EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

AWBC – 2006 Q4 Earnings

January 31, 2007

Page 1 of 12

AMERICANWEST BANCORPORATION

 

CONTACT:   Robert M. Daugherty   

President and CEO

  Diane L. Kelleher   

Chief Financial Officer

    

(509) 467-6993

NEWS RELEASE

AMERICANWEST BANCORPORATION ANNOUNCES

2006 FOURTH QUARTER AND YEAR END RESULTS AND QUARTERLY CASH DIVIDEND

Spokane, Washington –AmericanWest Bancorporation (Nasdaq: AWBC) today announced that net income for the quarter and year ended December 31, 2006 was $2.3 million or $0.20 per diluted share and $7.6 million or $0.67 per diluted share, respectively. This compares to $4.0 million or $0.37 per diluted share for the three months ended December 31, 2005 and $13.9 million or $1.31 per diluted share for the year ended December 31, 2005. The return on average assets and return on average equity was 0.58% and 5.33%, respectively, for the year ended December 31, 2006. These have decreased from 1.29% and 12.34%, respectively, for the year ended December 31, 2005.

“Significant progress and investments were made during 2006 in building a foundation for long term earnings growth,” remarked Robert M. Daugherty, President and Chief Executive Officer. “These included opening five new financial centers, primarily in northern Idaho and the Columbia Basin and expansion into new growth markets through the acquisition of Columbia Trust Bank and opening a loan production office in the Salt Lake City area. Our overall financial performance, however, fell below expectations due to the impact of some expansion initiatives, margin compression and provision cost associated with one loan.”

AWBC is also announcing that its Board of Directors has approved a quarterly cash dividend of $0.03 per share, payable on February 27, 2007 to shareholders of record at the close of business on February 13, 2007.

LOAN GROWTH AND CREDIT QUALITY:

Gross loans were $1.2 billion at December 31, 2006, an increase of $38 million or 3% from September 30, 2006. Gross loans increased $258 million or 27% as compared to December 31, 2005, including $146 million in loans acquired from Columbia Trust Bank (CTB) during the first quarter of 2006. Excluding the CTB transaction, loan growth was 12% for 2006.

Significant improvement in asset quality was achieved during 2006, with both nonperforming loan and asset ratios declining by 37% and 43%, respectively. Total nonperforming loans, net of government guarantees, were $11.5 million or 0.94% of total gross loans at December 31, 2006. This compares to $9.8 million or 0.83% of total gross loans at September 30, 2006 and $14.5 million or 1.50% of total gross loans at December 31, 2005. The increase during the fourth quarter is mainly due to one relationship of $3.5 million, net of a $2.8 million government guarantee, which was placed on nonaccrual. The collateral securing this loan is in the process of


AWBC – 2006 Q4 Earnings

January 31, 2007

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liquidation. The liquidation is expected to be completed by March 31, 2007, and no additional provision for credit losses is anticipated at this time. The fourth quarter increase in nonperforming loans was partially offset by other reductions in nonperforming loans principally resulting from loans being paid in full. Total nonperforming assets, net of government guarantees, were $12.1 million or 0.86% of total assets at December 31, 2006 as compared to $10.4 million or 0.76% of total assets at September 30, 2006 and $16.7 million or 1.51% of total assets at December 31, 2005.

The provision for credit losses for the quarter and year ended December 31, 2006 was $0.6 million and $5.8 million, respectively. There was no provision made during the fourth quarter of 2005 and the total for 2005 was $2.4 million. For the quarter ended December 31, 2006, net charge offs as a percentage of average gross loans improved to 0.03% as compared to 0.91% in the prior quarter. For the years ended December 31, 2006 and 2005, the net charge offs were 0.54% and 0.68% of average gross loans, respectively. The charge offs for the year ended December 31, 2006 includes the entire $4.8 million balance for one borrower which was 68% of the total charge offs for the year.

