AmericanWest Bancorp. in Spokane must boost capital at its banking unit by Sept. 8 under a cease-and-desist order from the Federal Deposit Insurance Corp. and the Washington State Department of Financial Institutions.
The $1.8 billion-asset AmericanWest disclosed Friday that its bank would be required to increase its leverage ratio to 10%, double the typical minimum needed to be considered well capitalized.
The bank's leverage ratio was 4.61% as of the end of the first quarter, according to a quarterly report filed with the Securities and Exchange Commission.
The order, which is dated May 11, also requires the bank to reduce the amount of nonperforming loans, the concentration of construction and land development loans and its reliance on brokered deposits.
In addition, the bank must submit plans for improving profitability and liquidity.
"We were already well under way with substantially all of the action items, so there were no surprises in the agreement," Patrick J. Rusnak, AmericanWest's president and chief executive officer, said in a press release.
The company said April 30 that it had withdrawn an application to participate in the Treasury Department's Troubled Asset Relief Program, but it was pursuing other options for raising capital, including the possibility of selling branches.
AmericanWest had warned in March that it might be unable to survive.