it will not be immediately considered "well capitalized" by the
FDIC upon attaining the corresponding ratios shown in the table.

AmericanWest Bancorporation
Patrick J. Rusnak
President and CEO
509-232-1963
prusnak@awbank.net
or
Kelly McPhee
Communications Manager
509-232-1968
kmcphee@awbank.net

Copyright Business Wire 2009