The allowance for credit losses was $16.0 million at December 31, 2006 as compared to $15.5 million at September 30, 2006 and $14.4 million at December 31, 2005. At December 31, 2006, the allowance for credit losses as a percentage of total loans was 1.31% as compared to 1.49% at December 31, 2005. During the quarter ended December 31, 2006, AWBC reclassified the portion of the allowance related to unfunded commitments of $0.9 million to other liabilities. The combination of the allowance for loan losses and the allowance for unfunded commitments are collectively referred to as the allowance for credit losses. The amounts presented for prior periods have been reclassified to conform to the new presentation format. The reclassification had no effect on retained earnings or net income as previously presented.

DEPOSIT AND BORROWING BALANCES:

Total deposits were $1.1 billion at December 31, 2006, an increase of $23 million or 2% for the quarter. During the fourth quarter of 2006, noninterest bearing deposits increased $11 million or 5%. Deposits increased $227 million or 25% as compared to December 31, 2005, including $176 million in deposits acquired from CTB during the first quarter. Excluding the CTB transaction, deposit growth was 6% for 2006.

AmericanWest opened two new financial centers during the fourth quarter of 2006 to further its expansion into growing markets and to increase its deposit base. These are located in Coeur d’Alene, Idaho and in the West Plains area near Spokane, Washington. Additionally, on January 2, 2007, a new financial center was opened in College Place, Washington near Walla Walla.

Total Federal Home Loan Bank (FHLB) advances increased $25 million or 31% to $106 million at December 31, 2006 as compared to September 30, 2006. The FHLB advances increased $35 million or 50% from December 31, 2005. Additionally, junior subordinated debt increased $10 million to $21 million at December 31, 2006 as compared to the prior year end. This increase was due to the issuance of $7 million in March 2006 and the assumption of $3 million from CTB.


AWBC – 2006 Q4 Earnings

January 31, 2007

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NET INTEREST MARGIN AND NET INTEREST INCOME:

The net interest margin was 5.02% for the quarter ended December 31, 2006 down one basis point from the prior quarter and down 28 basis points from the fourth quarter of 2005. For the quarter ended December 31, 2006, the cost of interest bearing liabilities increased 117 basis points to 3.89% and the earning assets yield increased by 68 basis points to 8.06% as compared to fourth quarter of 2005.

The net interest margin was 5.06% for the year ended December 31, 2006 down 41 basis points from 2005. During 2006, the net interest margin compressed as the cost of funds increased more than the earning assets yield. The cost of interest bearing liabilities increased 121 basis points to 3.59% during 2006. The primary drivers are higher market interest rates during the year and the heightened competition for deposits. The earning assets yield increased 53 basis points to 7.86% during 2006. The slower rise in the earning assets yield is attributable in part to deliberate changes made by management to improve the credit quality of the portfolio, such that loan yields may be lower but are expected to be offset by reduced future loan losses. Another factor is that fixed rate term loans have repriced at similar or lower rates due to the flat to inverted yield curve during the year. Finally, loan spreads have compressed due to heightened competition.

Net interest income for the quarter ended December 31, 2006 was comparable to the quarter ended September 30, 2006 at $15.8 million and $15.7 million, respectively. These compare to $13.8 million for the quarter ended December 31, 2005. Net interest income for the year ended December 31, 2006 was $60.3 million as compared to $54.0 million for the year ended December 31, 2005. The net interest income growth is the result of an increase in average earning assets, including the impact of the CTB acquisition, partially offset by the reduction in the net interest margin.

NONINTEREST INCOME AND EXPENSE:

Noninterest income was $2.6 million for the quarter ended December 31, 2006 as compared to $2.8 million for the prior quarter and $2.6 million for the fourth quarter of 2005. The slight decline from the prior quarter is mainly related to government guaranteed loan sales during the third quarter of 2006, which resulted in revenues of $0.5 million. The fourth quarter of 2005 included a gain on sale of the bankcard portfolio which resulted in noninterest income of $0.7 million.

