Local Bank Changes Hands

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

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."

The Touchet Valley is the cradle of Bank of the West, which was founded by Wes Colley with the funds from area investors in 1977. Its first branch was a housed in a trailer in Walla Walla's Eastgate. "It's a sad, sad thing," said Waitsburg resident and in­vestor B.A. Keve, a niece of the late Colley. "It started to positive and upbeat. Every­body (back then) was excited about it. Now it's over for the shareholders. You don't al­ways get what you hope for." Keve said she cried when AmericanWest Bank became a half-day branch in Waits­burg. "Life's a funny game." 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. "We feel complimented by that. They like what we're doing."