10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2005

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number 000-18561

AMERICANWEST BANCORPORATION

(Exact name of registrant as specified in its charter)

Washington	91-1259511
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
41 West Riverside, Suite 400, Spokane, WA	99201-0813
(Address of principal executive offices)	(Zip Code)

(509) 467-6993

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Number of Shares Outstanding
Common Stock	10,449,608 at August 1, 2005

AMERICANWEST BANCORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2005

Table of Contents

		Page
Part I Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Statement of Condition as of June 30, 2005 and December 31, 2004	3
	Condensed Consolidated Statements of Income for the Three And Six Months Ended June 30, 2005 and 2004	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	17
Part II Other Information
Item 1.	Legal Proceedings	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Item 5.	Other Information	18
Item 6.	Exhibits	21
Signatures		22

2

AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CONDITION

(unaudited)

($ in thousands)

	June 30, 2005			December 31, 2004
ASSETS
Cash and due from banks	$	32,479		$	26,915
Overnight interest bearing deposits with other banks		304			2,302
Cash and cash equivalents		32,783			29,217
Securities, available-for-sale		29,292			33,886
Loans, net of allowance for loan losses of $15,377 and $18,475, respectively		970,940			909,255
Accrued interest receivable		6,582			6,520
Premises and equipment, net		23,623			23,955
Foreclosed real estate and other foreclosed assets		3,222			4,201
Life insurance and salary continuation assets		19,318			18,912
Goodwill		12,050			12,050
Intangible assets		2,516			2,642
Other assets		7,333			8,356
TOTAL ASSETS	$	1,107,659		$	1,048,994
LIABILITIES
Noninterest bearing - demand deposits	$	179,614		$	169,579
Interest bearing deposits:
NOW and savings accounts		397,852			452,357
Time, $100,000 and over		125,809			123,006
Other time		144,959			149,856
TOTAL DEPOSITS		848,234			894,798
Short-term borrowings		124,239			24,539
Long-term borrowings		3,255			5,668
Capital lease obligations		392			416
Trust Preferred Securities		10,310			10,310
Accrued interest payable		1,113			1,000
Other liabilities		7,203			7,188
TOTAL LIABILITIES		994,746			943,919
STOCKHOLDERS’ EQUITY
Common Stock, no par, shares authorized 15 million; issued and outstanding 10,440,011 and 10,269,454, respectively		102,860			100,812
Retained earnings		10,738			4,057
Accumulated other comprehensive income, net of tax		35			206
Unearned employee common stock awards		(720	)		—
TOTAL STOCKHOLDERS’ EQUITY		112,913			105,075
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,107,659		$	1,048,994

The accompanying notes are an integral part of these statements.

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AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004

(unaudited)

($ in thousands, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 20,
	2005		2004		2005		2004
INTEREST INCOME
Interest and fees on loans	$	17,513	$	17,873	$	34,496	$	34,689
Interest on securities		328		555		671		1,013
Other interest income		21		15		31		47
TOTAL INTEREST INCOME		17,862		18,443		35,198		35,749
INTEREST EXPENSE
Interest on deposits		3,460		2,802		6,487		5,703
Interest on borrowings		612		428		1,180		725
TOTAL INTEREST EXPENSE		4,072		3,230		7,667		6,428
NET INTEREST INCOME		13,790		15,213		27,531		29,321
Provision for loan losses		190		5,710		1,265		6,710
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		13,600		9,503		26,266		22,611
NONINTEREST INCOME
Fees and service charges		1,213		1,218		2,336		2,351
Other		352		1,436		794		1,842
TOTAL NONINTEREST INCOME		1,565		2,654		3,130		4,193
NONINTEREST EXPENSE
Salaries and employee benefits		5,554		5,829		11,103		11,420
Occupancy expense, net		772		714		1,817		1,469
Equipment expense		715		626		1,519		1,305
State business and occupation tax		226		191		449		399
Foreclosed real estate and other foreclosed assets expense		353		957		419		1,776
Other		2,246		1,859		4,085		3,779
TOTAL NONINTEREST EXPENSE		9,866		10,176		19,392		20,148
INCOME BEFORE PROVISION FOR INCOME TAX EXPENSE		5,299		1,981		10,004		6,656
PROVISION FOR INCOME TAX EXPENSE		1,757		713		3,323		1,851
NET INCOME	$	3,542	$	1,268	$	6,681	$	4,805
Basic earnings per common share	$	0.34	$	0.12	$	0.65	$	0.47
Diluted earnings per common share	$	0.34	$	0.12	$	0.64	$	0.46
Basic weighted average shares outstanding		10,387,957		10,205,436		10,355,891		10,168,811
Diluted weighted average shares outstanding		10,530,674		10,525,173		10,506,664		10,514,957

The accompanying notes are an integral part of these statements.

4

AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2005 AND 2004

(unaudited)

($ in thousands)

	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	6,681		$	4,805
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses and foreclosed real estate and other		1,265			8,209
Depreciation and amortization		1,340			1,148
Gain on disposal of branch		—			(621	)
(Gain) Loss on sale of fixed assets, investments and foreclosed real estate and other foreclosed assets		27			(344	)
Changes in assets and liabilities:
Accrued interest receivable		(62	)		(282	)
Life insurance and salary continuation assets		(406	)		(422	)
Other assets		1,115			(18	)
Accrued interest payable		113			(198	)
Other liabilities		15			(2,855	)
NET CASH FROM OPERATING ACTIVITIES		10,088			9,422
CASH FLOWS FROM INVESTING ACTIVITIES
Securities available-for-sale:
Maturities, sales and principal payments		6,531			5,279
Purchases		(2,250	)		(41,609	)
Net increase in loans and leases		(64,454	)		(55,560	)
Purchase of life insurance contracts		—			(2,000	)
Purchases of premises and equipment		(1,558	)		(1,987	)
Proceeds from sale of premises and equipment		675			68
Foreclosed assets activity		2,507			3,229
NET CASH FROM INVESTING ACTIVITIES		(58,549	)		(92,580	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase/(decrease) in deposits		(46,564	)		1,942
Borrowings activity		97,287			74,260
Principal payments on capital lease obligations		(24	)		(24	)
Proceeds from issuance of capital stock, exercise of stock options and employee incentive program		1,328			1,368
Cash payments for stock repurchases		—			(1,607	)
Cash payments for sale of branch		—			(14,458	)
NET CASH FROM FINANCING ACTIVITIES		52,027			61,481
NET CHANGE IN CASH AND CASH EQUIVALENTS		3,566			(21,677	)
Cash and cash equivalents, beginning of period	$	29,217		$	48,295
Cash and cash equivalents, end of period	$	32,783		$	26,618
Supplemental Disclosures:
Cash paid during the period for:
Interest	$	7,554		$	6,642
Income taxes	$	1,468		$	2,500
Noncash Investing and Financing Activities:
Foreclosed real estate acquired in settlement of loans	$	1,504		$	5,608

The accompanying notes are an integral part of these statements.

5

AMERICANWEST BANCORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Basis of Presentation

The foregoing unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2004. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. The results of operations for the periods ended June 30, 2005 and 2004 are not necessarily indicative of the operating results for the full year.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of AmericanWest Bancorporation’s (AWBC, the Company or the Corporation) consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of AWBC’s consolidated financial position and results of operations.

Employee stock options are accounted for under the intrinsic value method as allowed under Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees. Stock options are generally granted at exercise prices not less than the fair market value of common stock on the date of grant. Under APB No. 25, no compensation expense is recognized pursuant to AWBC’s stock option plans for stock options that are granted at exercise prices not less than the fair market value of common stock on the date of grant. The following table sets out the pro forma amounts of net income and earnings per share that would have been reported had AWBC elected to follow the fair value recognition provisions of Statement of Financial Accounting Standards Board No. 123, Accounting for Stock-Based Compensation, as amended.

	Three Months Ended						Six Months Ended
( $ in thousands, except per share)	June 30, 2005			June 30, 2004			June 30, 2005			June 30, 2004
Reported Net Income	$	3,542		$	1,268		$	6,681		$	4,805
Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of tax effects		(161	)		(25	)		(343	)		(409	)
Proforma Net Income	$	3,381		$	1,243		$	6,338		$	4,396
Basic Earnings Per Share
Reported Earnings Per Share	$	0.34		$	0.12		$	0.65		$	0.47
Stock-based employee compensation, fair value		(0.01	)		(0.00	)		(0.04	)		(0.04	)
Proforma Earnings Per Share	$	0.33		$	0.12		$	0.61		$	0.43
Diluted Earnings Per Share
Reported Diluted Earnings Per Share	$	0.34		$	0.12		$	0.64		$	0.46
Stock-based employee compensation, fair value		(0.02	)		(0.00	)		(0.04	)		(0.04	)
Proforma Diluted Earnings Per Share	$	0.32		$	0.12		$	0.60		$	0.42
Fair Value Calculation Assumptions:
Risk free interest rate		4.62	%		5.00	%		4.35	%		4.05	%
Expected volatility		26.64	%		27.63	%		26.09	%		24.89	%
Expected cash dividends		0	%		0	%		0	%		0	%
Expected stock option life		8.9 years			5.0 years			8.8 years			7.5 years

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AMERICANWEST BANCORPORATION

NOTE 2. Securities

All of the securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses, net of tax, are excluded from earnings and reported as a net amount as a separate component of stockholders’ equity. Gains or losses on the sale of available-for-sale securities are determined using the specific identification method. Premiums and discounts are recognized in interest income using the effective interest method over the period to maturity. Carrying amounts and fair values at June 30, 2005 and December 31, 2004 were as follows:

	June 30, 2005				December 31, 2004
($ in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
US. Treasury Securities	$	—	$	—	$	501	$	508
Obligations of Federal Government Agencies		5,141		5,108		1,962		1,986
Obligations of states, municipalities and political subdivisions		8,684		8,824		8,728		8,886
Mortgage backed securities		5,300		5,291		9,334		9,330
Corporate securities		3,005		2,960		6,008		6,139
Other securities		7,109		7,109		7,037		7,037
TOTAL	$	29,239	$	29,292	$	33,570	$	33,886

NOTE 3. Loans and Allowance for Loan Losses

Loan detail by category as of June 30, 2005 and December 31, 2004 were as follows:

($ in thousands)	June 30, 2005			December 31, 2004
Commercial real estate	$	560,584		$	497,253
Commercial and industrial		195,388			197,912
Agricultural		126,648			122,735
Real estate construction		40,478			45,908
Real estate mortgage		33,824			32,703
Installment		19,227			22,454
Bankcards and other		10,071			8,909
Total loans, gross	$	986,220		$	927,874
Allowance for loan losses		(15,377	)		(18,475	)
Deferred loan (fees) net of deferred costs		97			(144	)
Net Loans	$	970,940		$	909,255

The allowance for loan loss is maintained at levels considered adequate by management to provide for possible loan losses. The allowance is based on management’s assessment of various factors affecting the loan portfolio, including problem loans, business conditions and loss experience, and an overall evaluation of the quality of the underlying collateral. Changes in the allowance for loan losses during the three and six months ended June 30, 2005 and 2004 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands)	2005			2004			2005			2004
Balance, beginning of period	$	16,923		$	12,505		$	18,475		$	12,453
Provision for loan losses		190			5,710			1,265			6,710
Loan charge-offs		(1,832	)		(4,728	)		(4,507	)		(5,743	)
Loan recoveries		96			524			144			591
Balance, end of period	$	15,377		$	14,011		$	15,377		$	14,011

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AMERICANWEST BANCORPORATION

NOTE 4. Comprehensive Income

Total comprehensive income, which includes net income and unrealized gains and losses on the Corporation’s available-for-sale securities, amounted to approximately $6.5 million and $4.4 million for the six months ended June 30, 2005 and 2004, respectively.

NOTE 5. Earnings Per Share

The following is a reconciliation of the numerators and denominators for basic and diluted per share computations for net income for the three and six months ended June 30, 2005 and 2004 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands, except per share)	2005		2004		2005		2004
Numerator:
Net income	$	3,542	$	1,268	$	6,681	$	4,805
Denominator:
Weighted average number of common shares outstanding		10,387,957		10,205,436		10,355,891		10,168,811
Incremental shares assumed for stock options		142,717		319,737		150,773		346,146
Total		10,530,674		10,525,173		10,506,664		10,514,957

NOTE 6. Performance Common Stock Awards

In May and June of 2005, the Company granted restricted common stock awards of 35,000 shares to certain executives. The purpose of the restricted stock awards was to promote the long-term interests of the Company and its shareholders by providing restricted stock as a means for retaining certain executives. These restricted stock awards vest between January and June, 2010, and therefore, the unamortized cost of shares not yet earned is reported as a reduction of shareholders’ equity and will be amortized ratably over a five year period as compensation expense. The agreements require that the Company will achieve a return on assets of 1.0% per year, and for every year that this goal is not achieved; the award recipients will forfeit 20% of their restricted stock. In addition, the executives must be employed by AWBC at the time of vesting or the awards are forfeited. There was no compensation expense related to the stock agreement awards for the three and six month periods ended June 30, 2005.

NOTE 7. Accounting Pronouncements

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure will no longer be an alternative. This statement will be adopted on January 1, 2006.

As permitted by Statement 123, the Company currently accounts for share-based payments to employees using Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share in Note 1 to our consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.

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AMERICANWEST BANCORPORATION

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain matters discussed or incorporated by reference in this Quarterly Report on Form 10-Q including, but not limited to, matters described in Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements about the business strategy, financial condition, results of operations, future financial targets and earnings outlook of the Corporation. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, impact of the current national and regional economy on small business loan demand in the Corporation’s market, loan delinquency rates, changes in portfolio composition, the AmericanWest Bank’s (AWB or the Bank) ability to attract quality commercial business, interest rate movements and the impact on margins such movement may cause, changes in the demographic make-up of the Corporation’s market, fluctuation in demand for the Corporation’s products and services, the Corporation’s ability to attract and retain qualified people, regulatory changes, competition with other banks and financial institutions, and other factors. For a discussion of factors that could cause actual results to differ, please see the Corporation’s prior report on Form 10-K as filed with the Securities and Exchange Commission. Words such as “targets,” “expects,” “anticipates,” “believes,” other similar expressions or future or conditional verbs such as “will,” “may,” “should,” “would,” and “could” are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereto. The Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting the Corporation under PSLRA’s safe harbor provisions.

The following discussion contains a review of the results of operations and financial condition for the second three and six months ending June 30, 2005 and 2004. This information should be read in conjunction with the financial statements and related notes appearing in this report. The reader is assumed to have access to AWBC’s Form 10-K for the year ended December 31, 2004, which contains additional information.

AmericanWest Bancorporation

AmericanWest Bancorporation (AWBC, Company or Corporation) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Corporation conducts business through its wholly-owned subsidiary, AmericanWest Bank (AWB) a state-chartered, FDIC-insured commercial bank organized under the laws of the State of Washington. The Corporation’s main office is located in Spokane, Washington.

AmericanWest Capital Trust I (Trust), a subsidiary of AWBC, was formed in September 2002 for the exclusive purpose of issuing trust preferred securities and common securities, and using the $10.3 million in proceeds from the issuance to acquire junior subordinated debentures issued by AWBC. Upon the adoption of amended FIN 46, the investment in the Trust is no longer consolidated on the Condensed Consolidated Financial Statements.

AmericanWest Bank

AWB provides a full range of banking services to small and medium-sized businesses, agricultural businesses, professionals, and consumers through 42 offices located in Eastern Washington and Northern Idaho.

The principal sources of the AWB’s revenue are 1) interest and fees on loans, 2) fees for deposit accounts and related services, 3) interest on investments and 4) interest on interest bearing deposits with other banks. AWB’s lending activities consist of term and operating loans to businesses and agricultural businesses, real estate construction and development loans, vehicle and equipment loans for both businesses and consumers, and real estate mortgage loans. AWB also offers a full line of deposit account products and related services.