Noninterest income for the year ended December 31, 2006 was $9.3 million as compared to $8.4 million for 2005. The fees and service charges income increased $0.6 million as compared to the prior year related mainly to the increase in deposit accounts over the prior year, including the impact of the CTB acquisition, and new products offered to customers. The fees on mortgage sales increased $0.4 million related to an increase in the origination volume.

Noninterest expense was $14.2 million for the quarter ended December 31, 2006 as compared to $13.2 million for the prior quarter and $11.2 million for the fourth quarter of 2005. Noninterest expense for the year ended December 31, 2006 was $51.8 million, an increase of $10.6 million from 2005. The increase is mainly due to salaries and employee benefits rising $6.8 million related to the higher number of employees including former CTB employees, new financial centers and a new loan production center in Utah. Occupancy, equipment and other expenses were also higher as a result of these growth initiatives.


AWBC – 2006 Q4 Earnings

January 31, 2007

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The efficiency ratio was 75.5% for the quarter ended December 31, 2006 as compared to 70.1% for the three months ended September 30, 2006, and 68.4% for the fourth quarter of 2005. The efficiency ratio was 73.0% for the year ended December 31, 2006 as compared to 65.6% for 2005. The increase in the efficiency ratio during 2006 is related to the margin compression and increased noninterest expense for expansion activities.

INCOME TAXES:

The effective tax rate for the year ended December 31, 2006 was 36.3% as compared to the prior year of 26.5%. The effective tax rate for the quarter ended December 31, 2006 was 37.4%. The increase in the effective tax rate for 2006 is primarily due to the recapture of certain tax credits recognized in prior years due to modification of the usage of a building and uncertainty of completion of certain construction projects. During the third quarter of 2005, AWBC recorded a $0.9 million reversal of a tax reserve which reduced the effective tax rate.

BUSINESS SUMMARY:

AmericanWest Bancorporation is a bank holding company whose principal subsidiary is AmericanWest Bank, a community bank with 46 financial centers located in Eastern Washington and Northern Idaho, as well as loan production offices in Ellensburg, Washington and South Jordan, Utah. For further information on the Company or to access Internet banking, please visit our web site at www.awbank.net.

AWBC and Utah-based Far West Bancorporation (FWB) announced the signing of a definitive agreement for Far West to merge with and into AWBC, followed by the merger of Far West’s principal operating subsidiary, Far West Bank with and into AWBC’s principal operating subsidiary, AmericanWest Bank, in a transaction valued at approximately $150 million. The transaction is expected to be completed during the first quarter of 2007, subject to approval by the shareholders of both companies and other customary conditions for closing. For additional information related to this transaction refer to the Form 8-K filed with the Securities and Exchange Commission on October 19, 2006 and Amendment No. 1 to the Form S-4 filed with the Securities and Exchange Commission on January 24, 2007.

FORWARD LOOKING STATEMENTS:

This document contains comments and information that constitute “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995). The forward-looking statements herein are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: whether the liquidation process related to the $3.5 million nonaccrual loan can be completed in the manner and time anticipated; whether recent changes in the loan portfolio will prevent future loan losses; the ability of the Company and Far West to obtain the required shareholder approvals for the proposed merger transaction; the ability of the Company and Far West to consummate the merger transaction; a material adverse change in the financial condition, results of operations or prospects of the Company or Far West; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical and technological factors affecting the companies’ operations, pricing and services; and other risk factors referred to from time to time in


AWBC – 2006 Q4 Earnings

January 31, 2007

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filings made by the Company with the Securities and Exchange Commission. When used in this document, the words “believes,” “estimates,” “expects,” “should,” “anticipates” and similar expressions as they relate to either company or the proposed transaction are intended to identify forward-looking statements. Forward-looking statements speak only as to the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Additional Information and Where to Find It:

Investors and security holders may obtain and are urged to carefully review and consider AWBC’s public filings with the SEC. The documents filed by AWBC with the SEC may be obtained free of charge at AWBC’s website at www.awbank.net or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from AWBC by requesting them in writing at AmericanWest Bancorporation, 41 W. Riverside Avenue, Suite 400, Spokane, Washington 99201, by emailing investorinfo@awbank.net, or by telephone at 509-232-1536.

