AmericanWest Bancorporation, of Spokane, has sought regulatory approval to sell $30 million in securities through a public offering to increase the capital of its principal operating subsidiary, AmericanWest Bank, and to raise money for general corporate purposes.
The company filed with the U.S. Securities and Exchange Commission on May 29 a preliminary prospectus for the proposed offering. The SEC could either approve the preliminary prospectus, which would free AmericanWests underwriters to take the offering to market, or decide to review it more extensively. Patrick J. Rusnak, AmericanWests chief operating officer, says the company is forbidden from commenting on the status or pricing of the offering, including on whether the SEC has approved the preliminary prospectus.
Robert M. Daugherty, AmericanWests president and CEO, says the offering is an effort to bolster our capital. Most banks are looking for as much capital as they can get today to weather the storm caused by the problems that afflict the U.S. economy, Daugherty says.
For the first quarter of this year, AmericanWest recognized a net loss of $31.6 million, or $1.83 a diluted share, compared with net income of $2.2 million, or 19 cents a share, in the year-earlier quarter. The company took a $27 million charge in the quarter in connection with its acquisitions of Far West Bancorporation, of Provo, Utah, in April 2007 and of Columbia Trust Bancorp, of Pasco, Wash., in March 2006.
Also, AmericanWest set aside $12.8 million, or just under 2.9 percent of average loans, in the quarter to deal with potential credit losses, and as of March 31, it had increased its nonperforming assets to 2.3 percent of total assets, from 0.47 percent a year earlier.
The securities the bank plans to offer are trust preferred securities, Daugherty says. AmericanWest says it has formed a trust subsidiary, AmericanWest Capital Trust IV, for the purpose of offering the securities. The securities will give buyers an interest in the trusts assets, which will consist solely of subordinated debentures, or debt instruments, that the trust will buy from AmericanWest with the proceeds of the offering, the preliminary prospectus says. AmericanWest will pay quarterly distributions on the debentures.
To avoid diluting the value of the shares of its stockholders, the company chose to raise capital by issuing debt-backed securities rather than by selling stock, Daugherty says.
The company already has four other trust subsidiaries that it formed to offer capital securities four earlier times, and it says the total amount of subordinated debentures from those earlier offerings was $41.2 million as of March 31.
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