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AMERICANWEST BANCORPORATION

Performance Overview

The table below summarizes the Corporation’s financial performance for the three and six months ending June 30, 2005 and 2004:

	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands except per share data)	2005		2004		% Change		2005		2004		% Change
Interest Income	$	17,862	$	18,443	-3.2	%	$	35,198	$	35,749	-1.5	%
Interest Expense		4,072		3,230	26.1	%		7,667		6,428	19.3	%
Net Interest Income		13,790		15,213	-9.4	%		27,531		29,321	-6.1	%
Provision for Loan Loss		190		5,710	-96.7	%		1,265		6,710	-81.1	%
Net Interest Income after Provision for Loan Losses		13,600		9,503	43.1	%		26,266		22,611	16.2	%
Noninterest Income		1,565		2,654	-41.0	%		3,130		4,193	-25.4	%
Noninterest Expense		9,866		10,176	-3.0	%		19,392		20,148	-3.8	%
Income before Provision for Income Tax Expense		5,299		1,981	167.5	%		10,004		6,656	50.3	%
Provision for Income Tax Expense		1,757		713	146.4	%		3,323		1,851	79.5	%
Net Income	$	3,542	$	1,268	179.3	%	$	6,681	$	4,805	39.0	%
Basic earnings per common share	$	0.34	$	0.12			$	0.65	$	0.47
Diluted earnings per common share	$	0.34	$	0.12			$	0.64	$	0.46

Net Income

The Corporation reported net income of approximately $3.5 million or $0.34 per fully diluted share for the three months ended June 30, 2005 compared to approximately $1.3 million and $0.12 for the same period in 2004. The Corporation reported net income of approximately $6.7 million or $0.64 per fully diluted share for the six month period ending June 30, 2005 as compared to approximately $4.8 million for the six month period ending June 30, 2004. The increases in net income are mainly due to a $4.0 million provision taken in the second quarter of 2004 related to one borrower which is offset by the $0.6 million gain on divesture of a branch in the second quarter of 2004. This increase is partially offset by higher provision for taxes in 2005 due mainly to historical tax credits which were recognized in 2004 and do not reoccur to the same extent during 2005. Lower net interest income during 2005 is another offset to the lower provision. Return on average assets for the six months ending June 30, 2005 and 2004 was 1.30% and 0.93%, respectively.

Net Interest Income

Net interest income was approximately $13.8 million for the three months ending June 30, 2005, a decrease of approximately $1.4 million or 9.3% from approximately $15.2 million for the three months ended June 30, 2004. The decrease in net interest income was primarily due to the increase in interest expense on deposits and borrowings of $0.7 million and $0.2 million, respectively. Interest expense on deposits was higher during 2005 due to an increase in the cost of deposits. In addition, decreases in loan income of $0.4 million and investment income of $0.2 million contributed to the decrease in net interest income. The decrease in loan income was due to lower loan yields, as average loan balances were higher during 2005. The decrease in investment income was due to lower investment yields and lower average investment balances during 2005. Net interest income for the six months ended June 30, 2005 was $27.5 million, a decrease of approximately $1.8 million or 6.1% from approximately $29.3 million for the like period in 2004.

The net interest margin decreased to 5.87% for the period ended June 30, 2005 compared to 6.34% for the similar period last year. This decrease was due to increasing deposit and borrowing costs combined with lower loan yields related to improving credit quality.

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AMERICANWEST BANCORPORATION

The following table sets forth the Corporation’s net interest margin for the six months ending June 30, 2005 and 2004:

	Six Months Ended June 30,
	2005						2004
($ in thousands)	Average Balance		Interest		%		Average Balance		Interest		%
Assets
Loans, gross	$	915,530	$	34,496	7.60	%	$	882,441	$	34,689	7.91	%
Taxable Investments		24,137		489	4.09	%		33,783		826	4.92	%
Nontaxable Investments		8,712		276	6.39	%		8,971		278	6.23	%
Overnight deposits with other banks		1,166		31	5.36	%		8,403		47	1.12	%
Total earning assets		949,545	$	35,292	7.50	%		933,598	$	35,840	7.72	%
Other assets		80,379						96,424
Total assets	$	1,029,924					$	1,030,022
Liabilities
Interest bearing deposits	$	679,334	$	6,487	1.93	%	$	715,026	$	5,703	1.60	%
Borrowings		62,922		1,180	3.78	%		55,968		725	2.61	%
Total interest bearing liabilities		742,256	$	7,667	2.08	%		770,994	$	6,428	1.68	%
Noninterest bearing deposits		169,967						152,229
Other liabilities		8,984						7,499
Total liabilities		921,207						930,722
Stockholders’ equity		108,717						99,300
Total liabilities and stockholders’ equity	$	1,029,924					$	1,030,022
Net interest income and spread					5.42	%					6.04	%
Net interest margin to average earnings assets					5.87	%					6.34	%

The above table includes nonaccrual loans in the average loan balances. Tax exempt securities income has been presented using a tax equivalent basis and an assumed tax rate of 34%.

Loan yields for the six months ended June 30, 2005 were 7.60% compared to 7.91% for the six months ended June 30, 2004. Loan yields have declined as the credit quality of the portfolio has improved with new loan originations of higher credit quality loans and write-downs of lower credit quality loans. The increase in market rates has an offsetting positive impact on loan yields. The average balance of loans was approximately $33.1 million higher during 2005. Taxable investment yields were 4.09% for the first six months of 2005 compared to 4.92% for the six months ended June 30, 2004. The main reason for this lower yield was maturities and prepayments of higher yielding investments. The average balance of taxable investments was $9.6 million lower during 2005. The yield on investments was also lower due to the suspension of dividends on Federal Home Loan Bank (FHLB) stock under the Seattle Bank’s new three-year plan which also restricts member banks from redeeming excess shares. Their board adopted this resolution on May 18, 2005 and did not declare a dividend for the second quarter of 2005. The Seattle Bank will not repurchase any class of member stock prior to the end of the statutory five-year redemption period for FHLB stock, without a waiver from the Finance Board’s Office of Supervision. The average balance of FHLB stock during the six months ended June 30, 2005 was $5.4 million and the yield was 0.8%. This compares to an average balance of $2.8 million and a yield of 4.2% during the same period during 2004.

The cost of deposits to the Company for the six months ended June 30, 2005 was 1.93% compared to 1.60% for the six months ended June 30, 2004. The increase in the cost of deposits was due to higher market interest rates. The increase of $10.0 million in noninterest bearing deposits during 2005 partially offset the impact of the increase in rates on interest bearing deposits. The average balance of interest bearing deposits was approximately $35.7 million lower during 2005. The cost of borrowings for the six months ended June 30, 2005 was 3.78% compare to 2.61% for the similar period during 2004. This was also higher due to increases in market rates. As an indication of the change in market rates, the average Fed Funds rate was 2.71% during the first six months of 2005 compared to 1.01% during the same period of 2004. The average balance of borrowings was $7.0 million higher during 2005.

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Provision for Loan Losses

The provision for loan losses for the three months ended June 30, 2005 was approximately $0.2 million as compared to approximately $5.7 million for the three months ended June 30, 2004. The provision for loan losses for the six months ended June 30, 2005 was approximately $1.3 million as compared to approximately $6.7 million for the similar period in 2004. The decrease was due mainly to a $4.0 million provision taken in the second quarter of 2004 related to one borrower relationship. In addition, the decrease was due to management’s continual assessment of specific loan characteristics in the portfolio. In general, AWBC regularly evaluates the level of provision and the allowance for loan losses for adequacy by considering changes in the nature of the loan portfolio, overall portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions that may affect a borrower’s ability to pay. Management continually monitors the economic conditions of the Corporation’s market, which includes Eastern Washington and Northern Idaho and includes this information in the analysis of its provision for loan losses. In addition, management includes general economic conditions for its analysis. The provision for loan losses is an estimate and the use of different estimates or assumptions could produce a different provision for loan loss.

Noninterest Income

Noninterest income for the three and six months ended June 30, 2005 was approximately $1.6 million and $3.1 million, respectively. This represented a decrease from approximately $2.7 million and $4.2 million, respectively, for the similar periods in 2004. The decreases are mainly due to the gain on divesture of a branch in the second quarter of 2004 which was recorded at $0.6 million and gains on the sale of foreclosed real estate and other foreclosed assets which have decreased approximately $0.3 million from the prior year.

Noninterest Expense

Noninterest expense decreased modestly by $0.3 million or 3.0% to $9.9 million for the three months ended June 30, 2005, from $10.2 million for the three months ended June 30, 2004. This change is mainly due to a decrease of $0.6 million in foreclosed real estate and other foreclosed assets for the three month period.

Noninterest expense for the six months ended June 30, 2005 decreased $0.8 million or 3.8% to $19.4 million as compared to $20.1 million for the similar period in 2004. This change is also mainly due to a net decrease in foreclosed real estate and other foreclosed assets expense of $1.4 million for the six month period. This decrease in noninterest expense was partially offset by increases in occupancy and equipment expenses. Occupancy expense is higher for the first six months of 2005 due to escalation clauses in existing lease agreements and to the addition of a leased building in downtown Spokane for the corporate headquarters that was placed into service in December of 2004. Equipment expense was modestly higher due to new technology investments during 2005.

Provision for Income Tax Expense

The provision for income tax expense as a percentage of income before provision for income tax expense has increased to 33.2% for the six months ended June 30, 2005 compared to 27.8% in 2004. There were two buildings placed into service during the six months ended June 30, 2004 in which AWBC had purchased historical rehabilitation tax credits. The Corporation recognized these tax credits during the six months ended June 30, 2004 causing the effective tax rate to decrease during that period. The provision for income tax expense for 2005 includes a modest amount of tax credits.

Nonperforming Assets

Nonperforming assets include loans that are 90 or more days past due or in nonaccrual status, and real estate and other loan collateral acquired through foreclosure. Total nonperforming assets decreased to approximately $18.7 million or 1.69% of total assets at June 30, 2005 compared to approximately $33.3 million or 3.26% of assets at March 31, 2005. At December 31, 2004, total nonperforming assets were approximately $28.5 million or 2.71% of total assets. The majority of nonperforming assets are comprised of several loans and properties discussed below.

The Company has classified approximately $5.3 million in loans to a wine grape vineyard and winery as nonaccrual due to continuing operating losses and inadequate cash flow to service debt. The entity continues to operate and is marketing the real estate.

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The Company has acquired title to farm land in Touchet, Washington that it is currently carrying in foreclosed real estate and other foreclosed assets. It is carried at approximately $1.3 million and is being farmed at this time. The property is currently being marketed for sale.

The Company has acquired title to an ice skating complex in Spokane that it is currently carrying in foreclosed real estate and other foreclosed assets. It is carried at approximately $1.3 million and is being operated as an ice skating rink. The asset is being carried at estimated market value and is being marketed as both an operating facility and as an alternative use facility. Subsequent to quarter end, the Company has accepted an offer to purchase the facility for approximately $1.3 million. The prospective buyer is performing due diligence at this time, and the potential sale is scheduled to close in the Company’s third quarter.

The Company has classified approximately $0.9 million in loans to a residential real estate developer as nonaccrual due to the loans maturing, and the borrower being unable to repay the loans within terms. The borrower is attempting to market the property, and the Company is evaluating advancing additional funds to realize maximum return on the collateral.

The Company has classified approximately $0.8 million in loans to a farm operation as nonaccrual due to continued operating shortfalls and inability to demonstrate debt service capacity. The borrower continues to operate, and a portion of the loans is protected by FSA Guaranty. The borrower is completing the 2005 crop season, and then the Company will evaluate options for full collection.

The Company has classified approximately $0.7 million in loans to a construction company as nonaccrual due to continued inability to demonstrate adequate cash flow to service debt. The entity continues to operate and the borrower is compiling a plan that will be evaluated by the Company for adequacy in reducing the amount of the loans to allow debt service capacity.

The Company has classified approximately $0.5 million in loans to a farm operation as nonaccrual due to the borrower’s inability to meet repayment terms of the note. The entity continues to operate. The borrower has accepted an offer from a purchaser of the collateral securing this note that will result in complete payoff of principal and collection of interest. The potential sale is scheduled to close in the Company’s third fiscal quarter.

The Company has evaluated collateral coverage of the principal balance of the assets that are nonperforming and has provided for a specific impairment related to these assets of $2.0 million at this time.

Financial Condition

The Company’s consolidated assets at June 30, 2005 and December 31, 2004 were approximately $1.1 billion and $1.0 billion, respectively. Cash and cash equivalents increased to approximately $32.8 million at June 30, 2005 from $29.2 million at December 31, 2004.

Total stockholders’ equity was approximately $112.9 million at June 30, 2005, up from approximately $105.1 million at December 31, 2004. The increase in stockholders’ equity was mostly due to net income and the exercise of stock options by employees and directors.

Investment Portfolio

The Corporation’s investment portfolio decreased from approximately $33.9 million at December 31, 2004 to approximately $29.3 million at June 30, 2005. This decrease was due mainly to principal payments received and maturities. There was also a called investment which was offset by the purchase of a new investment. All securities are classified as available-for–sale and recorded at the market value. Management believes that this classification provides greater flexibility to respond to interest rate changes and liquidity needs.

Loan Portfolio

Total gross loans increased approximately $58.3 million or 6.3% to approximately $986.2 million as of June 30, 2005 from approximately $927.9 million at December 31, 2004. This includes an increase of $63.3 million or 12.7% in commercial real estate loans during the year, offset by small fluctuations in other categories. A majority of this increase was due to the purchase of a pool of approximately $76.2 million of multi-family loans which occurred late in June of 2005. These adjustable rate loans were purchased to enhance net income while new

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lending initiatives are being implemented to support increased loan originations. Commercial real estate loans continue to be a significant percentage of the total portfolio at 56.8% as of June 30, 2005 compared to 53.6% at December 31, 2004.

The major classifications of loans at June 30, 2005 and December 31, 2004 can be found in the Notes to Condensed Consolidated Financial Statements.

Allowance for Loan Losses

At June 30, 2005, the Corporation’s allowance for loan losses was approximately $15.4 million or 1.56% of total gross loans. This compares to approximately $18.5 million or 1.99% at December 31, 2004. The allowance for loan losses is increased by charges to income through the provision for loan losses and decreased by charge-offs, net of recoveries. Loans are charged to the allowance when management believes the collection of principal is unlikely. Management reports that in most cases charge-offs of loans during the first six months of 2005 were similar to the related reserves as of December 31, 2004.

In assessing the adequacy of the allowance for loan losses, management utilizes an analysis of credits for objectively analyzing recent historical loan loss experience and projecting future allowance requirements. The analysis provides an inherent loss rate by risk ratings. Each category of risk rating is assigned a projected loss value based upon general historic valuations and current management expectations for future losses. Additionally, management utilizes an analysis of impaired loans, determining the collateral coverage of loans to assess the adequacy of the allowance. Management also compares projected future allowance requirements with current nonperforming loan conditions and historical loss statistics. Finally, management utilizes judgment based on individual loan evaluations, delay in receipt of customer financial information, related credit facilities, volatility of economic and customer specific conditions or concentrations, and delinquency rates in assessing allowance for loan losses.

The majority of the Company’s loans are to small and medium-sized businesses, agricultural businesses, professionals and consumers in Eastern Washington and Northern Idaho and are secured by residential and commercial real estate, crops and business inventory and receivables. Real estate values in this area remain stable. Prices for agricultural commodities also remain at normal levels. However, significant, long-term changes in either of these underlying factors could affect the collectability of a material portion of the Company’s loans outstanding. Each of these factors is also considered in the analysis of assessing the adequacy of the allowance for loan losses.

Management believes that the allowances for loan losses and other real estate owned are adequate. Management uses currently available information to recognize losses on loans and foreclosed real estate and other foreclosed assets; however, future additions to the allowances may be necessary based on changes in economic conditions and borrower or loan characteristics.

Deposits

The Company’s primary source of funds is customer deposits. To attract and retain deposits, the Corporation offers a wide variety of account types and maturities, both interest bearing and noninterest bearing. Some account types have additional services bundled with them, such as insurance, travel discounts, free checks and free or discounted access to other bank services. Interest rates on accounts are determined by management based on the Company’s funding needs and market conditions and can change as frequently as daily.

At June 30, 2005, total deposits were approximately $848.2 million, a decrease of approximately $46.6 million from $894.8 million at December 31, 2004. NOW and savings accounts, which include money market accounts, decreased approximately $54.5 million to $397.9 million at June 30, 2005 from $452.4 million at December 31, 2004. The Corporation also experienced a decrease of approximately $2.1 million in time deposits to $270.8 million at June 30, 2005 from $272.9 million December 31, 2004. Late in the first quarter of 2005, management put into place an incentive program for employees to grow the deposit base through attracting core deposit funding. Management also rolled out a new retail product suite and provided sales training throughout the financial centers during the second quarter.

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Liquidity and Capital Resources

Management actively analyzes and manages the Corporation’s liquidity position. The objective of liquidity management is to ensure the availability of sufficient cash flows to meet all financial commitments and to capitalize on opportunities for profitable business expansion. Management believes that the Corporation’s cash flow will be sufficient to support its existing operations for the foreseeable future.

As indicated on the Corporation’s Condensed Consolidated Statement of Cash Flows, net cash from operating activities for the six months ended June 30, 2005 contributed approximately $10.1 million to liquidity compared to approximately $9.4 million for the six months ended June 30, 2004. This increase is due mainly to the changes in asset and liability accounts from the prior year.

In addition to the strategy noted for deposits above, the Corporation uses short-term and long-term borrowings, in the form of advances from the Federal Home Loan Bank of Seattle, as a source of funding. With maturities ranging from overnight to 30 years, these advances are used to provide a ready source of liquidity for the operations and are a tool the Corporation uses to manage its interest rate risk. The Corporation also purchases Fed Funds as a source of short-term funding.

