Banking: AmericanWest Bank to buy Bank of the Northwest
Capitol Bancorp Limited has entered into a definitive agreement under which all of the outstanding shares of Bank of the Northwest, which is majority owned by Capitol Bancorp and certain of its affiliates, will be acquired by way of an all-cash takeover by an affiliate of AmericanWest Bank,
The completion of this transaction will constitute Capitol's exit from the Washington market with the divestiture of approximately USD146 million of assets as of 31 March, 2011 and Bank of the Northwest's four banking offices in the Puget Sound region.
The transaction, which is subject to the receipt of requisite regulatory and shareholder approvals, is expected to be completed in the third quarter of 2011.
The Bank of the Northwest was last year the subject of an FDIC / Washington Dep. of Financial Institutions Action.
In April, 2010, FDIC "charged" the bank with "unsafe or unsound banking practices relating to its assets and earnings. The bank consented to the making of an order that included that it must have and retain "qualified management."
Amongst various terms, it also agreed to comply with applicable laws and to "restore all aspects of the bank to a safe and sound condition including capital adequacy, asset quality" and more.
Further, it agreed that any new board member must be first approved by the Washington DFI and that the existing board would take on an active management role.
But most telling is that "within 30 days from the effective date of this Order, the bank shall develop, adopt and implement a plan to sell itself or merge itself into an insured depository institution that is not controlled by Capitol Bancorp or otherwise recapitalise so that the bank isno longer controlled by Capitol Bancorp." The bank was also barred from making any material transactions.
The full Order is at http://www.fdic.gov/bank/individual/enforcement/2010-04-42.pdf and includes the weasel words "without admitting or denying the charges..."
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