Serving Waitsburg, Dayton and the Touchet Valley
SPOKANE - In a business development that's good borrowers and the Touchet Valley community but bad for shareholders and mixed for employees, the holding company of American West Bank has announced restructuring plans through Chapter 11 bankruptcy while selling its banking operation to a California-based investment company.
The sale has a local historical dimension since it means the end of the road for the investors from Walla Walla, Waitsburg and Dayton who put up the capital in the 1970s to launch the Bank of the West, whose operations in this area were later sold to AWB for stock in the new parent company.
No immediate or long-term changes are expected to any of the bank's branches, staff or business name throughout the inland Northwest, said Kelly McPhee, a spokeswoman for the Spokane-based company. The company has 58 branches, including Waitsburg and Dayton.
Accounts and banking operations are safe because the bank itself "is completely unaffected by the holding company's Chapter 11 filing," she said. "It will actually make us a stronger competitor."
Under bankruptcy protection from creditors, AmericanWest Bancorporation will submit to the court its plan to sell its banking operation to SKBHC Holding of Southern California for $6.5 million. That means that shares once traded for $26 or more will now be worthless.
Shareholders include some of the original Bank of the West investors and many current AWB employees whose jobs will be safe but whose once-lofty shares value is all but wiped out. American West Bancorp.'s shares have been declining for years as it struggled with debt and other challenges.
AWB shares traded for 24.5 cents before the announcement. According to the Seattle Times, AmericanWest Bancorporation said it doesn't expect to have sufficient assets to satisfy all of its creditors' claims and common shareholders are usually the last in line after borrowers.
"I have talked to a number of shareholders today and for them it's bittersweet," McPhee said. "It's very regrettable, but some are telling me they can actually use it as a tax write off this year and up until now they had been in a holding pattern."
Meanwhile, local branch staffs were counting their blessings while lamenting the loss of their stock value.
"We're all happy to have jobs," one local branch employee said.
The new holding company has pledged to infuse $200 million of its $700 million in capital into AWB and that means there will be plenty of money available for loans and community support projects, McPhee said.
As a result, AWB will be more assertive in the market place after the bankruptcy court approves the plan.
The Seattle Times also indicated that regulatory filings show SKBHC is led by Scott Kisting of Corona Del Mar, Calif., a former top Wells Fargo banking executive. AWB's holding company tried for two years to find investors and finally found a match in SKBHC.
"They looked at dozens of banking operations and chose us," McPhee said. " feel complimented by that. They like what we're doing."
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