At June 30, 2005, short-term and long-term borrowings stood at approximately $124.2 million and $3.3 million, respectively. These balances represented an increase of approximately $99.7 million in short-term borrowings and a decrease of approximately $2.4 million in long-term borrowings in comparison to December 31, 2004 balances, which were $24.5 million and $5.7 million, respectively. Overall, borrowings have increased to replace the decline in deposit balances and to support asset growth. As of June 30, 2005 and December 31, 2004, AWB had lines of credit available of approximately $39.3 million and $198.3, respectively. These lines were available for short-term and long-term maturities up to 30 years at market interest rates. Borrowings from the Federal Home Loan Bank of Seattle are secured with loan collateral and the Federal Funds Purchases are unsecured. AWB also pledges securities to the Federal Reserve Bank from time to time.

As a federally-regulated bank holding corporation, the Corporation is required to maintain minimum levels of capital at all times at both AWBC and AWB. Bank regulatory agencies have promulgated regulations that measure the Corporation’s capital in three ways. Tier one capital, currently comprised of stockholders’ equity and trust preferred securities, is measured against assets both on a book basis and on a risk-weighted basis according to standardized risk categories for specific types of assets. In addition, tier one capital is adjusted for certain other items, most prominently the allowance for loan losses and certain intangibles, to arrive at defined total regulatory capital. This amount is then measured against risk-weighted assets.

The table below lists AWB and AWBC’s capital ratios relative to regulatory requirements at June 30, 2005:

Capital Ratio	Regulatory Standard for “Well Capitalized” Rating		AWBC Actual Ratio		AWB Actual Ratio
Tier One Capital to Average Total Assets	5.00	%	10.74	%	10.53	%
Tier One Capital to Risk Weighted Assets	6.00	%	10.73	%	10.52	%
Total Capital to Risk Weighted Assets	10.00	%	11.98	%	11.78	%

However, the Bank is subject to a minimum level of capital exceeding the requirement of a well capitalized bank. See the “Regulatory Matters” below.

Regulatory Matters

As previously disclosed in the Company’s December 31, 2004 annual report on Form 10-K/A number 2, the Company’s wholly-owned subsidiary, AWB, entered into a memorandum of understanding with the Federal Deposit Insurance Corporation (FDIC) relating to the Bank’s compliance controls, processes and training established by prior management. In addition, on December 15, 2004, the Bank received a directive from the Washington Department of Financial Institutions (DFI) requiring it to take various actions to improve the Bank’s

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asset quality and loan administration, to maintain a minimum level of capital exceeding that required of well capitalized banks under the applicable regulations (which the Bank met as of the date of the directive and continues to meet) and to revise its policies and procedures with respect to liquidity and funds management.

The Company’s Board and the new Executive Management team, who were hired from and after September, 2004, are committed to resolving the issues raised by the regulators. The Bank has devoted, and continues to devote, significant effort in that regard. The Board and Management are of the opinion that changes in policy, procedures and personnel which have occurred under the new Management were appropriate and would have occurred even in the absence of the supervisory actions. The Bank submits quarterly reports to the FDIC and DFI relating to the supervisory actions, the latest of which was filed for the period ending June 30, 2005, and Management is of the opinion that the Bank is presently in substantial compliance with the supervisory actions.

The supervisory actions will remain in effect until modified or terminated by the FDIC and the DFI, respectively. The Company believes that the resolution of the identified regulatory concerns will result in such termination late this year or early next year, subject to determination by future examinations of the Bank by the FDIC and DFI.

These supervisory actions may adversely affect the Company’s and the Bank’s ability to obtain regulatory approval for future initiatives requiring regulatory action, such as acquisitions. However, neither this effect nor the memorandum of understanding nor the supervisory directive, including the financial impact of the Bank’s compliance with them, are expected to have a material adverse impact on the financial condition or results of operations of the Company or the Bank.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Management considers interest rate risk to be a market risk that could have a significant effect on the financial condition and results of operations of AWBC. General economic conditions, regulatory policy and competition in the marketplace may affect interest income and the cost of funds.

The Company’s operating strategies focus on asset/liability management (ALM) in order to provide stable net interest income growth by protecting its earnings from undue interest rate risk. AWBC follows an ALM policy for managing exposure to interest rate risk. The strategy of AWBC has been to maintain, to the extent possible, a balanced position between rate-sensitive assets and liabilities. AWBC does not use derivatives, including forward and futures contracts, options, and swaps to manage its market and interest rate risks. All of AWBC’s transactions are denominated in U.S. dollars.

AWBC monitors the sensitivity of its assets and liabilities with respect to changes in interest rates and maturities and directs the allocation of their funds accordingly. Approximately 62% of AWBC’s loan portfolio had interest rates which adjust with the Bank’s reference interest rates as of June 30, 2005. This is an increase from 55% as of December 31, 2004. Fixed rate loans are generally made with terms of five years or less.

Management utilizes an interest rate simulation model to estimate the sensitivity of net interest income to changes in market interest rates. Such estimates are based upon a number of assumptions for each scenario, including the level of balance sheet growth, deposit repricing characteristics and the rate of prepayments. Interest rate sensitivity is a function of the repricing characteristics of AWBC’s interest earning assets and interest bearing liabilities. These repricing characteristics are the time frames within which the interest bearing assets and liabilities are subject to change in interest rates either at replacement, repricing or maturity during the life of the instruments. Interest rate sensitivity management focuses on the maturity structure of assets and liabilities and their repricing characteristics during periods of changes in market interest rates. Effective interest rate sensitivity management seeks to ensure that both assets and liabilities respond to changes in interest rates within an acceptable timeframe, thereby minimizing the impact of interest rate changes on net interest income. Further, while management believes that individually and in the aggregate its interest rate simulation model assumptions are reasonable, the complexity of the simulation modeling process results in a sophisticated estimate, but not an absolute precise calculation of exposure.

In management’s opinion, there have been no material changes in reported market risks faced by AWBC since the end of the most recent fiscal year. AWBC remains slightly asset sensitive under parallel interest rate

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scenarios of +200 basis points and -100 basis points. This means that our assets reprice more quickly than our liabilities, so net interest income usually rises when interest rates rise.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures: As of the end of the period covered by this report and pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the Exchange Act), AWBC’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness and design of the Corporation’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) and concluded that the Corporation’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the Corporation’s reports filed with the Securities and Exchange Commission pursuant to the Exchange Act is accumulated and communicated to management including the Corporation’s Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, as of the end of the period covered by this report, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting information required to be disclosed by the Corporation, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in Internal Controls: In addition and as of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter to which this report relates that have materially affected or are reasonably likely to materially affect, the internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

Periodically and in the ordinary course of business, various claims and lawsuits are brought against AWBC or AWB, such as claims to enforce liens, condemnation proceedings on properties in which the Bank held a security interest, claims involving the making and servicing of real property loans and other issues incident to the business of AWBC and AWB. In the opinion of management, the ultimate liability, if any, resulting from such claims or lawsuits will not have a material adverse effect on the financial position or results of operations of AWBC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not have any unregistered sales of equity securities during the period covered by this report.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

a. Annual meeting of shareholders was held on April 26, 2005.

b. Proxies for the annual meeting were solicited pursuant to Regulation 14 under the Act.

c. Matters voted upon at the meeting

Proposal 1 – Election of Directors

	For	Withhold
Gary M. Bolyard	7,562,214	871,282
Robert M. Daugherty	7,561,636	871,860
Craig D. Eerkes	7,566,567	866,929
James Rand Elliott	7,728,845	704,651
Donald H. Livingstone	7,602,054	831,442
Allen Ketelsen	7,703,662	729,834
Donald H. Swartz, II	7,734,361	699,135
P. Mike Taylor	7,756,731	676,765

Item 5. Other Information

AmericanWest Bancorporation (the “Company”) has entered in employment contracts with five executive officers as follows.

1. Diane Kelleher. Effective June 6, 2005, the Company and its wholly-owned subsidiary AmericanWest Bank entered into a two year agreement with Diane Kelleher to serve as Executive Vice President and Chief Financial Officer of the Company and its wholly-owned subsidiary AmericanWest Bank (the “Bank”). Under the terms of her employment agreement, Ms. Kelleher will be paid a salary of $150,000 per annum and will be entitled to participate in any annual and longer-term incentive programs that are adopted by either the Company or the Bank and that cover employees in positions comparable to that of Ms. Kelleher. Further, at the discretion of the Chief Executive Officer, Ms. Kelleher may be awarded a bonus up to 50% of her base salary. Ms. Kelleher is also eligible for grants of performance shares of the Company as may from time to time be granted her at the discretion of the Company. Ms. Kelleher’s employment agreement will be automatically renewed for a successive two-year term unless either party gives written notice of non-renewal six months prior to the end of any term.

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If Ms. Kelleher terminates her contract for good reason or is terminated without cause, she will be entitled to her salary for the remainder of her contract, but not less than one year’s salary. In addition, she will be entitled to her pro rata portion of any incentive compensation earned but not yet paid, and all non-vested performance shares or stock options shall immediately vest. If Ms. Kelleher is terminated without cause or terminates her contract for good reason within two years of a change in control, she will be entitled to salary equal to the greater of (1) two years or (2) the number of months remaining under her contract, including any renewal term then in effect.

Further, on June 6, 2005, the Company granted Ms. Kelleher 7,500 shares of common stock all of which will vest on June 6, 2010 provided that Ms. Kelleher is employed on June 5, 2010. Provided, however, for each full calendar year between January 1, 2005 and January 1, 2010 for which the Company has a return on average assets of less than one percent, twenty percent of the performance shares that would have otherwise vested on June 6, 2010, shall lapse.

2. Greg Hansen. Effective May 23, 2005, AmericanWest Bank entered into a two year agreement with Greg Hansen to serve as Executive Vice President and Director of Commercial Lending. Under the terms of his employment agreement, Mr. Hansen will be paid a salary of $150,000 per annum and will be entitled to participate in any annual and longer-term incentive programs that are adopted by the Bank and that cover employees in positions comparable to that of Mr. Hansen, provided that for 2005, Mr. Hansen will receive a bonus of not less than $35,000 to be paid on or before February 1, 2006. In addition, Mr. Hansen received $25,000 upon the execution of his employment agreement. Mr. Hansen is also eligible for grants of performance shares of the Company as may from time to time be granted him at the discretion of the Bank and the Company. Mr. Hansen’s employment agreement will be automatically renewed for a successive two-year term unless either party gives written notice of non-renewal six months prior to the end of any term.

If Mr. Hansen terminates his contract for good reason or is terminated without cause, he will be entitled to his salary for the remainder of his contract, but not less than one year’s salary. In addition, he will be entitled to his pro rata portion of any incentive compensation earned but not yet paid, and all non-vested performance shares or stock options shall immediately vest. If Mr. Hansen is terminated without cause or terminates his contract for good reason within two years of a change in control, he will be entitled to salary equal to the greater of (1) two years or (2) the number of months remaining under his contract, including any renewal term then in effect.

Further, effective May 23, 2005, the Company granted Mr. Hansen 7,500 shares of common stock all of which will vest on May 22, 2010 provided that Mr. Hansen is employed on May 22, 2010. Provided, however, for each full calendar year between January 1, 2005 and January 1, 2010 for which the Company has a return on average assets of less than one percent, twenty percent of the performance shares that would have otherwise vested on May 22, 2010 shall lapse.

3. Rick Shamberger. On June 6, 2005, AmericanWest Bank entered into a two year agreement with an effective date of January 28, 2005, with Rick Shamberger to serve as Executive Vice President and Chief Credit Officer. Under the terms of his employment agreement, Mr. Shamberger will be paid a salary of $150,000 per annum and will be entitled to participate in any annual and longer-term incentive programs that are adopted by the Bank and that cover employees in positions comparable to that of Mr. Shamberger. In addition, Mr. Shamberger is eligible for grants of performance shares of the Company as may from time to time be granted him at the discretion of the Company. Mr. Shamberger’s employment agreement will be automatically renewed for a successive two-year term unless either party gives written notice of non-renewal six months prior to the end of any term.

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If Mr. Shamberger terminates his contract for good reason or is terminated without cause, he will be entitled to his salary for the remainder of his contract, but not less than one year’s salary. In addition, he will be entitled to his pro rata portion of any incentive compensation earned but not yet paid, and all non-vested performance shares or stock options shall immediately vest. If Mr. Shamberger is terminated without cause or terminates his contract for good reason within two years of a change in control, he will be entitled to salary equal to the greater of (1) two years or (2) the number of months remaining under his contract, including any renewal term then in effect.

Further, on June 6, 2005, the Company granted Mr. Shamberger 7,500 shares of common stock all of which will vest on January 2, 2010 provided that Mr. Shamberger is employed on December 31, 2009. Provided, however, for each full calendar year between January 1, 2005 and January 1, 2010 for which the Company has a return on average assets of less than one percent, twenty percent of the performance shares that would have otherwise vested on January 2, 2010 shall lapse.

4. Nicole Sherman. On June 6, 2005, the Bank entered into a two year agreement with an effective date of January 28, 2005 with Nicole Sherman to serve as Executive Vice President and Director of Retail Banking. Under the terms of her employment agreement, Ms. Sherman will be paid a salary of $150,000 per annum and will be entitled to participate in any annual and longer-term incentive programs that are adopted by the Bank and that cover employees in positions comparable to that of Ms. Sherman. In addition, Ms. Sherman is also eligible for grants of performance shares of the Company as may from time to time be granted her at the discretion of the Company. Ms. Sherman’s employment agreement will be automatically renewed for a successive two-year term unless either party gives written notice of non-renewal six months prior to the end of any term.

If Ms. Sherman terminates her contract for good reason or is terminated without cause, she will be entitled to her salary for the remainder of her contract, but not less than one year’s salary. In addition, she will be entitled to her pro rata portion of any incentive compensation earned but not yet paid, and all non-vested performance shares or stock options shall immediately vest. If Ms. Sherman is terminated without cause or terminates her contract for good reason within two years of a change in control, she will be entitled to salary equal to the greater of (1) two years or (2) the number of months remaining under her contract, including any renewal term then in effect.

Further, on June 6, 2005, the Company granted Ms. Sherman 7,500 shares of common stock all of which will vest on January 4, 2010 provided that Ms. Sherman is employed on January 3, 2010. Provided, however, for each full calendar year between January 1, 2005 and January 1, 2010 for which the Company has a return on average assets of less than one percent, twenty percent of the performance shares that would have otherwise vested on January 4, 2010 shall lapse.

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AMERICANWEST BANCORPORATION

5. R. Blair Reynolds. On June 6, 2005, the Company and its wholly-owned subsidiary AmericanWest Bank entered into a one year agreement with an effective date of January 25, 2005, with R. Blair Reynolds to serve as Senior Vice President and General Counsel of the Company and Bank. Under the terms of his employment agreement, Mr. Reynolds will be paid a salary of $150,000 per annum and will be entitled to participate in any annual and longer-term incentive programs that are adopted by either the Company or the Bank and that cover employees in positions comparable to that of Mr. Reynolds. In addition, Mr. Reynolds is eligible for grants of performance shares of the Company as may from time to time be granted him at the discretion of the Company. Mr. Reynolds’ employment agreement will be automatically renewed for a one-year term unless either party gives written notice of non-renewal six months prior to the end of any term.

If Mr. Reynolds terminates his contract for good reason or is terminated without cause, he will be entitled to his salary for the remainder of his contract, but not less than one year’s salary. In addition, he will be entitled to his pro rata portion of any incentive compensation earned but not yet paid, and all non-vested performance shares or stock options shall immediately vest. If Mr. Reynolds is terminated without cause or terminates his contract for good reason within one year of a change in control, he will be entitled to salary equal to the greater of (1) one year or (2) the number of months remaining under his contract, including any renewal term then in effect.

Further, on June 6, 2005, the Company granted Mr. Reynolds 5,000 shares of common stock all of which will vest on January 25, 2010 provided that Mr. Reynolds is employed on January 24, 2010. Provided, however, for each full calendar year between January 1, 2005 and January 1, 2010 for which the Company has a return on average assets of less than one percent, twenty percent of the performance shares that would otherwise vested on January 25, 2010 shall lapse.

Item 6. Exhibits

a. Exhibits. The exhibits filed as part of this report are as follows:

10.17	Employment contract for Diane Kelleher
10.18	Employment contract for R. Blair Reynolds
10.19	Employment contract for Rick Shamberger
10.20	Employment contract for Nicole Sherman
10.21	Employment contract for Greg Hansen
10.22	Grant of performance shares to Diane Kelleher
10.23	Grant of performance shares to R. Blair Reynolds
10.24	Grant of performance shares to Rick Shamberger
10.25	Grant of performance shares to Nicole Sherman
10.26	Grant of performance shares to Greg Hansen
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

21

AMERICANWEST BANCORPORATION

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on August 8, 2005.

AMERICANWEST BANCORPORATION

\s\ Robert M. Daugherty

Robert M. Daugherty, President and
Chief Executive Officer

\s\ Diane L. Kelleher

Diane L. Kelleher, Executive Vice President and
Chief Financial Officer

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EX-10.17

Exhibit 10.17

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into and effective (subject to regulatory approval) as of June 6, 2005 (the “Effective Date”) by and between AmericanWest Bancorporation, a Washington corporation (“AWBC”), its wholly owned subsidiary AmericanWest Bank, a Washington state-chartered bank (the “Bank” and, together with AWBC, “Employer”), and Diane Kelleher (“Executive”).