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AWBC – 2006 Q4 Earnings

January 31, 2007

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

Consolidated Statements of Income:

   For the three months ended:    For the year ended:
   12/31/2006    9/30/2006    12/31/2005    12/31/2006    12/31/2005

INTEREST INCOME

              

Interest and fees on loans

   $ 24,904    $ 24,447    $ 18,715    $ 91,743    $ 70,898

Interest on securities

     491      494      285      1,901      1,176

Other interest income

     86      44      182      209      246
                                  

TOTAL INTEREST INCOME

     25,481      24,985      19,182      93,853      72,320
                                  

INTEREST EXPENSE

              

Interest on deposits

     7,975      7,281      4,626      26,843      15,223

Interest on borrowings

     1,667      1,993      798      6,724      3,110
                                  

TOTAL INTEREST EXPENSE

     9,642      9,274      5,424      33,567      18,333
                                  

NET INTEREST INCOME

     15,839      15,711      13,758      60,286      53,987

Provision for credit losses

     624      3,681      —        5,791      2,365
                                  

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

     15,215      12,030      13,758      54,495      51,622
                                  

NONINTEREST INCOME

              

Fees and service charges

     1,505      1,467      1,353      5,526      4,942

Fees on mortgage sales

     576      452      283      1,713      1,293

Other

     484      845      916      2,036      2,148
                                  

TOTAL NONINTEREST INCOME

     2,565      2,764      2,552      9,275      8,383
                                  

NONINTEREST EXPENSE

              

Salaries and employee benefits

     8,269      7,748      6,561      30,284      23,439

Occupancy expense, net

     1,161      1,064      897      4,167      3,534

Equipment expense

     1,115      988      741      3,943      3,034

State business and occupation tax

     289      383      267      1,238      960

Foreclosed real estate and other foreclosed assets expense

     191      52      125      750      669

Intangible assets amortization

     294      294      62      982      251

Other

     2,867      2,716      2,567      10,419      9,248
                                  

TOTAL NONINTEREST EXPENSE

     14,186      13,245      11,220      51,783      41,135
                                  

INCOME BEFORE PROVISION FOR INCOME TAX

     3,594      1,549      5,090      11,987      18,870

PROVISION FOR INCOME TAXES

     1,343      587      1,123      4,357      4,998
                                  

NET INCOME

   $ 2,251    $ 962    $ 3,967    $ 7,630    $ 13,872
                                  

Basic earnings per share

   $ 0.20    $ 0.08    $ 0.38    $ 0.68    $ 1.33

Diluted earnings per share

   $ 0.20    $ 0.08    $ 0.37    $ 0.67    $ 1.31

Basic weighted average shares outstanding

     11,383,248      11,373,559      10,451,783      11,182,526      10,407,180

Diluted weighted average shares outstanding

     11,531,166      11,530,546      10,614,101      11,354,654      10,593,903

Ending book value per share

   $ 13.35    $ 13.18    $ 11.58    $ 13.35    $ 11.58

Ending tangible book value per share

   $ 9.79    $ 9.59    $ 10.20    $ 9.79    $ 10.20

Ending shares outstanding

     11,388,315      11,376,497      10,490,907      11,388,315      10,490,907

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AWBC – 2006 Q4 Earnings

January 31, 2007

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

Consolidated Statement of Condition:

