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Two weeks after striking a deal to buy Capitol Bancorp's Seattle unit, AmericanWest is moving into the California market with a deal for Capitol's Sunrise Bank in San Diego.
June 9 -
Investors have recapitalized several banks, most notably those in the western U.S., in recent months with the intention of salvaging their franchises and creating vehicles that can be used to buy other banks.
May 27
AmericanWest Bank has struck its third deal this year, this time for Viking Financial Services Corp. in Seattle.
The $2 billion-asset AmericanWest, based in Spokane, Wash., said Thursday it would pay $7.2 million, or $2.65 per share, in cash to acquire the $406 million-asset Viking. The deal is expected to close by year-end. Viking Bank was just adequately capitalized at June 30, with a total risk-based capital ratio of 8.17%. It is also facing significant credit hurdles, with 8.81% of its loans noncurrent in the same period.
In November 2009, the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions gave the bank 180 days to increase its leverage ratio to at least 10%. According to FDIC data, the bank never reached that target. At June 30, that ratio was 5.13%.
In a press release, Landon Brazier, chairman of Viking said the deal gives Viking's shareholders an exit. "The last three years have been extremely challenging for Viking Bank and other local banks in the area," Brazier said. "This transaction also delivers our shareholders liquidity in a time of considerable market turmoil."
The deal also continues the turnaround at AmericanWest, which was on the verge of failure last year. AmericanWest Bancorp filed for bankruptcy and the U.S. Bankruptcy Court for the Eastern District of Washington oversaw the bank's sale to SKBHC Holdings for $6.5 million in December.
SKBHC immediately injected $185 million of fresh capital into AmericanWest Bank. The holding company raised $750 million in private equity and other sources and still has nearly $500 million left for future acquisitions.
Since emerging from the bankruptcy sale, the bank has been looking to expand its reach in the Puget Sound region. In July, it acquired the $146 million-asset Bank of the Northwest in Bellevue, Wash., for $17 million in cash from Capitol Bancorp Ltd. That deal brought the bank four branches, while the Viking transaction adds seven.
In July, the company also moved into southern California with the acquisition of the $292 million-asset Sunrise Bank in San Diego, which was also owned by Capitol Bancorp, for $18.5 million.