RECITALS

WHEREAS, Executive is being employed by Employer, and Executive is accepting such employment, as Executive Vice President/Chief Financial Officer of AWBC and the Bank; and

WHEREAS, Employer and Executive each desire to formalize the employment relationship by entering into this Employment Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Definitions; Construction. Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in Section 16. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement.

2. Employment; Title. Employer hereby employs Executive, and Executive hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement. Executive’s title shall be “Executive Vice President/Chief Executive Officer”.

3. Term of Employment. The term of this Agreement (“Term”) is two years, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automatically renewed for successive two-year terms (each a “Renewal Term”) unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or the parties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Employer, (i) Executive shall be deemed an at-will employee of Employer, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of her employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination, together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options granted to Executive, consistent with the terms of any such grant; provided, however, that paragraphs (b) and (c) of Section 11 of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Employer without Cause such that Executive’s rights and Employer’s obligations thereunder

shall continue with respect to any subsequent termination of Executive’s employment with Employer as described therein.

4. Duties. Executive will report directly to the President and Chief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to her from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conduct herself so as to maintain and increase the goodwill and reputation of Employer and its business and abide by all codes of ethics or other professional duties applicable to Executive. In her capacity as Executive Vice President/Chief Executive Officer, Executive shall perform the customary duties of Executive Vice President/Chief Executive Officer of a Washington commercial bank and bank holding company, including but not limited to:

(a) Oversee and direct fiscal operations for AWBC and the Bank, including budgeting, tax, accounting, purchasing, real estate, long range forecasting and insurance;

(b) Supervise the Controller relating to providing and directing procedures and computer systems necessary to maintain proper records and to afford adequate accounting controls and services, and direct the accounts payable, payroll and fixed assets accounting activities of AWBC and the Bank;

(c) Appraise on an on-going basis Employer’s financial position and issue periodic reports on Employer’s financial stability, liquidity and growth;

(d) Oversee and direct the preparation and issuance of AWBC’s annual report;

(e) Direct and analyze studies of general economic, business and financial conditions and their impact on the policies and operations of AWBC and the Bank; analyze operational issues affecting functional groups and the corporate group, and determine their financial impact;

(f) Direct and coordinate the establishment of budget programs; coordinate tax reporting programs and investor relations activities; analyze, consolidate and direct all cost accounting procedures together with other statistical and routine reports; .

(g) Maintain a good relationship with Employer’s Board, management, shareholders, other financial institutions and the investment community;

(h) Coordinate with other executive officers in the development of strategic plans and objectives for Employer;

and such other duties as are set forth in Executive’s job description or as may be assigned from time to time by Employer’s Board or Chief Executive Officer.

5. Extent of Service. Executive shall devote her entire business time, attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of Section 13) or from serving

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on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with her responsibilities to Employer.

6. Compensation.

(a) Salary. Employer shall pay Executive a base salary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Employer but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performance for the most recent performance period and other relevant factors.

(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that of Executive. At the discretion of the Chief Executive Officer, Executive may be awarded a bonus of up to fifty percent (50%) of her base salary, subject to the Bank’s overall performance and her specific contributions towards profitability.

(c) Performance Stock Awards and Stock Options.

(i) Discretionary Performance Shares. Employer may from time to time grant Executive shares of AWBC common stock (the “Discretionary Performance Shares”) as a Performance Stock award as Employer, at Employer’s sole discretion, may see fit. Any such Discretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Discretionary Performance Shares.

(ii) Stock Options. Employer may from time to time grant Executive stock options to purchase shares of AWBC common stock (the “Stock Options”) at the closing price of AWBC’s common stock on the date of grant as Employer, at Employer’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock option agreement, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Stock Options. All such Stock Options shall be “incentive stock options” within the meaning of the Code.

(d) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by her in the performance of her duties during the Term, subject to the timely presentment of appropriate vouchers and receipts in accordance with Employer’s policies.

(e) Relocation Expenses. Executive shall be entitled to reimbursement of reasonable relocation expenses incurred in her relocation to Spokane, including but not limited to the cost of temporary housing for a period not to exceed two (2) months.

(f) Deferred Compensation. Executive may, at her option, defer income from all or part of her base salary and bonuses through a Deferred Compensation Plan that is acceptable to Employer, which acceptance shall not be unreasonably withheld.

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7. Employee Benefits. Executive shall be entitled to participate in employee benefit plans or programs (including but not limited to retirement plans) of Employer, if any, to the extent that her position, tenure, salary, age, health and other qualifications make her eligible to participate, subject to the rules and regulations applicable thereto. Employer shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

8. Vacation. Executive shall be entitled to vacation of four (4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize her responsibilities; provided, that at least once each year Executive must be absent from her duties with Employer for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and Chief Executive Officer.

9. Surety Bond. Executive agrees to furnish all information and take any other steps necessary to enable Employer to obtain and maintain a fidelity bond conditioned on the rendering of a true account by Executive of all moneys, goods or other property which may come into the custody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the bond shall be paid by Employer. If Executive cannot personally qualify for a surety bond at any time during the Term, Employer may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause.

10. Termination. Notwithstanding the provisions of Section 3, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under Section 11 are duly made) under the following circumstances:

(a) Death. This Agreement shall terminate upon Executive’s death.

(b) Disability. If Executive becomes Disabled, Employer may terminate Executive’s employment hereunder by providing her written notice thereof, and such termination will be effective upon delivery of such notice.

(c) Resignation without Good Reason. Executive may terminate her employment with Employer at any time without Good Reason (as defined in Section 16) by giving Employer two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(d) Resignation for Good Reason. Executive may terminate her employment with Employer for Good Reason (as defined in Section 16) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of her intent to terminate her employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer, such notice shall describe in reasonable detail the alleged breach. If Employer cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Employer’s receipt of such notice, Executive shall either rescind her notice

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of intent to terminate and continue her employment under this Agreement, or terminate her employment under Section 10(c), in which case her notice of breach under this Section 10(d) shall be deemed to satisfy the notice requirement under Section 10(c). If Employer fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day period following Employer’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate her employment as provided in Section 10(c), her employment shall terminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(e) Involuntary Termination Without Cause. Employer may terminate Executive’s employment at any time without Cause by giving thirty (30) days’ written notice thereof to Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Employer specifies in the notice.

(f) Involuntary Termination for Cause. Employer may terminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice.

11. Benefits on Termination of Employment. If Executive’s employment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows:

(a) Death; Disability; Resignation without Good Reason; Termination for Cause.

If Executive’s employment is terminated as a result of death, Disability, resignation without Good Reason or termination for Cause pursuant to subparagraphs (a), (b), (c) or (f), respectively, of Section 10, Executive shall receive:

(1) her base salary through the date her employment terminates;

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll procedures; and

(3) reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed.

(b) Change of Control.

(1) If, within two (2) years following the effective date of a Change of Control (as defined in Section 16), Executive terminates her employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), Executive shall receive:

(i) An amount equal to Executive’s then-current annual base salary for the greater period of (A) two (2) years or (B) the number of months remaining in the Term, including any Renewal Term then in effect;

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(ii) An amount equal to the total amount of bonus paid to Executive during the calendar year immediately preceding any such termination, less any bonus paid Executive during the calendar year in which such termination occurs;

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iv) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive.

(2) The payment to which Executive is entitled pursuant to subparagraphs (i), (ii) and (iii) of Section 11(b)(1) shall be paid in a single installment within forty-five (45) days following the last day on which she performs services as an employee of Employer (with no percent value or other discount) or, at Executive’s option, on a deferred basis (with no premium).

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(b) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this Section 11(b), together with any other payments or benefits received from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then the payment due under Section 11(b)(1)(i) shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount.

(c) Resignation for Good Reason; Termination without Cause.

(1) If Executive terminates her employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), and such termination is not within two (2) years following a Change of Control, Executive shall receive:

(i) Continued payment, in accordance with Employer’s standard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any Renewal Term then in effect, but not less than for a period of one (1) year;

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(ii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iii) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(iv) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options which have been granted to Executive prior to the date of termination.

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(c) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(d) Benefits. For the three (3) calendar months immediately following the effective date of Executive’s resignation for Good Reason pursuant to Section 10(d) or Employer’s termination of Executive without Cause pursuant to Section 10(e), Executive (and, where applicable, her dependents) shall be entitled to continue participation in the group insurance plans maintained by Employer, including life, disability and health insurance programs, as if she were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to her annual salary in effect immediately prior to such termination. To the extent that Employer finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Employer shall provide Executive with individual policies which offer at least the same level of coverage and which impose not more than the same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connection with new employment, Employer’s obligation to provide coverage under this Section 11(d) shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Employer is required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) shall commence upon Executive’s election to participate therein at such time as coverage under this Section 11(d) terminates, and continue for such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at her own cost and expense and that failure by her to submit timely payment of premiums therefor will result in cancellation of COBRA coverage. Executive’s rights under other employee benefit plans in which she may have participated will be determined in accordance with the written plan documents governing those plans.

(e) No Other Payments or Benefits. Except as otherwise expressly provided in this Section 11 or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which she performs services as an employee of Employer.

12. Proprietary Information.

(a) Executive agrees to comply fully with Employer’s policies relating to non-disclosure of Employer’s trade secrets and proprietary information and processes, including

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information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing, Executive will not, whether during or after her employment with Employer, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executive make use of any such property for her own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after her employment; provided, that after her employment ceases, this provision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain without Employer’s consent).

(b) Trade secrets, proprietary information, and processes shall not be deemed to include information which is:

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive;

(2) received from a third party without restriction and without breach of this Agreement;

(3) approved for release by written authorization of Employer; or

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this Section 12(b)(4), Executive shall give Employer prior written notice before such disclosure is made.

(c) Executive agrees that in the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Employer all property belonging to Employer, including all keys, pass cards, identification cards and all documents, equipment and materials of any nature pertaining to Executive’s employment with Employer. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or place of residence, or in any other location under Executive’s control.

(d) This Section shall survive the expiration or any earlier termination of this Agreement.

13. Noncompetition.

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) one year following termination of her employment for any reason or (ii) the balance of the Term remaining (not including any Renewal Term), if any (such longer period of time being the “Restricted Period”), Executive will not become involved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,” employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business.

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(b) No Solicitation. While Executive is employed pursuant to this Agreement and during the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of AWBC or the Bank to leave their employment or (2) any customers of the Bank to remove their business from the Bank (or any successor thereto), or to participate in any manner in a Competing Business.

(c) Employment Outside Washington and Idaho. Nothing in this Section 13 shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long as Executive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states of Washington or Idaho.

(d) Competing Business. “Competing Business” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company in formation) that competes with, or will compete in the states of Washington or Idaho, with AWBC or the Bank (or any successor thereto).

14. Enforcement.

(a) Scope of Covenants. Employer and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Employer, the agreements referred to in Sections 12 and 13 (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Employer’s confidential information, goodwill and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to compete with Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable.

(b) Injunctive Relief. Executive acknowledges that Employer will suffer immediate and irreparable harm that will not be compensable by damages alone if Executive repudiates or breaches any of the provisions of Sections 12 or 13 or threatens or attempts to do so. For this reason, under these circumstances, Employer, in addition to and without limitation of any other rights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Employer will not be required to post a bond as a condition for the granting of this relief.

(c) Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 12 and 13 and that Employer is entitled to require her to comply with those Sections. Sections 12, 13 and this Section 14 will survive termination of this Agreement. Executive represents that if her employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that Employer’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.

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15. Successors.

(a) Employer’s Successors. Employer shall require any successor to all or substantially all of Employer’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent as Employer would be required to perform if there were no succession. Employer’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breach of Employer’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in Section 11(b).

(b) Executive’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it being agreed by Executive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement.

16. Definition of Terms. The following terms used in this Agreement when capitalized have the following meanings:

(a) “Board of Directors” means AWBC’s board of directors.

(b) “Cause” means any one or more of the following:

(1) Executive’s willful misfeasance or gross negligence in the performance of her duties;

(2) Executive’s conviction of a crime in connection with her duties;

(3) Executive’s conduct that is demonstrably and significantly harmful to AWBC or the Bank, as reasonably determined by the Board of Directors on advice from legal counsel; or

(4) Executive cannot personally qualify for a surety bond as required by Section 9.

(c) “Change of Control” means a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of AWBC or the Bank, within the meaning of Section 280G of the Code; provided, however, that an internal reorganization of AWBC and its subsidiaries shall not constitute a Change of Control.

(d) “Code” means the United States Internal Revenue Code of 1986, as amended.

(e) “Disability” and “Disabled” means that Executive has been unable to perform the essential functions of her job under this Agreement, with or without reasonable

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accommodation, for a period of three (3) consecutive months as the result of her incapacity due to physical or mental illness.

(f) “Good Reason” means any of:

(1) a material reduction in Executive’s compensation under Section 6 or benefits under Sections 7 or 8,

(2) a material reduction in Executive’s title or responsibilities,

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from her residence in Spokane, Washington is increased by more than forty (40) miles,

(4) failure of Employer’s successor to assume and perform this Agreement as contemplated by Section 15(a), or

(5) any material breach by Employer of this Agreement.

17. Miscellaneous.

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at her residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the President and Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure.

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failure is due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this Section 16(c), in every case the delay or failure to perform must be beyond the control and without the fault or negligence of the party claiming excusable delay.

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other than that certain Agreement for Grant of Performance Shares entered into as of June 6, 2005, whether written or oral, regarding Executive’s employment with Employer and all rights, privileges and benefits related thereto. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

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(e) Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

(f) Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

(g) Authority to Contract. Employer warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Employer is a party or by which it may be bound. Employer further warrants and represents that the individual executing this Agreement on behalf of Employer has the full power and authority to bind Employer to the terms hereof and has been authorized to do so in accordance with Employer’s corporate organization.

(h) Dispute Resolution.

(1) Any controversy or claim between Employer and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association (“AAA”) or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code. Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this Section 16(h). The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction.

(2) If any arbitration, legal action or other proceeding is brought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

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(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from her independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact on her rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 6^th day of June, 2005, effective as of the day herein first above written.

EXECUTIVE		AMERICANWEST BANCORPORATION
By	/s/ Diane Kelleher	By	/s/ Robert M. Daugherty
	Diane Kelleher		Robert M. Daugherty
			President and Chief Executive Officer
		AMERICANWEST BANK
		By	/s/ Robert M. Daugherty
			Robert M. Daugherty
			President and Chief Executive Officer

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EX-10.18

Exhibit 10.18

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into and effective (subject to regulatory approval) as of January 25, 2005 (the “Effective Date”) by and between AmericanWest Bancorporation, a Washington corporation (“AWBC”), its wholly owned subsidiary AmericanWest Bank, a Washington state-chartered bank (the “Bank” and, together with AWBC, “Employer”), and R. Blair Reynolds (“Executive”).

RECITALS

WHEREAS, Executive is currently employed by Employer as the Senior Vice President and General Counsel of AWBC and the Bank; and

WHEREAS, Employer and Executive each desire to formalize the employment relationship by entering into this Employment Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Definitions; Construction. Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in Section 16. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement.

2. Employment; Title. Employer hereby employs Executive, and Executive hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement. Executive’s title shall be “Senior Vice President and General Counsel” of AWBC and of the Bank.

3. Term of Employment. The term of this Agreement (“Term”) is one year, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automatically renewed for successive one-year terms (each a “Renewal Term”) unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or the parties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Employer, (i) Executive shall be deemed an at-will employee of Employer, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of his employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination, together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options granted to Executive, consistent with the terms of any such grant; provided, however, that paragraphs (b) and (c) of Section 11 of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Employer without Cause such that Executive’s rights and Employer’s obligations thereunder

shall continue with respect to any subsequent termination of Executive’s employment with Employer as described therein.

4. Duties. Executive will report directly to the President and Chief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to him from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conduct himself so as to maintain and increase the goodwill and reputation of Employer and its business and abide by all codes of ethics or other professional duties applicable to Executive. In his capacity as Senior Vice President and General Counsel, Executive shall perform the customary duties of Senior Vice President and General Counsel of a Washington commercial bank holding company, including but not limited to:

(a) Coordinate and oversee legal and regulatory compliance affairs of Employer;

(b) Render advice to Employer’s Board, executive officers and staff on legal issues relating to the business of Employer;

(c) Maintain a good relationship with regulatory authorities;

(d) Maintain a good relationship with Employer’s Board, management and shareholders;

(e) Coordinate with other executive officers in the development of strategic plans and objectives for Employer;

and such other duties as are set forth in Executive’s job description or as may be assigned from time to time by Employer’s Board or Chief Executive Officer.

5. Extent of Service. Executive shall devote his entire business time, attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of Section 13) or from serving on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with his responsibilities to Employer.

