AmericanWest Bancorp in Spokane said Thursday that it was revising third-quarter earnings to reflect an increase in its loan-loss provision and a subsequent chargeoff of $2.4 million from two bad loans. As a result, the $1.4 billion-asset AmericanWest's net income fell 72% from the third quarter of 2005, to $900,000. It had previously reported that earnings fell 38%, to $2.4 million.
The bad loans, both to the same borrower, had been classified as nonperforming in AmericanWest's Oct. 24 earnings announcement.
But the company has since learned that it would take longer than it expected to recover the remaining balance of the loans, because the borrower is involved in complex bankruptcy proceedings. The company said it expects to recover the funds from the bankruptcy proceedings.