   December 31,
2006
   September 30,
2006
   December 31,
2005
 
ASSETS         

Cash and due from banks

   $ 45,866    $ 38,888    $ 40,825  

Overnight interest bearing deposits with other banks

     9,863      175      11,119  
                      

Cash and cash equivalents

     55,729      39,063      51,944  

Securities, available-for-sale at fair value

     39,518      42,758      31,364  

Loans, net of allowance for loan losses

     1,204,519      1,167,558      948,359  

Loans, held for sale

     2,913      7,672      3,395  

Accrued interest receivable

     8,311      8,958      6,969  

FHLB stock

     6,319      6,319      5,397  

Premises and equipment, net

     30,484      27,320      21,762  

Foreclosed real estate and other foreclosed assets

     644      573      2,221  

Bank owned life insurance

     19,716      19,537      16,987  

Goodwill

     33,073      33,068      12,050  

Intangible assets

     7,506      7,800      2,391  

Other assets

     7,796      7,631      6,761  
                      

TOTAL ASSETS

   $ 1,416,528    $ 1,368,257    $ 1,109,600  
                      
LIABILITIES         

Noninterest bearing demand deposits

   $ 236,375    $ 225,558    $ 191,192  

Interest bearing deposits:

        

NOW, savings accounts and MMDA

     476,852      472,974      391,876  

Time, $100,000 and over

     217,508      214,736      149,101  

Other time

     193,204      187,425      165,261  
                      

TOTAL DEPOSITS

     1,123,939      1,100,693      897,430  

FHLB advances

     105,759      80,575      70,638  

Other borrowings

     307      5,190      899  

Junior subordinated debt

     20,620      20,620      10,310  

Accrued interest payable

     4,270      3,617      1,754  

Other liabilities

     9,596      7,642      7,092  
                      

TOTAL LIABILITIES

     1,264,491      1,218,337      988,123  
STOCKHOLDERS’ EQUITY         

Common stock, no par

     127,396      127,242      104,667  

Retained earnings

     24,576      22,666      17,967  

Unearned compensation

     —        —        (1,095 )

Accumulated other comprehensive income (loss), net of tax

     65      12      (62 )
                      

TOTAL STOCKHOLDERS’ EQUITY

     152,037      149,920      121,477  
                      

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 1,416,528    $ 1,368,257    $ 1,109,600  
                      

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     Three Months Ended     Year Ended  

Financial Ratios, annualized:

   12/31/2006     9/30/2006     12/31/2005     12/31/2006     12/31/2005  

Return on average assets

   0.65 %   0.28 %   1.41 %   0.58 %   1.29 %

Return on average equity

   5.92 %   2.55 %   13.35 %   5.33 %   12.34 %

Efficiency ratio

   75.48 %   70.10 %   68.41 %   73.03 %   65.55 %

Noninterest income to average assets

   0.74 %   0.80 %   0.91 %   0.71 %   0.78 %

Noninterest expenses to average assets

   4.09 %   3.85 %   4.00 %   3.96 %   3.84 %

Net interest margin to average earning assets (1)

   5.02 %   5.03 %   5.30 %   5.06 %   5.47 %

Ending shareholders’ equity to assets

   10.73 %   10.96 %   10.95 %   10.73 %   10.95 %

Ending tangible shareholders’ equity to tangible assets

   8.10 %   8.22 %   9.77 %   8.10 %   9.77 %

(1) Presented on a tax equivalent basis for tax exempt securities.

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

Loan Portfolio:

   12/31/2006     9/30/2006     12/31/2005  

Commercial real estate

   $ 651,386     $ 605,097     $ 501,328  

Commercial and industrial

     283,889       281,956       226,964  

Agricultural

     141,646       155,875       119,355  

Residential mortgage

     74,222       74,910       58,803  

Residential construction

     47,235       40,523       33,906  

Installment and other

     22,508       24,846       22,527  
                        

Total loans

     1,220,886       1,183,207       962,883  

Allowance for loan losses

     (15,136 )     (14,761 )     (13,895 )

Deferred loan fees, net of deferred costs

     (1,231 )     (888 )     (629 )
                        

Net loans

   $ 1,204,519     $ 1,167,558     $ 948,359  
                        

Nonperforming Assets:

      