6. Compensation.

(a) Salary. Employer shall pay Executive a base salary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Employer but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performance for the most recent performance period and other relevant factors.

(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that of Executive.

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(c) Performance Stock Awards and Stock Options.

(i) Discretionary Performance Shares. Employer may from time to time grant Executive shares of AWBC common stock (the “Discretionary Performance Shares”) as a Performance Stock award as Employer, at Employer’s sole discretion, may see fit. Any such Discretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Discretionary Performance Shares.

(ii) Stock Options. Employer may from time to time grant Executive stock options to purchase shares of AWBC common stock (the “Stock Options”) at the closing price of AWBC’s common stock on the date of grant as Employer, at Employer’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock option agreement, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Stock Options. All such Stock Options shall be “incentive stock options” within the meaning of the Code.

(d) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by him in the performance of his duties during the Term, subject to the timely presentment of appropriate vouchers and receipts in accordance with Employer’s policies.

(e) Deferred Compensation. Executive may, at his option, defer income from all or part of his base salary and bonuses through a Deferred Compensation Plan that is acceptable to Employer, which acceptance shall not be unreasonably withheld.

7. Employee Benefits. Executive shall be entitled to participate in employee benefit plans or programs (including but not limited to retirement plans) of Employer, if any, to the extent that his position, tenure, salary, age, health and other qualifications make him eligible to participate, subject to the rules and regulations applicable thereto. Employer shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

8. Vacation. Executive shall be entitled to vacation of four (4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize his responsibilities; provided, that at least once each year Executive must be absent from his duties with Employer for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and Chief Executive Officer.

9. Surety Bond. Executive agrees to furnish all information and take any other steps necessary to enable Employer to obtain and maintain a fidelity bond conditioned on the rendering of a true account by Executive of all moneys, goods or other property which may come into the custody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the

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bond shall be paid by Employer. If Executive cannot personally qualify for a surety bond at any time during the Term, Employer may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause.

10. Termination. Notwithstanding the provisions of Section 3, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under Section 11 are duly made) under the following circumstances:

(a) Death. This Agreement shall terminate upon Executive’s death.

(b) Disability. If Executive becomes Disabled, Employer may terminate Executive’s employment hereunder by providing him written notice thereof, and such termination will be effective upon delivery of such notice.

(c) Resignation without Good Reason. Executive may terminate his employment with Employer at any time without Good Reason (as defined in Section 16) by giving Employer two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(d) Resignation for Good Reason. Executive may terminate his employment with Employer for Good Reason (as defined in Section 16) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of his intent to terminate his employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer, such notice shall describe in reasonable detail the alleged breach. If Employer cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Employer’s receipt of such notice, Executive shall either rescind his notice of intent to terminate and continue his employment under this Agreement, or terminate his employment under Section 10(c), in which case his notice of breach under this Section 10(d) shall be deemed to satisfy the notice requirement under Section 10(c). If Employer fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day period following Employer’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate his employment as provided in Section 10(c), his employment shall terminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(e) Involuntary Termination Without Cause. Employer may terminate Executive’s employment at any time without Cause by giving thirty (30) days’ written notice thereof to Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Employer specifies in the notice.

(f) Involuntary Termination for Cause. Employer may terminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice.

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11. Benefits on Termination of Employment. If Executive’s employment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows:

(a) Death; Disability; Resignation without Good Reason; Termination for Cause.

If Executive’s employment is terminated as a result of death, Disability, resignation without Good Reason or termination for Cause pursuant to subparagraphs (a), (b), (c) or (f), respectively, of Section 10, Executive shall receive:

(1) his base salary through the date his employment terminates;

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll procedures; and

(3) reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed.

(b) Change of Control.

(1) If, within one (1) year following the effective date of a Change of Control (as defined in Section 16), Executive terminates his employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), Executive shall receive:

(i) An amount equal to Executive’s then-current annual base salary for the greater period of (A) one (1) year or (B) the number of months remaining in the Term, including any Renewal Term then in effect;

(ii) An amount equal to the total amount of bonus paid to Executive during the calendar year immediately preceding any such termination, less any bonus paid Executive during the calendar year in which such termination occurs;

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iv) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive.

(2) The payment to which Executive is entitled pursuant to subparagraphs (i), (ii) and (iii) of Section 11(b)(1) shall be paid in a single installment within forty-five (45) days following the last day on which he performs services as an employee of Employer (with no percent value or other discount) or, at Executive’s option, on a deferred basis (with no premium).

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(b) (whether by seeking new employment or otherwise),

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and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this Section 11(b), together with any other payments or benefits received from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then the payment due under Section 11(b)(1)(i) shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount.

(c) Resignation for Good Reason; Termination without Cause.

(1) If Executive terminates his employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), and such termination is not within one (1) year following a Change of Control, Executive shall receive:

(i) Continued payment, in accordance with Employer’s standard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any Renewal Term then in effect, but not less than for a period of one (1) year;

(ii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iii) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(iv) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options which have been granted to Executive prior to the date of termination.

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(c) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(d) Benefits. For the three (3) calendar months immediately following the effective date of Executive’s resignation for Good Reason pursuant to Section 10(d) or Employer’s termination of Executive without Cause pursuant to Section 10(e), Executive (and, where applicable, his dependents) shall be entitled to continue participation in the group insurance plans maintained by Employer, including life, disability and health insurance programs, as if he were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to his annual salary in effect immediately prior to such termination. To the extent that Employer finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Employer shall provide Executive with individual policies which offer at least the same level of coverage and which impose not more than the

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same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connection with new employment, Employer’s obligation to provide coverage under this Section 11(d) shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Employer is required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) shall commence upon Executive’s election to participate therein at such time as coverage under this Section 11(d) terminates, and continue for such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at his own cost and expense and that failure by him to submit timely payment of premiums therefor will result in cancellation of COBRA coverage. Executive’s rights under other employee benefit plans in which he may have participated will be determined in accordance with the written plan documents governing those plans.

(e) No Other Payments or Benefits. Except as otherwise expressly provided in this Section 11 or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which he performs services as an employee of Employer.

12. Proprietary Information.

(a) Executive agrees to comply fully with Employer’s policies relating to non-disclosure of Employer’s trade secrets and proprietary information and processes, including information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing, Executive will not, whether during or after his employment with Employer, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executive make use of any such property for his own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after his employment; provided, that after his employment ceases, this provision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain without Employer’s consent).

(b) Trade secrets, proprietary information, and processes shall not be deemed to include information which is:

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive;

(2) received from a third party without restriction and without breach of this Agreement;

(3) approved for release by written authorization of Employer; or

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this Section 12(b)(4), Executive shall give Employer prior written notice before such disclosure is made.

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(c) Executive agrees that in the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Employer all property belonging to Employer, including all keys, pass cards, identification cards and all documents, equipment and materials of any nature pertaining to Executive’s employment with Employer. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or place of residence, or in any other location under Executive’s control.

(d) This Section shall survive the expiration or any earlier termination of this Agreement.

13. Noncompetition.

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) one year following termination of his employment for any reason or (ii) the balance of the Term remaining (not including any Renewal Term), if any (such longer period of time being the “Restricted Period”), Executive will not become involved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,” employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business.

(b) No Solicitation. While Executive is employed pursuant to this Agreement and during the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of AWBC or the Bank to leave their employment or (2) any customers of the Bank to remove their business from the Bank (or any successor thereto), or to participate in any manner in a Competing Business.

(c) Employment Outside Washington and Idaho. Nothing in this Section 13 shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long as Executive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states of Washington or Idaho.

(d) Competing Business. “Competing Business” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company in formation) that competes with, or will compete in the states of Washington or Idaho, with AWBC or the Bank (or any successor thereto).

14. Enforcement.

(a) Scope of Covenants. Employer and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Employer, the agreements referred to in Sections 12 and 13 (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Employer’s confidential information, goodwill and other protectable interests. If a court of competent

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jurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to compete with Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable.

(b) Injunctive Relief. Executive acknowledges that Employer will suffer immediate and irreparable harm that will not be compensable by damages alone if Executive repudiates or breaches any of the provisions of Sections 12 or 13 or threatens or attempts to do so. For this reason, under these circumstances, Employer, in addition to and without limitation of any other rights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Employer will not be required to post a bond as a condition for the granting of this relief.

(c) Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 12 and 13 and that Employer is entitled to require him to comply with those Sections. Sections 12, 13 and this Section 14 will survive termination of this Agreement. Executive represents that if his employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that Employer’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.

15. Successors.

(a) Employer’s Successors. Employer shall require any successor to all or substantially all of Employer’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent as Employer would be required to perform if there were no succession. Employer’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breach of Employer’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in Section 11(b).

(b) Executive’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it being agreed by Executive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement.

16. Definition of Terms. The following terms used in this Agreement when capitalized have the following meanings:

(a) “Board of Directors” means AWBC’s board of directors.

(b) “Cause” means any one or more of the following:

(1) Executive’s willful misfeasance or gross negligence in the performance of his duties;

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(2) Executive’s conviction of a crime in connection with his duties;

(3) Executive’s conduct that is demonstrably and significantly harmful to AWBC or the Bank, as reasonably determined by the Board of Directors on advice from legal counsel; or

(4) Executive cannot personally qualify for a surety bond as required by Section 9.

(c) “Change of Control” means a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of AWBC or the Bank, within the meaning of Section 280G of the Code; provided, however, that an internal reorganization of AWBC and its subsidiaries shall not constitute a Change of Control.

(d) “Code” means the United States Internal Revenue Code of 1986, as amended.

(e) “Disability” and “Disabled” means that Executive has been unable to perform the essential functions of his job under this Agreement, with or without reasonable accommodation, for a period of three (3) consecutive months as the result of his incapacity due to physical or mental illness.

(f) “Good Reason” means any of:

(1) a material reduction in Executive’s compensation under Section 6 or benefits under Sections 7 or 8,

(2) a material reduction in Executive’s title or responsibilities,

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from his residence in Spokane, Washington is increased by more than forty (40) miles,

(4) failure of Employer’s successor to assume and perform this Agreement as contemplated by Section 15(a), or

(5) any material breach by Employer of this Agreement.

17. Miscellaneous.

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at his residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the President

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and Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure.

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failure is due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this Section 16(c), in every case the delay or failure to perform must be beyond the control and without the fault or negligence of the party claiming excusable delay.

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other than that certain Agreement for Grant of Performance Shares entered into as of June 6, 2005, whether written or oral, regarding Executive’s employment with Employer and all rights, privileges and benefits related thereto. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

(e) Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

(f) Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

(g) Authority to Contract. Employer warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Employer is a party or by which it may be bound. Employer further warrants and represents that the individual executing this Agreement on behalf of Employer has the full power and authority to bind Employer to the terms hereof and has been authorized to do so in accordance with Employer’s corporate organization.

(h) Dispute Resolution.

(1) Any controversy or claim between Employer and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association

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(“AAA”) or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code. Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this Section 16(h). The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction.

(2) If any arbitration, legal action or other proceeding is brought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from his independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact on his rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 6^th day of June, 2005, effective as of the day herein first above written.

EXECUTIVE		AMERICANWEST BANCORPORATION
By	/s/ R. Blair Reynolds	By	/s/ Robert M. Daugherty
	R. Blair Reynolds		Robert M. Daugherty President and Chief Executive Officer
		AMERICANWEST BANK
		By	/s/ Robert M. Daugherty
			Robert M. Daugherty President and Chief Executive Officer

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EX-10.19

Exhibit 10.19

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into and effective (subject to regulatory approval) as of January 28, 2005 (the “Effective Date”) by and between AmericanWest Bank, a Washington state-chartered bank (“Employer”), and Rick Shamberger (“Executive”).

RECITALS

WHEREAS, Executive is currently employed by Employer as its Executive Vice President and Chief Credit Officer, and

WHEREAS, Employer and Executive each desire to formalize the employment relationship by entering into this Employment Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Definitions; Construction. Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in Section 16. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement.

2. Employment; Title. Employer hereby employs Executive, and Executive hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement. Executive’s title shall be “Executive Vice President and Chief Credit Officer”.

3. Term of Employment. The term of this Agreement (“Term”) is two years, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automatically renewed for successive two-year terms (each a “Renewal Term”) unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or the parties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Employer, (i) Executive shall be deemed an at-will employee of Employer, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of his employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination, together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options granted to Executive by Employer’s parent holding company, AmericanWest Bancorporation (“AWBC”), consistent with the terms of any such grant; provided, however, that paragraphs (b) and (c) of Section 11 of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Employer without Cause such that Executive’s rights and Employer’s obligations thereunder shall continue with respect to any subsequent termination of Executive’s employment with Employer as described therein.

4. Duties. Executive will report directly to the President and Chief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to him from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conduct himself so as to maintain and increase the goodwill and reputation of Employer and its business and abide by all codes of ethics or other professional duties applicable to Executive. In his capacity as Executive Vice President and Chief Credit Officer, Executive shall perform the customary duties of Executive Vice President and Chief Credit Officer of a Washington commercial bank, including but not limited to:

(a) Direct, manage and supervise the lending and centralized loan activities of Employer;

(b) Approve/reject loans within his lending authority and recommend on loans in excess of his lending authority;

(c) Initiate, develop and monitor implementation of Employer’s lending policies and procedures;

(d) Maintain a good relationship with Employer’s Board, management and shareholders;

(e) Coordinate with other executive officers in the development of strategic plans and objectives for Employer;

and such other duties as are set forth in Executive’s job description or as may be assigned from time to time by Employer’s Board or Chief Executive Officer.

5. Extent of Service. Executive shall devote his entire business time, attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of Section 13) or from serving on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with his responsibilities to Employer.

6. Compensation.

(a) Salary. Employer shall pay Executive a base salary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Employer but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performance for the most recent performance period and other relevant factors.

(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that of Executive.

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(c) Performance Stock Awards and Stock Options.

(i) Discretionary Performance Shares. Executive may from time to time be granted shares of AWBC common stock (the “Discretionary Performance Shares”) as a Performance Stock award as AWBC, at AWBC’s sole discretion, may see fit. Any such Discretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Discretionary Performance Shares.

(ii) Stock Options. Executive may from time to time be granted stock options to purchase shares of AWBC common stock (the “Stock Options”) at the closing price of AWBC’s common stock on the date of grant as AWBC, at AWBC’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock option agreement, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Stock Options. All such Stock Options shall be “incentive stock options” within the meaning of the Code.

(d) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by him in the performance of his duties during the Term, subject to the timely presentment of appropriate vouchers and receipts in accordance with Employer’s policies.

(e) Deferred Compensation. Executive may, at his option, defer income from all or part of his base salary and bonuses through a Deferred Compensation Plan that is acceptable to Employer, which acceptance shall not be unreasonably withheld.

7. Employee Benefits. Executive shall be entitled to participate in employee benefit plans or programs (including but not limited to retirement plans) of Employer, if any, to the extent that his position, tenure, salary, age, health and other qualifications make him eligible to participate, subject to the rules and regulations applicable thereto. Employer shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

8. Vacation. Executive shall be entitled to vacation of four (4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize his responsibilities; provided, that at least once each year Executive must be absent from his duties with Employer for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and Chief Executive Officer.

9. Surety Bond. Executive agrees to furnish all information and take any other steps necessary to enable Employer to obtain and maintain a fidelity bond conditioned on the rendering of a true account by Executive of all moneys, goods or other property which may come into the custody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the

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bond shall be paid by Employer. If Executive cannot personally qualify for a surety bond at any time during the Term, Employer may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause.

10. Termination. Notwithstanding the provisions of Section 3, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under Section 11 are duly made) under the following circumstances:

(a) Death. This Agreement shall terminate upon Executive’s death.

(b) Disability. If Executive becomes Disabled, Employer may terminate Executive’s employment hereunder by providing him written notice thereof, and such termination will be effective upon delivery of such notice.

(c) Resignation without Good Reason. Executive may terminate his employment with Employer at any time without Good Reason (as defined in Section 16) by giving Employer two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(d) Resignation for Good Reason. Executive may terminate his employment with Employer for Good Reason (as defined in Section 16) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of his intent to terminate his employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer, such notice shall describe in reasonable detail the alleged breach. If Employer cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Employer’s receipt of such notice, Executive shall either rescind his notice of intent to terminate and continue his employment under this Agreement, or terminate his employment under Section 10(c), in which case his notice of breach under this Section 10(d) shall be deemed to satisfy the notice requirement under Section 10(c). If Employer fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day period following Employer’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate his employment as provided in Section 10(c), his employment shall terminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(e) Involuntary Termination Without Cause. Employer may terminate Executive’s employment at any time without Cause by giving thirty (30) days’ written notice thereof to Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Employer specifies in the notice.

(f) Involuntary Termination for Cause. Employer may terminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice.

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11. Benefits on Termination of Employment. If Executive’s employment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows:

(a) Death; Disability; Resignation without Good Reason; Termination for Cause.