Accruing loans over 90 days past due

   $ 0     $ 549     $ 31  

Nonaccrual loans (1)

     11,500       9,255       14,452  
                        

Total nonperforming loans

   $ 11,500     $ 9,804     $ 14,483  

Foreclosed real estate and other foreclosed assets

     644       573       2,221  
                        

Total nonperforming assets

   $ 12,144     $ 10,377     $ 16,704  
                        

Allowance for Credit Losses:

      

Allowance for loan losses

   $ 15,136     $ 14,761     $ 13,895  

Reserve for unfunded commitments

     881       716       466  
                        

Allowance for credit losses

   $ 16,017     $ 15,477     $ 14,361  
                        

Credit Quality Ratios:

      

Nonperforming loans to total loans (1)

     0.94 %     0.83 %     1.50 %

Nonperforming assets to total assets (1)

     0.86 %     0.76 %     1.51 %

Allowance for loan loss to total loans

     1.24 %     1.25 %     1.44 %

Allowance for credit losses to total loans

     1.31 %     1.31 %     1.49 %

Allowance for credit losses to nonperforming loans (1)

     139.28 %     157.86 %     99.16 %

(1) Amounts and ratios shown net of government guarantees on nonperforming loans of $3,978, $1,764 and $1,225, respectively.

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     Three Months Ended     Year Ended  

Allowance for Loan Losses:

   12/31/2006     9/30/2006     12/31/2005     12/31/2006     12/31/2005  

Balance, beginning of period

   $ 14,761     $ 13,863     $ 15,832     $ 13,895     $ 18,282  

Provision for loan losses

     459       3,629       (285 )     5,376       2,092  

Allowance related to acquired loans

     —         —         —         2,068       —    

Loans charged-off

     (371 )     (3,006 )     (1,901 )     (7,021 )     (6,925 )

Recoveries

     287       275       249       818       446  
                                        

Balance, end of period

   $ 15,136     $ 14,761     $ 13,895     $ 15,136     $ 13,895  
                                        

Net chargeoffs to average gross loans (1)

     0.03 %     0.91 %     0.67 %     0.54 %     0.68 %

Provision for credit losses to average gross loans (1)

     0.21 %     1.23 %     0.00 %     0.51 %     0.25 %

Reserve for Unfunded Commitments:

          

Balance, beginning of period

   $ 716     $ 664     $ 181     $ 466     $ 193  

Provision for unfunded commitments

     165       52       285       415       273  
                                        

Balance, end of period

   $ 881     $ 716     $ 466     $ 881     $ 466  
                                        

(1) Quarterly ratios are annualized.

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AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

Quarterly Net Interest Margin:

 

    

Three Months Ended

Dec 31, 2006

   

Three Months Ended

Sept 30, 2006

   

Three Months Ended

Dec 31, 2005

 

($ in thousands)

   Average
Balance
   Interest    %     Average
Balance
   Interest    %     Average
Balance
   Interest    %  

Assets

                        

Loans

   $ 1,201,896    $ 24,904    8.22 %   $ 1,189,151    $ 24,447    8.16 %   $ 984,936    $ 18,715    7.54 %

Taxable securities

     31,342      388    4.91 %     33,361      386    4.59 %     18,840      198    4.17 %

Nontaxable securities

     10,080      154    6.06 %     10,769      165    6.08 %     8,112      131    6.41 %

FHLB Stock

     6,319      6    0.38 %     6,319      —      0.00 %     5,375      —      0.00 %

Overnight deposits with other banks and other

     6,741      80    4.71 %     3,106      44    5.62 %     16,155      182    4.47 %
                                                            

Total interest earning assets

     1,256,378      25,532    8.06 %     1,242,706      25,042    7.99 %     1,033,418      19,226    7.38 %
                                                            

Noninterest earning assets

     121,056           120,668           80,183      
                                    

Total assets

   $ 1,377,434         $ 1,363,374         $ 1,113,601      
                                    

Liabilities

                        