If Executive’s employment is terminated as a result of death, Disability, resignation without Good Reason or termination for Cause pursuant to subparagraphs (a), (b), (c) or (f), respectively, of Section 10, Executive shall receive:

(1) his base salary through the date his employment terminates;

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll procedures; and

(3) reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed.

(b) Change of Control.

(1) If, within two (2) years following the effective date of a Change of Control (as defined in Section 16), Executive terminates his employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), Executive shall receive:

(i) An amount equal to Executive’s then-current annual base salary for the greater period of (A) two (2) years or (B) the number of months remaining in the Term, including any Renewal Term then in effect;

(ii) An amount equal to the total amount of bonus paid to Executive during the calendar year immediately preceding any such termination, less any bonus paid Executive during the calendar year in which such termination occurs;

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iv) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive.

(2) The payment to which Executive is entitled pursuant to subparagraphs (i), (ii) and (iii) of Section 11(b)(1) shall be paid in a single installment within forty-five (45) days following the last day on which he performs services as an employee of Employer (with no percent value or other discount) or, at Executive’s option, on a deferred basis (with no premium).

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(b) (whether by seeking new employment or otherwise),

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and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this Section 11(b), together with any other payments or benefits received from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then the payment due under Section 11(b)(1)(i) shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount.

(c) Resignation for Good Reason; Termination without Cause.

(1) If Executive terminates his employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), and such termination is not within two (2) years following a Change of Control, Executive shall receive:

(i) Continued payment, in accordance with Employer’s standard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any Renewal Term then in effect, but not less than for a period of one (1) year;

(ii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iii) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(iv) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options which have been granted to Executive prior to the date of termination.

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(c) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(d) Benefits. For the three (3) calendar months immediately following the effective date of Executive’s resignation for Good Reason pursuant to Section 10(d) or Employer’s termination of Executive without Cause pursuant to Section 10(e), Executive (and, where applicable, his dependents) shall be entitled to continue participation in the group insurance plans maintained by Employer, including life, disability and health insurance programs, as if he were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to his annual salary in effect immediately prior to such termination. To the extent that Employer finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Employer shall provide Executive with individual policies which offer at least the same level of coverage and which impose not more than the

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same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connection with new employment, Employer’s obligation to provide coverage under this Section 11(d) shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Employer is required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) shall commence upon Executive’s election to participate therein at such time as coverage under this Section 11(d) terminates, and continue for such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at his own cost and expense and that failure by him to submit timely payment of premiums therefor will result in cancellation of COBRA coverage. Executive’s rights under other employee benefit plans in which he may have participated will be determined in accordance with the written plan documents governing those plans.

(e) No Other Payments or Benefits. Except as otherwise expressly provided in this Section 11 or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which he performs services as an employee of Employer.

12. Proprietary Information.

(a) Executive agrees to comply fully with Employer’s policies relating to non-disclosure of Employer’s trade secrets and proprietary information and processes, including information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing, Executive will not, whether during or after his employment with Employer, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executive make use of any such property for his own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after his employment; provided, that after his employment ceases, this provision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain without Employer’s consent).

(b) Trade secrets, proprietary information, and processes shall not be deemed to include information which is:

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive;

(2) received from a third party without restriction and without breach of this Agreement;

(3) approved for release by written authorization of Employer; or

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this Section 12(b)(4), Executive shall give Employer prior written notice before such disclosure is made.

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(c) Executive agrees that in the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Employer all property belonging to Employer, including all keys, pass cards, identification cards and all documents, equipment and materials of any nature pertaining to Executive’s employment with Employer. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or place of residence, or in any other location under Executive’s control.

(d) This Section shall survive the expiration or any earlier termination of this Agreement.

13. Noncompetition.

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) one year following termination of his employment for any reason or (ii) the balance of the Term remaining (not including any Renewal Term), if any (such longer period of time being the “Restricted Period”), Executive will not become involved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,” employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business.

(b) No Solicitation. While Executive is employed pursuant to this Agreement and during the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of Employer or AWBC to leave their employment or (2) any customers of Employer to remove their business from AmericanWest Bank (or any successor thereto), or to participate in any manner in a Competing Business.

(c) Employment Outside Washington and Idaho. Nothing in this Section 13 shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long as Executive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states of Washington or Idaho.

(d) Competing Business. “Competing Business” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company in formation) that competes with, or will compete in the states of Washington or Idaho, with AWBC or AmericanWest Bank (or any successor thereto).

14. Enforcement.

(a) Scope of Covenants. Employer and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Employer, the agreements referred to in Sections 12 and 13 (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Employer’s confidential information, goodwill and other protectable interests. If a court of competent

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jurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to compete with Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable.

(b) Injunctive Relief. Executive acknowledges that Employer will suffer immediate and irreparable harm that will not be compensable by damages alone if Executive repudiates or breaches any of the provisions of Sections 12 or 13 or threatens or attempts to do so. For this reason, under these circumstances, Employer, in addition to and without limitation of any other rights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Employer will not be required to post a bond as a condition for the granting of this relief.

(c) Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 12 and 13 and that Employer is entitled to require him to comply with those Sections. Sections 12, 13 and this Section 14 will survive termination of this Agreement. Executive represents that if his employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that Employer’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.

15. Successors.

(a) Employer’s Successors. Employer shall require any successor to all or substantially all of Employer’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent as Employer would be required to perform if there were no succession. Employer’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breach of Employer’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in Section 11(b).

(b) Executive’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it being agreed by Executive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement.

16. Definition of Terms. The following terms used in this Agreement when capitalized have the following meanings:

(a) “Board of Directors” means Employer’s board of directors.

(b) “Cause” means any one or more of the following:

(1) Executive’s willful misfeasance or gross negligence in the performance of his duties;

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(2) Executive’s conviction of a crime in connection with his duties;

(3) Executive’s conduct that is demonstrably and significantly harmful to Employer or AWBC, as reasonably determined by the Board of Directors on advice from legal counsel; or

(4) Executive cannot personally qualify for a surety bond as required by Section 9.

(c) “Change of Control” means a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of AWBC or AmericanWest Bank, within the meaning of Section 280G of the Code; provided, however, that an internal reorganization of AWBC and its subsidiaries shall not constitute a Change of Control.

(d) “Code” means the United States Internal Revenue Code of 1986, as amended.

(e) “Disability” and “Disabled” means that Executive has been unable to perform the essential functions of his job under this Agreement, with or without reasonable accommodation, for a period of three (3) consecutive months as the result of his incapacity due to physical or mental illness.

(f) “Good Reason” means any of:

(1) a material reduction in Executive’s compensation under Section 6 or benefits under Sections 7 or 8,

(2) a material reduction in Executive’s title or responsibilities,

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from his residence in Spokane, Washington is increased by more than forty (40) miles,

(4) failure of Employer’s successor to assume and perform this Agreement as contemplated by Section 15(a), or

(5) any material breach by Employer of this Agreement.

17. Miscellaneous.

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at his residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the President

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and Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure.

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failure is due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this Section 16(c), in every case the delay or failure to perform must be beyond the control and without the fault or negligence of the party claiming excusable delay.

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other than that certain Agreement for Grant of Performance Shares entered into as of January 1, 2005, whether written or oral, regarding Executive’s employment with Employer and all rights, privileges and benefits related thereto. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

(e) Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

(f) Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

(g) Authority to Contract. Employer warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Employer is a party or by which it may be bound. Employer further warrants and represents that the individual executing this Agreement on behalf of Employer has the full power and authority to bind Employer to the terms hereof and has been authorized to do so in accordance with Employer’s corporate organization.

(h) Dispute Resolution.

(1) Any controversy or claim between Employer and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association

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(“AAA”) or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code. Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this Section 16(h). The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction.

(2) If any arbitration, legal action or other proceeding is brought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from his independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact on his rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 6^th day of June, 2005, effective as of the day herein first above written.

EXECUTIVE		AMERICANWEST BANK
By	/s/ Rick Shamberger	By	/s/ Robert M. Daugherty
	Rick Shamberger		Robert M. Daugherty
			President and Chief Executive Officer

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EX-10.20

Exhibit 10.20

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into and effective (subject to regulatory approval) as of January 28, 2005 (the “Effective Date”) by and between AmericanWest Bank, a Washington state-chartered bank (“Employer”), and Nicole Sherman (“Executive”).

RECITALS

WHEREAS, Executive is currently employed by Employer as its Executive Vice President/Director of Retail Banking, and

WHEREAS, Employer and Executive each desire to formalize the employment relationship by entering into this Employment Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Definitions; Construction. Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in Section 16. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement.

2. Employment; Title. Employer hereby employs Executive, and Executive hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement. Executive’s title shall be “Executive Vice President/Director of Retail Banking”.

3. Term of Employment. The term of this Agreement (“Term”) is two years, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automatically renewed for successive two-year terms (each a “Renewal Term”) unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or the parties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Employer, (i) Executive shall be deemed an at-will employee of Employer, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of her employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination, together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options granted to Executive by Employer’s parent holding company, AmericanWest Bancorporation (“AWBC”), consistent with the terms of any such grant; provided, however, that paragraphs (b) and (c) of Section 11 of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Employer without Cause such that Executive’s rights and Employer’s obligations thereunder shall continue with respect to any subsequent termination of Executive’s employment with Employer as described therein.

4. Duties. Executive will report directly to the President and Chief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to her from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conduct herself so as to maintain and increase the goodwill and reputation of Employer and its business and abide by all codes of ethics or other professional duties applicable to Executive. In her capacity as Executive Vice President/Director of Retail Banking, Executive shall perform the customary duties of Executive Vice President/Director of Retail Banking of a Washington commercial bank, including but not limited to:

(a) Responsible for and manage retail banking and related activities in Employer’s branches, including sales, service, expense and credit controls, community involvement, human resource management and financial/policy/compliance standards;

(b) Establish plans, goals, key performance measures and strategies for the branch retail delivery system;

(c) Establish service policies and standards for customer service in order to ensure customer satisfaction and retention;

(d) Represent Employer in key community activities, including business, charitable, civic and social organizations, to maintain a proper responsible citizen stature for Employer.

(e) Maintain a good relationship with Employer’s Board, management and shareholders;

(f) Coordinate with other executive officers in the development of strategic plans and objectives for Employer;

and such other duties as are set forth in Executive’s job description or as may be assigned from time to time by Employer’s Board or Chief Executive Officer.

5. Extent of Service. Executive shall devote her entire business time, attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of Section 13) or from serving on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with her responsibilities to Employer.

6. Compensation.

(a) Salary. Employer shall pay Executive a base salary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Employer but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performance for the most recent performance period and other relevant factors.

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(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that of Executive.

(c) Performance Stock Awards and Stock Options.

(i) Discretionary Performance Shares. Executive may from time to time be granted shares of AWBC common stock (the “Discretionary Performance Shares”) as a Performance Stock award as AWBC, at AWBC’s sole discretion, may see fit. Any such Discretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Discretionary Performance Shares.

(ii) Stock Options. Executive may from time to time be granted stock options to purchase shares of AWBC common stock (the “Stock Options”) at the closing price of AWBC’s common stock on the date of grant as AWBC, at AWBC’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock option agreement, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Stock Options. All such Stock Options shall be “incentive stock options” within the meaning of the Code.

(d) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by her in the performance of her duties during the Term, subject to the timely presentment of appropriate vouchers and receipts in accordance with Employer’s policies.

(e) Deferred Compensation. Executive may, at her option, defer income from all or part of her base salary and bonuses through a Deferred Compensation Plan that is acceptable to Employer, which acceptance shall not be unreasonably withheld.

7. Employee Benefits. Executive shall be entitled to participate in employee benefit plans or programs (including but not limited to retirement plans) of Employer, if any, to the extent that her position, tenure, salary, age, health and other qualifications make her eligible to participate, subject to the rules and regulations applicable thereto. Employer shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

8. Vacation. Executive shall be entitled to vacation of four (4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize her responsibilities; provided, that at least once each year Executive must be absent from her duties with Employer for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and Chief Executive Officer.

9. Surety Bond. Executive agrees to furnish all information and take any other steps necessary to enable Employer to obtain and maintain a fidelity bond conditioned on the

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rendering of a true account by Executive of all moneys, goods or other property which may come into the custody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the bond shall be paid by Employer. If Executive cannot personally qualify for a surety bond at any time during the Term, Employer may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause.

10. Termination. Notwithstanding the provisions of Section 3, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under Section 11 are duly made) under the following circumstances:

(a) Death. This Agreement shall terminate upon Executive’s death.

(b) Disability. If Executive becomes Disabled, Employer may terminate Executive’s employment hereunder by providing her written notice thereof, and such termination will be effective upon delivery of such notice.

(c) Resignation without Good Reason. Executive may terminate her employment with Employer at any time without Good Reason (as defined in Section 16) by giving Employer two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(d) Resignation for Good Reason. Executive may terminate her employment with Employer for Good Reason (as defined in Section 16) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of her intent to terminate her employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer, such notice shall describe in reasonable detail the alleged breach. If Employer cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Employer’s receipt of such notice, Executive shall either rescind her notice of intent to terminate and continue her employment under this Agreement, or terminate her employment under Section 10(c), in which case her notice of breach under this Section 10(d) shall be deemed to satisfy the notice requirement under Section 10(c). If Employer fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day period following Employer’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate her employment as provided in Section 10(c), her employment shall terminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer.

(e) Involuntary Termination Without Cause. Employer may terminate Executive’s employment at any time without Cause by giving thirty (30) days’ written notice thereof to Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Employer specifies in the notice.

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(f) Involuntary Termination for Cause. Employer may terminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice.

11. Benefits on Termination of Employment. If Executive’s employment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows:

(a) Death; Disability; Resignation without Good Reason; Termination for Cause.

If Executive’s employment is terminated as a result of death, Disability, resignation without Good Reason or termination for Cause pursuant to subparagraphs (a), (b), (c) or (f), respectively, of Section 10, Executive shall receive:

(1) her base salary through the date her employment terminates;

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll procedures; and

(3) reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed.

(b) Change of Control.

(1) If, within two (2) years following the effective date of a Change of Control (as defined in Section 16), Executive terminates her employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), Executive shall receive:

(i) An amount equal to Executive’s then-current annual base salary for the greater period of (A) two (2) years or (B) the number of months remaining in the Term, including any Renewal Term then in effect;

(ii) An amount equal to the total amount of bonus paid to Executive during the calendar year immediately preceding any such termination, less any bonus paid Executive during the calendar year in which such termination occurs;

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iv) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive.

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(2) The payment to which Executive is entitled pursuant to subparagraphs (i), (ii) and (iii) of Section 11(b)(1) shall be paid in a single installment within forty-five (45) days following the last day on which she performs services as an employee of Employer (with no percent value or other discount) or, at Executive’s option, on a deferred basis (with no premium).

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(b) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this Section 11(b), together with any other payments or benefits received from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then the payment due under Section 11(b)(1)(i) shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount.

(c) Resignation for Good Reason; Termination without Cause.

(1) If Executive terminates her employment for Good Reason pursuant to Section 10(d) or Employer terminates Executive without Cause pursuant to Section 10(e), and such termination is not within two (2) years following a Change of Control, Executive shall receive:

(i) Continued payment, in accordance with Employer’s standard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any Renewal Term then in effect, but not less than for a period of one (1) year;

(ii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices;

(iii) Reimbursement of expenses described in Section 6(d) incurred but not yet reimbursed; and

(iv) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options which have been granted to Executive prior to the date of termination.

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(c) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(d) Benefits. For the three (3) calendar months immediately following the effective date of Executive’s resignation for Good Reason pursuant to Section 10(d) or

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Employer’s termination of Executive without Cause pursuant to Section 10(e), Executive (and, where applicable, her dependents) shall be entitled to continue participation in the group insurance plans maintained by Employer, including life, disability and health insurance programs, as if she were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to her annual salary in effect immediately prior to such termination. To the extent that Employer finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Employer shall provide Executive with individual policies which offer at least the same level of coverage and which impose not more than the same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connection with new employment, Employer’s obligation to provide coverage under this Section 11(d) shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Employer is required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) shall commence upon Executive’s election to participate therein at such time as coverage under this Section 11(d) terminates, and continue for such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at her own cost and expense and that failure by her to submit timely payment of premiums therefor will result in cancellation of COBRA coverage. Executive’s rights under other employee benefit plans in which she may have participated will be determined in accordance with the written plan documents governing those plans.

(e) No Other Payments or Benefits. Except as otherwise expressly provided in this Section 11 or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which she performs services as an employee of Employer.

12. Proprietary Information.

(a) Executive agrees to comply fully with Employer’s policies relating to non-disclosure of Employer’s trade secrets and proprietary information and processes, including information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing, Executive will not, whether during or after her employment with Employer, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executive make use of any such property for her own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after her employment; provided, that after her employment ceases, this provision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain without Employer’s consent).