Interest bearing demand deposits

   $ 90,849    $ 168    0.73 %   $ 91,827    $ 168    0.73 %   $ 76,170    $ 109    0.57 %

Savings and MMDA deposits

     379,385      3,071    3.21 %     352,140      2,700    3.04 %     333,347      1,789    2.13 %

Time deposits

     401,040      4,735    4.68 %     397,454      4,413    4.41 %     314,923      2,728    3.44 %
                                                            

Total interest bearing deposits

     871,274      7,974    3.63 %     841,421      7,281    3.43 %     724,440      4,626    2.53 %
                                                            

Overnight borrowings

     26,148      351    5.33 %     42,273      582    5.46 %     6,005      66    4.36 %

Other borrowings

     84,700      1,316    6.16 %     91,963      1,411    6.09 %     61,437      732    4.73 %
                                                            

Total interest bearing liabilities

     982,122      9,641    3.89 %     975,657      9,274    3.77 %     791,882      5,424    2.72 %
                                                            

Noninterest bearing demand deposits

     233,191           227,782           194,976      

Other noninterest bearing liabilities

     11,163           10,222           8,861      
                                    

Total liabilities

     1,226,476           1,213,661           995,719      

Stockholders’ Equity

     150,958           149,713           117,882      
                                    

Total liabilities and stockholders’ equity

   $ 1,377,434         $ 1,363,374         $ 1,113,601      
                                    

Net interest income and spread

      $ 15,891    4.17 %      $ 15,768    4.22 %      $ 13,802    4.66 %
                                                

Net interest margin to average earning assets

         5.02 %         5.03 %         5.30 %
                                    

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AWBC – 2006 Q4 Earnings

January 31, 2007

Page 12 of 12

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

Year to Date Net Interest Margin:

 

     Year Ended December 31,  
     2006     2005  

($ in thousands)

   Average
Balance
   Interest    %     Average
Balance
   Interest    %  

Assets

                

Loans

   $ 1,145,558    $ 91,743    8.01 %   $ 952,151    $ 70,898    7.45 %

Taxable securities

     31,069      1,504    4.84 %     17,805      820    4.61 %

Nontaxable securities

     9,919      601    6.06 %     8,536      538    6.30 %

FHLB Stock

     6,122      6    0.10 %     5,392      22    0.41 %

Overnight deposits with other banks and other

     3,945      203    5.15 %     5,533      224    4.05 %
                                        

Total interest earning assets

     1,196,613      94,057    7.86 %     989,417      72,502    7.33 %
                                        

Noninterest earning assets

     110,739           81,872      
                        

Total assets

   $ 1,307,352         $ 1,071,289      
                        

Liabilities

                

Interest bearing demand deposits

   $ 88,936    $ 650    0.73 %   $ 67,700    $ 278    0.41 %

Savings and MMDA deposits

     351,697      10,246    2.91 %     343,574      6,858    2.00 %

Time deposits

     376,340      15,947    4.24 %     283,639      8,087    2.85 %
                                        

Total interest bearing deposits

     816,973      26,843    3.29 %     694,913      15,223    2.19 %
                                        

Overnight borrowings

     39,056      2,019    5.17 %     30,727      970    3.16 %

Other borrowings

     79,934      4,705    5.89 %     44,737      2,140    4.78 %
                                        

Total interest bearing liabilities

     935,963      33,567    3.59 %     770,377      18,333    2.38 %
                                        

Noninterest bearing demand deposits

     218,230           179,115      

Other noninterest bearing liabilities

     9,955           9,341      
                        

Total liabilities

     1,164,148           958,833      

Stockholders’ Equity

     143,204           112,456      
                        

Total liabilities and stockholders’ equity

   $ 1,307,352         $ 1,071,289      
                        

Net interest income and spread

      $ 60,490    4.27 %      $ 54,169    4.95 %
                                

Net interest margin to average earning assets

         5.06 %         5.47 %
                        

The above net interest margin tables include 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%.

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