(b) Trade secrets, proprietary information, and processes shall not be deemed to include information which is:

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive;

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(2) received from a third party without restriction and without breach of this Agreement;

(3) approved for release by written authorization of Employer; or

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this Section 12(b)(4), Executive shall give Employer prior written notice before such disclosure is made.

(c) Executive agrees that in the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Employer all property belonging to Employer, including all keys, pass cards, identification cards and all documents, equipment and materials of any nature pertaining to Executive’s employment with Employer. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or place of residence, or in any other location under Executive’s control.

(d) This Section shall survive the expiration or any earlier termination of this Agreement.

13. Noncompetition.

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) one year following termination of her employment for any reason or (ii) the balance of the Term remaining (not including any Renewal Term), if any (such longer period of time being the “Restricted Period”), Executive will not become involved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,” employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business.

(b) No Solicitation. While Executive is employed pursuant to this Agreement and during the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of Employer or AWBC to leave their employment or (2) any customers of Employer to remove their business from AmericanWest Bank (or any successor thereto), or to participate in any manner in a Competing Business.

(c) Employment Outside Washington and Idaho. Nothing in this Section 13 shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long as Executive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states of Washington or Idaho.

(d) Competing Business. “Competing Business” means any financial institution or trust company (including without limitation, any start-up or other financial

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institution or trust company in formation) that competes with, or will compete in the states of Washington or Idaho, with AWBC or AmericanWest Bank (or any successor thereto).

14. Enforcement.

(a) Scope of Covenants. Employer and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Employer, the agreements referred to in Sections 12 and 13 (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Employer’s confidential information, goodwill and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to compete with Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable.

(b) Injunctive Relief. Executive acknowledges that Employer will suffer immediate and irreparable harm that will not be compensable by damages alone if Executive repudiates or breaches any of the provisions of Sections 12 or 13 or threatens or attempts to do so. For this reason, under these circumstances, Employer, in addition to and without limitation of any other rights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Employer will not be required to post a bond as a condition for the granting of this relief.

(c) Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 12 and 13 and that Employer is entitled to require her to comply with those Sections. Sections 12, 13 and this Section 14 will survive termination of this Agreement. Executive represents that if her employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that Employer’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.

15. Successors.

(a) Employer’s Successors. Employer shall require any successor to all or substantially all of Employer’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent as Employer would be required to perform if there were no succession. Employer’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breach of Employer’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in Section 11(b).

(b) Executive’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it

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being agreed by Executive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement.

16. Definition of Terms. The following terms used in this Agreement when capitalized have the following meanings:

(a) “Board of Directors” means Employer’s board of directors.

(b) “Cause” means any one or more of the following:

(1) Executive’s willful misfeasance or gross negligence in the performance of her duties;

(2) Executive’s conviction of a crime in connection with her duties;

(3) Executive’s conduct that is demonstrably and significantly harmful to Employer or AWBC, as reasonably determined by the Board of Directors on advice from legal counsel; or

(4) Executive cannot personally qualify for a surety bond as required by Section 9.

(c) “Change of Control” means a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of AWBC or AmericanWest Bank, within the meaning of Section 280G of the Code; provided, however, that an internal reorganization of AWBC and its subsidiaries shall not constitute a Change of Control.

(d) “Code” means the United States Internal Revenue Code of 1986, as amended.

(e) “Disability” and “Disabled” means that Executive has been unable to perform the essential functions of her job under this Agreement, with or without reasonable accommodation, for a period of three (3) consecutive months as the result of her incapacity due to physical or mental illness.

(f) “Good Reason” means any of:

(1) a material reduction in Executive’s compensation under Section 6 or benefits under Sections 7 or 8,

(2) a material reduction in Executive’s title or responsibilities,

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from her residence in Spokane, Washington is increased by more than forty (40) miles,

(4) failure of Employer’s successor to assume and perform this Agreement as contemplated by Section 15(a), or

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(5) any material breach by Employer of this Agreement.

17. Miscellaneous.

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at her residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the President and Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure.

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failure is due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this Section 16(c), in every case the delay or failure to perform must be beyond the control and without the fault or negligence of the party claiming excusable delay.

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other than that certain Agreement for Grant of Performance Shares entered into as of June 6, 2005, whether written or oral, regarding Executive’s employment with Employer and all rights, privileges and benefits related thereto. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

(e) Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

(f) Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

(g) Authority to Contract. Employer warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Employer is a party or by which it may be bound. Employer further warrants and represents that the individual executing this Agreement on behalf of Employer has the full power and authority to bind

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Employer to the terms hereof and has been authorized to do so in accordance with Employer’s corporate organization.

(h) Dispute Resolution.

(1) Any controversy or claim between Employer and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association (“AAA”) or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code. Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this Section 16(h). The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction.

(2) If any arbitration, legal action or other proceeding is brought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from her independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact on her rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 6^th day of June, 2005, effective as of the day herein first above written.

EXECUTIVE		AMERICANWEST BANK
By	/s/ Nicole Sherman	By	/s/ Robert M. Daugherty
	Nicole Sherman		Robert M. Daugherty
			President and Chief Executive Officer

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EX-10.21

Exhibit 10.21

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into and effective (subject to regulatory approval) as of May 23, 2005 (the “Effective Date”) by and between AmericanWest Bank, a Washington state-chartered bank (the “Bank”), and Greg Hansen (“Executive”).

RECITALS

WHEREAS, Bank desires to employ Executive, and Executive desires to accept employment, as the Executive Vice President/Director of Commercial Lending of Bank; and

WHEREAS, Bank and Executive each desire to formalize the employment relationship by entering into this Employment Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

The parties agree as follows:

1. Definitions; Construction. Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in Section 16. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement.

2. Employment; Title. Bank hereby employs Executive, and Executive hereby accepts employment with Bank, upon the terms and conditions set forth in this Agreement. Executive’s title shall be “Executive Vice President/Director of Commercial Lending” of the Bank.

3. Term of Employment. The term of this Agreement (“Term”) is two years, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automatically renewed for successive two-year terms unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or the parties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Bank, (i) Executive shall be deemed an at-will employee of Bank, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of his employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination, together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options issued to Executive, consistent with the terms of any such issuance; provided, however, that paragraphs (b) and (c) of Section 11 of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Bank without Cause such that Executive’s rights and

Bank’s obligations thereunder shall continue with respect to any subsequent termination of Executive’s employment with Bank as described therein.

4. Duties. Executive will report directly to the President and Chief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to him from time to time by the Chief Executive Officer in connection with the conduct of Bank’s business. Executive will conduct himself so as to maintain and increase the goodwill and reputation of Bank and its business and abide by all codes of ethics or other professional duties applicable to Executive. In his capacity as Executive Vice President/Director of Commercial Lending, Executive shall perform the customary duties of Executive Vice President/Director of Commercial Lending of a Washington commercial bank, including but not limited to:

(a) Direct, manage and supervise the commercial lending operations of the Bank;

(b) Approve/reject loans within Executive’s lending authority and recommend on loans in excess of lending authority;

(c) Initiate, develop and monitor implementation of the Bank’s commercial lending policies and procedures;

(d) Maintain a good relationship with Bank’s Board, management and shareholders;

(e) Coordinate with other executive officers in the development of strategic plans and objectives for the Bank;

and such other duties as are set forth in Executive’s job description or as may be assigned from time to time by Bank’s Board or Chief Executive Officer.

5. Extent of Service. Executive shall devote his entire business time, attention and energies to the business of Bank. The foregoing, however, shall not preclude Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of Section 13) or from serving on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with his responsibilities to Bank.

6. Compensation.

(a) Salary. Bank shall pay Executive a base salary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Bank but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performance for the most recent performance period and other relevant factors.

(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Bank and that cover employees in positions comparable to that of Executive; provided, that for the year 2005 Executive will be

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paid a bonus in an amount not less than $35,000, such bonus to be paid to Executive on or before February 1, 2006.

(c) Signing Bonus. On June 1, 2005, Bank will pay Executive a Signing Bonus in the amount of $25,000 in consideration of executing this Agreement.

(d) Performance Stock Awards and Stock Options.

(i) Discretionary Performance Shares. Bank may from time to time grant Executive, as a Performance Stock award, shares of common stock (the “Discretionary Performance Shares”) of Bank’s parent holding company, AmericanWest Bancorporation, as Bank, at Bank’s sole discretion, may see fit. Any such Discretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Discretionary Performance Shares.

(ii) Bank may from time to time grant Executive stock options to purchase shares of common stock (the “Stock Options”) of Bank’s parent holding company, AmericanWest Bancorporation, at the closing price of such common stock on the date of grant as Bank, at Bank’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock option agreement, except that the provisions for immediate vesting thereof set forth in subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this Agreement shall apply to any such Stock Options. All such Stock Options shall be “incentive stock options” within the meaning of the Code.

(e) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by him in the performance of his duties during the Term, subject to the timely presentment of appropriate vouchers and receipts in accordance with Bank’s policies. Bank shall reimburse Executive for his monthly membership dues at the Spokane Country Club as part of his expense reimbursement.

(f) Deferred Compensation. Executive may, at his option, defer income from all or part of his base salary and bonuses through a Deferred Compensation Plan that is acceptable to Bank, which acceptance shall not be unreasonably withheld.

7. Employee Benefits. Executive shall be entitled to participate in employee benefit plans or programs (including but not limited to retirement plans) of Bank, if any, to the extent that his position, tenure, salary, age, health and other qualifications make him eligible to participate, subject to the rules and regulations applicable thereto. In addition, Bank shall pay Executive a car allowance of $600 per month, payable semi-monthly, as a fixed allowance for use of his personal automobile. Bank shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

8. Vacation. Executive shall be entitled to vacation of four (4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize his responsibilities; provided, that at least once each year Executive must be

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absent from his duties with Bank for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and Chief Executive Officer.

9. Surety Bond. Executive agrees to furnish all information and take any other steps necessary to enable Bank to obtain and maintain a fidelity bond conditioned on the rendering of a true account by Executive of all moneys, goods or other property which may come into the custody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Bank. All premiums on the bond shall be paid by Bank. If Executive cannot personally qualify for a surety bond at any time during the Term, Bank may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause.

10. Termination. Notwithstanding the provisions of Section 3, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under Section 11 are duly made) under the following circumstances:

(a) Death. This Agreement shall terminate upon Executive’s death.

(b) Disability. If Executive becomes Disabled, Bank may terminate Executive’s employment hereunder by providing him written notice thereof, and such termination will be effective upon delivery of such notice.

(c) Resignation without Good Reason. Executive may terminate his employment with Bank at any time without Good Reason (as defined in Section 16) by giving Bank two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Bank.

(d) Resignation for Good Reason. Executive may terminate his employment with Bank for Good Reason (as defined in Section 16) by giving Bank thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of his intent to terminate his employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Bank, such notice shall describe in reasonable detail the alleged breach. If Bank cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Bank’s receipt of such notice, Executive shall either rescind his notice of intent to terminate and continue his employment under this Agreement, or terminate his employment under Section 10(c), in which case his notice of breach under this Section 10(d) shall be deemed to satisfy the notice requirement under Section 10(c). If Bank fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day period following Bank’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate his employment as provided in Section 10(c), his employment shall terminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Bank.

(e) Involuntary Termination Without Cause. Bank may terminate Executive’s employment at any time without Cause by giving thirty (30) days’ written notice thereof to

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Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Bank specifies in the notice.

(f) Involuntary Termination for Cause. Bank may terminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice.

11. Benefits on Termination of Employment. If Executive’s employment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows:

(a) Death; Disability; Resignation without Good Reason; Termination for Cause.

If Executive’s employment is terminated as a result of death, Disability, resignation without Good Reason or termination for Cause pursuant to subparagraphs (a), (b), (c) or (f), respectively, of Section 10, Executive shall receive:

(1) his base salary through the date his employment terminates;

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Bank’s standard payroll procedures; and

(3) reimbursement of expenses described in Section 6(e) incurred but not yet reimbursed.

(b) Change of Control.

(1) If, within two (2) years following the effective date of a Change of Control (as defined in Section 16), Executive terminates his employment for Good Reason pursuant to Section 10(d) or Bank terminates Executive without Cause pursuant to Section 10(e), Executive shall receive:

(i) An amount equal to Executive’s then-current annual base salary for the greater period of (A) two (2) years or (B) the number of months remaining in the Term, including any renewal Term;

(ii) An amount equal to Executive’s bonus for the twelve (12) months immediately preceding any such termination;

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Bank’s standard payroll practices;

(iv) Reimbursement of expenses described in Section 6(e) incurred but not yet reimbursed; and

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(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive.

(2) The payment to which Executive is entitled pursuant to subparagraphs (i), (ii) and (iii) of Section 11(b)(1) shall be paid in a single installment within forty-five (45) days following the last day on which he performs services as an employee of Bank (with no percent value or other discount) or, at Executive’s option, on a deferred basis (with no premium).

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(b) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this Section 11(b), together with any other payments or benefits received from Bank, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then the payment due under Section 11(b)(1)(i) shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount.

(c) Resignation for Good Reason; Termination without Cause.

(1) If Executive terminates his employment for Good Reason pursuant to Section 10(d) or Bank terminates Executive without Cause pursuant to Section 10(e), and such termination is not within two (2) years following a Change of Control, Executive shall receive:

(i) Continued payment, in accordance with Bank’s standard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any renewal Term, but not less than for a period of one (1) year;

(ii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Bank’s standard payroll practices;

(iii) Reimbursement of expenses described in Section 6(e) incurred but not yet reimbursed; and

(iv) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options which have been granted to Executive prior to the date of termination.

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 11(c) (whether by seeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source.

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(d) Benefits. For the three (3) calendar months following the effective date of Executive’s resignation for Good Reason pursuant to Section 10(d) or Bank’s termination of Executive without Cause pursuant to Section 10(e), Executive (and, where applicable, his dependents) shall be entitled to continue participation in the group insurance plans maintained by Bank, including life, disability and health insurance programs, as if he were still an employee of Bank. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to his annual salary in effect immediately prior to such termination. To the extent that Bank finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Bank shall provide Executive with individual policies which offer at least the same level of coverage and which impose not more than the same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connection with new employment, Bank’s obligation to provide coverage under this Section 11(d) shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Bank is required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) shall commence upon Executive’s election to participate therein at such time as coverage under this Section 11(d) terminates, and continue for such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at his own cost and expense and that failure by him to submit timely payment of premiums therefor will result in cancellation of COBRA coverage. Executive’s rights under other employee benefit plans in which he may have participated will be determined in accordance with the written plan documents governing those plans.

(e) No Other Payments or Benefits. Except as otherwise expressly provided in this Section 11 or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which he performs services as an employee of Bank.

12. Proprietary Information.

(a) Executive agrees to comply fully with Bank’s policies relating to non-disclosure of Bank’s trade secrets and proprietary information and processes, including information regarding Bank’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing, Executive will not, whether during or after his employment with Bank, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executive make use of any such property for his own purposes or for the benefit of any person, firm, corporation or other entity (except Bank) under any circumstances during or after his employment; provided, that after his employment ceases, this provision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain without Bank’s consent).

(b) Trade secrets, proprietary information, and processes shall not be deemed to include information which is:

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive;

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(2) received from a third party without restriction and without breach of this Agreement;

(3) approved for release by written authorization of Bank; or

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this Section 12(b)(4), Executive shall give Bank prior written notice before such disclosure is made.

(c) Executive agrees that in the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Bank all property belonging to Bank, including all keys, pass cards, identification cards and all documents, equipment and materials of any nature pertaining to Executive’s employment with Bank. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or place of residence, or in any other location under Executive’s control.

(d) This Section shall survive the expiration or any earlier termination of this Agreement.

13. Noncompetition.

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) one year following termination of his employment for any reason or (ii) the balance of the Term remaining, if any (such longer period of time being the “Restricted Period”), Executive will not become involved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,” employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business.

(b) No Solicitation. While Executive is employed pursuant to this Agreement and during the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of Bank or its parent holding company, AmericanWest Bancorporation, to leave their employment or (2) any customers of the Bank to remove their business from the Bank, or to participate in any manner in a Competing Business.

(c) Employment Outside Washington and Idaho. Nothing in this Section 13 shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long as Executive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states of Washington or Idaho.

(d) Competing Business. “Competing Business” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company in formation) that competes with, or will compete in the states of Washington or Idaho, with either Bank or AmericanWest Bancorporation.

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14. Enforcement.

(a) Scope of Covenants. Bank and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Bank, the agreements referred to in Sections 12 and 13 (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Bank’s confidential information, goodwill and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive and Bank request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to compete with Bank to the maximum extent, in time, scope of activities and geography, the court finds enforceable.

(b) Injunctive Relief. Executive acknowledges that Bank will suffer immediate and irreparable harm that will not be compensable by damages alone if Executive repudiates or breaches any of the provisions of Sections 12 or 13 or threatens or attempts to do so. For this reason, under these circumstances, Bank, in addition to and without limitation of any other rights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Bank will not be required to post a bond as a condition for the granting of this relief.

(c) Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 12 and 13 and that Bank is entitled to require him to comply with those Sections. Sections 12, 13 and this Section 14 will survive termination of this Agreement. Executive represents that if his employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that Bank’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.

15. Successors.

(a) Bank’s Successors. Bank shall require any successor to all or substantially all of Bank’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent as Bank would be required to perform if there were no succession. Bank’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breach of Bank’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in Section 11(b).

(b) Executive’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it being agreed by Executive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement.

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16. Definition of Terms. The following terms used in this Agreement when capitalized have the following meanings:

(a) “Board of Directors” means Bank’s board of directors.

(b) “Cause” means any one or more of the following:

(1) Executive’s willful misfeasance or gross negligence in the performance of his duties;

(2) Executive’s conviction of a crime in connection with his duties;

(3) Executive’s conduct that is demonstrably and significantly harmful to Bank or Bank’s parent holding company, AmericanWest Bancorporation, as reasonably determined by the Board of Directors on advice from legal counsel; or

(4) Executive cannot personally qualify for a surety bond as required by Section 9.

(c) “Change of Control” means a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of Bank or Bank’s parent holding company, AmericanWest Bancorporation, within the meaning of Section 280G of the Code; provided, however, that an internal reorganization of AmericanWest Bancorporation and its subsidiaries shall not constitute a Change of Control.

(d) “Code” means the United States Internal Revenue Code of 1986, as amended.

(e) “Disability” and “Disabled” means that Executive has been unable to perform the essential functions of his job under this Agreement, with or without reasonable accommodation, for a period of three (3) consecutive months as the result of his incapacity due to physical or mental illness.

(f) “Good Reason” means any of:

(1) a material reduction in Executive’s compensation under Section 6 or benefits under Sections 7 or 8,

(2) a material reduction in Executive’s title or responsibilities,

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from his residence in Spokane, Washington is increased by more than forty (40) miles,

(4) failure of Bank’s successor to assume and perform this Agreement as contemplated by Section 15(a), or

(5) any material breach by Bank of this Agreement.

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17. Miscellaneous.

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at his residence address as maintained on Bank’s records, or to Bank at its executive offices (care of the President and Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure.

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failure is due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this Section 16(c), in every case the delay or failure to perform must be beyond the control and without the fault or negligence of the party claiming excusable delay.

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other than that certain Agreement for Grant of Performance Shares of even date herewith, whether written or oral, regarding Executive’s employment with Bank and all rights, privileges and benefits related thereto. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

(e) Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent breach by such other party.

(f) Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

(g) Authority to Contract. Bank warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Bank is a party or by which it may be bound. Bank further warrants and represents that the individual executing this Agreement on behalf of Bank has the full power and authority to bind Bank to the terms hereof and has been authorized to do so in accordance with Bank’s corporate organization.

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(h) Dispute Resolution.

(1) Any controversy or claim between Bank and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Bank, be submitted to arbitration, using either the American Arbitration Association (“AAA”) or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code. Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this Section 16(h). The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction.

(2) If any arbitration, legal action or other proceeding is brought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from his independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact on his rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day herein first above written.

EXECUTIVE		AMERICANWEST BANK
By	/s/ Greg Hansen	By	/s/ Robert M. Daugherty
	Greg Hansen		Robert M. Daugherty
			President and Chief Executive Officer

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EX-10.22

Exhibit 10.22

GRANT OF PERFORMANCE SHARES

RECITALS

A. Diane Kelleher is Executive Vice President/Chief Financial Officer of AmericanWest Bancorporation (“AWBC”) and its wholly-owned subsidiary, AmericanWest Bank (the “Bank”).

B. AWBC wishes to incent Ms. Kelleher to remain with the Bank and/or AWBC for the near future and reward her for good performance by granting her, in addition to her regular salary and such other compensation as may be granted her from time to time, performance shares in AWBC pursuant to the terms and conditions set forth herein.

GRANT AGREEMENT

1. Effective June 6, 2005, AWBC grants Diane Kelleher Seven Thousand Five Hundred (7,500) shares of AWBC common stock (the “Performance Shares”) as a Performance Stock award under AWBC’s 2001 Incentive Stock Plan. Ownership in such Performance Shares shall vest on June 6, 2010 (the “Vesting Date”) only in accordance with the following conditions:

(a) Ms. Kelleher is continuously employed by the Bank and/or AWBC through June 5, 2010.

(b) For each full calendar year between January 1, 2005 and January 1, 2010 for which AWBC has a Return on Average Assets of less than one percent (1.0%), twenty percent (20%) of the Performance Shares that otherwise would have vested on the Vesting Date shall lapse and all of Ms. Kelleher’s rights thereto shall thereupon cease.

(c) Except as otherwise provided in Section 2, no rights in any of such Performance Shares, earned or unearned, shall vest in Ms. Kelleher or in anyone claiming by or under her until June 6, 2010, at which time all right, title and interest in and to all Performance Shares earned pursuant to the conditions set forth in this Grant shall vest in Ms. Kelleher.

(d) Notwithstanding any other provision of this Section 1, and except as otherwise provided in Section 2, all of Ms. Kelleher’s rights to vesting in the Performance Shares shall cease upon the termination of her service for any reason as an employee from both the Bank and AWBC prior to the Vesting Date.

2. If Ms. Kelleher terminates her employment for Good Reason or is terminated without Cause (as “Good Reason” and “Cause” are defined in that certain Employment Agreement between Ms. Kelleher, AWBC and the Bank dated as of June 6, 2005, there will be an immediate acceleration of vesting of all Performance Shares granted hereunder.

Agreed to as of June 6, 2005:

/s/ Robert M. Daugherty	/s/ Diane Kelleher
Robert M. Daugherty, President & CEO	Diane Kelleher
AmericanWest Bancorporation

EX-10.23

Exhibit 10.23

GRANT OF PERFORMANCE SHARES

RECITALS

A. R. Blair Reynolds is currently Senior Vice President & General Counsel of AmericanWest Bancorporation (“AWBC”) and its wholly-owned subsidiary, AmericanWest Bank (the “Bank”).

B. Mr. Reynolds has performed well on behalf of AWBC and the Bank, and AWBC wishes to incent him to remain with AWBC and/or the Bank for the near future and reward him for his continued good performance by granting him, in addition to his regular salary and such other compensation as may be granted him from time to time, performance shares in AWBC pursuant to the terms and conditions set forth herein.

GRANT AGREEMENT

1. Effective June 6, 2005, AWBC grants R. Blair Reynolds Five Thousand (5,000) shares of AWBC common stock (the “Performance Shares”) as a Performance Stock award under AWBC’s 2001 Incentive Stock Plan. Ownership in such Performance Shares shall vest on January 25, 2010 (the “Vesting Date”) only in accordance with the following conditions:

(a) Mr. Reynolds is continuously employed by AWBC and/or the Bank through January 24, 2010.

(b) For each full calendar year between January 1, 2005 and January 1, 2010 for which AWBC has a Return on Average Assets of less than one percent (1.0%), twenty percent (20%) of the Performance Shares that otherwise would have vested on the Vesting Date shall lapse and all of Mr. Reynolds’s rights thereto shall thereupon cease.

(c) Except as otherwise provided in Section 2, no rights in any of such Performance Shares, earned or unearned, shall vest in Mr. Reynolds or in anyone claiming by or under him until January 25, 2010, at which time all right, title and interest in and to all Performance Shares earned pursuant to the conditions set forth in this Grant shall vest in Mr. Reynolds.

(d) Notwithstanding any other provision of this Section 1, and except as otherwise provided in Section 2, all of Mr. Reynolds’s rights to vesting in the Performance Shares shall cease upon the termination of his service for any reason as an employee from both AWBC and the Bank prior to the Vesting Date.

2. If Mr. Reynolds terminates his employment for Good Reason or is terminated without Cause (as “Good Reason” and “Cause” are defined in that certain Employment Agreement between Mr. Reynolds, AWBC and the Bank dated as of June 6, 2005, there will be an immediate acceleration of vesting of all Performance Shares granted hereunder.

3. This Grant supersedes and replaces any grant of Performance Shares which may have been made on or after January 1, 2005 to the date hereof, which prior grant, if any, is hereby null and void.

Agreed to as of June 6, 2005:

/s/ Robert M. Daugherty	/s/ R. Blair Reynolds
Robert M. Daugherty, President & CEO	R. Blair Reynolds
AmericanWest Bancorporation

EX-10.24

Exhibit 10.24

GRANT OF PERFORMANCE SHARES

RECITALS

A. Rick Shamberger is currently Executive Vice President/Chief Credit Officer of AmericanWest Bank (the “Bank”), a wholly-owned subsidiary of AmericanWest Bancorporation (“AWBC”).

B. Mr. Shamberger has performed well on behalf of AWBC and the Bank, and AWBC wishes to incent him to remain with the Bank and/or AWBC for the near future and reward him for his continued good performance by granting him, in addition to his regular salary and such other compensation as may be granted him from time to time, performance shares in AWBC pursuant to the terms and conditions set forth herein.

GRANT AGREEMENT

1. Effective June 6, 2005, AWBC grants Rick Shamberger Seven Thousand Five Hundred (7,500) shares of AWBC common stock (the “Performance Shares”) as a Performance Stock award under AWBC’s 2001 Incentive Stock Plan. Ownership in such Performance Shares shall vest on January 2, 2010 (the “Vesting Date”) only in accordance with the following conditions:

(a) Mr. Shamberger is continuously employed by the Bank and/or AWBC through December 31, 2009.

(b) For each full calendar year between January 1, 2005 and January 1, 2010 for which AWBC has a Return on Average Assets of less than one percent (1.0%), twenty percent (20%) of the Performance Shares that otherwise would have vested on the Vesting Date shall lapse and all of Mr. Shamberger’s rights thereto shall thereupon cease.

(c) Except as otherwise provided in Section 2, no rights in any of such Performance Shares, earned or unearned, shall vest in Mr. Shamberger or in anyone claiming by or under him until January 2, 2010, at which time all right, title and interest in and to all Performance Shares earned pursuant to the conditions set forth in this Grant shall vest in Mr. Shamberger.

(d) Notwithstanding any other provision of this Section 1, and except as otherwise provided in Section 2, all of Mr. Shamberger’s rights to vesting in the Performance Shares shall cease upon the termination of his service for any reason as an employee from both the Bank and AWBC prior to the Vesting Date.

2. If Mr. Shamberger terminates his employment for Good Reason or is terminated without Cause (as “Good Reason” and “Cause” are defined in that certain Employment Agreement between Mr. Shamberger, AWBC and the Bank dated as of June 6, 2005, there will be an immediate acceleration of vesting of all Performance Shares granted hereunder.

3. This Grant supersedes and replaces any grant of Performance Shares which may have been made on or after January 1, 2005 to the date hereof, which prior grant, if any, is hereby null and void.

Agreed to as of June 6, 2005:

/s/ Robert M. Daugherty	/s/ Rick Shamberger
Robert M. Daugherty, President & CEO	Rick Shamberger
AmericanWest Bancorporation

EX-10.25

Exhibit 10.25

GRANT OF PERFORMANCE SHARES

RECITALS

A. Nicole Sherman is currently Executive Vice President/Director of Retail Banking of AmericanWest Bank (the “Bank”), a wholly-owned subsidiary of AmericanWest Bancorporation (“AWBC”).

B. Ms. Sherman has performed well on behalf of AWBC and the Bank, and AWBC wishes to incent her to remain with the Bank and/or AWBC for the near future and reward her for her continued good performance by granting her, in addition to her regular salary and such other compensation as may be granted her from time to time, performance shares in AWBC pursuant to the terms and conditions set forth herein.

GRANT AGREEMENT

1. Effective June 6, 2005, AWBC grants Nicole Sherman Seven Thousand Five Hundred (7,500) shares of AWBC common stock (the “Performance Shares”) as a Performance Stock award under AWBC’s 2001 Incentive Stock Plan. Ownership in such Performance Shares shall vest on January 4, 2010 (the “Vesting Date”) only in accordance with the following conditions:

(a) Ms. Sherman is continuously employed by the Bank and/or AWBC through January 3, 2010.

(b) For each full calendar year between January 1, 2005 and January 1, 2010 for which AWBC has a Return on Average Assets of less than one percent (1.0%), twenty percent (20%) of the Performance Shares that otherwise would have vested on the Vesting Date shall lapse and all of Ms. Sherman’s rights thereto shall thereupon cease.

(c) Except as otherwise provided in Section 2, no rights in any of such Performance Shares, earned or unearned, shall vest in Ms. Sherman or in anyone claiming by or under her until January 4, 2010, at which time all right, title and interest in and to all Performance Shares earned pursuant to the conditions set forth in this Grant shall vest in Ms. Sherman.

(d) Notwithstanding any other provision of this Section 1, and except as otherwise provided in Section 2, all of Ms. Sherman’s rights to vesting in the Performance Shares shall cease upon the termination of her service for any reason as an employee from both the Bank and AWBC prior to the Vesting Date.

2. If Ms. Sherman terminates her employment for Good Reason or is terminated without Cause (as “Good Reason” and “Cause” are defined in that certain Employment Agreement between Ms. Sherman, AWBC and the Bank dated as of June 6, 2005, there will be an immediate acceleration of vesting of all Performance Shares granted hereunder.

3. This Grant supersedes and replaces any grant of Performance Shares which may have been made on or after January 1, 2005 to the date hereof, which prior grant, if any, is hereby null and void.

Agreed to as of June 6, 2005:

/s/ Robert M. Daugherty	/s/ Nicole Sherman
Robert M. Daugherty, President & CEO	Nicole Sherman
AmericanWest Bancorporation

EX-10.26

Exhibit 10.26

AGREEMENT FOR

GRANT OF PERFORMANCE SHARES

RECITALS

A. Greg Hansen and AmericanWest Bank (the “Bank”), a wholly-owned subsidiary of AmericanWest Bancorporation (“AWBC”) are, contemporaneously with this Grant of Performance Shares, entering into an Employment Agreement pursuant to which Mr. Hansen will be employed by Bank as Executive Vice President/Director of Commercial Lending.

B. Bank and AWBC wish to incent Mr. Hansen to remain with the Bank for the near future by granting him, in addition to his regular salary and such other compensation as may be granted him from time to time in the course of his employment, performance shares in AWBC pursuant to the terms and conditions set forth herein.

GRANT AGREEMENT

1. Effective May 23, 2005, AWBC grants Greg Hansen Seven Thousand Five Hundred (7,500) shares of AWBC common stock (the “Performance Shares”) as a Performance Stock award under AWBC’s 2001 Incentive Stock Plan. Ownership in such Performance Shares shall vest on May 22, 2010 (the “Vesting Date”) only in accordance with the following conditions:

(a) Mr. Hansen is continuously employed by the Bank through May 22, 2010.

(b) For each full calendar year between January 1, 2005 and the Vesting Date for which AWBC has a Return on Average Assets of less than one percent (1.0%), twenty percent (20%) of the Performance Shares that otherwise would have vested on the Vesting Date shall lapse and all of Mr. Hansen’s rights thereto shall thereupon cease.

(c) Except as otherwise provided in Section 2, all of Mr. Hansen’s rights to vesting in the Performance Shares shall cease upon the termination of his service as an employee of the Bank.

2. If Mr. Hansen terminates his employment for Good Reason or is terminated without Cause (as “Good Reason” and “Cause” are defined in that certain Employment Agreement between Mr. Hansen and the Bank dated as of May 23, 2005), there will be an immediate acceleration of vesting of all Performance Shares granted hereunder.

Agreed to this 23^th day of May, 2005:

/s/ Robert M. Daugherty	/s/ Greg Hansen
Robert M. Daugherty, President & CEO	Greg Hansen
AmericanWest Bancorporation

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Daugherty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmericanWest Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: August 8, 2005

By	/s/ Robert M. Daugherty
	Robert M. Daugherty
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

AMERICANWEST BANCORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Diane L. Kelleher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmericanWest Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: August 8, 2005

By	/s/ Diane L. Kelleher
	Diane L. Kelleher
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

AMERICANWEST BANCORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Daugherty, state and attest that:

(1) I am the Chief Executive Officer of AmericanWest Bancorporation (the “Registrant”).

(2) I hereby certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

• the Quarterly Report on Form 10-Q of the Registrant for the period ended June 30, 2005 (the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 o(d)); and

• the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Registrant for the periods presented.

Name:	/s/ Robert M. Daugherty
Title	President and Chief Executive Officer
Date:	August 8, 2005

EX-32.2

Exhibit 32.2

AMERICANWEST BANCORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Diane L. Kelleher, state and attest that:

(1) I am the Chief Financial Officer of AmericanWest Bancorporation (the “Registrant”).

(2) I hereby certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

• the Quarterly Report on Form 10-Q of the Registrant for the period ended June 30, 2005 (the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 o(d)); and

• the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Registrant for the periods presented.

Name:	/s/ Diane L. Kelleher
Title	Executive Vice President and Chief Financial Officer
Date:	August 8, 2005