Back to GetFilings.com

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2005

or

For the transition period from              to             

Commission File Number 000-18561

AMERICANWEST BANCORPORATION

(Exact name of registrant as specified in its charter)

(509) 467-6993

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Table of Contents

AMERICANWEST BANCORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

March 31, 2005

Table of Contents

2

Table of Contents

AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CONDITION

(unaudited)

($ in thousands)

The accompanying notes are an integral part of these statements.

3

Table of Contents

AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED MARCH 31, 2005 AND 2004

(unaudited)

($ in thousands, except per share amounts)

The accompanying notes are an integral part of these statements.

4

Table of Contents

AMERICANWEST BANCORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2005 AND 2004

(unaudited)

($ in thousands)

The accompanying notes are an integral part of these statements.

5

Table of Contents

AMERICANWEST BANCORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Basis of Presentation

The foregoing unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2004. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of AmericanWest Bancorporation’s (AWBC, the Company or the Corporation) consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of AWBC’s consolidated financial position and results of operations.

Employee stock options are accounted for under the intrinsic value method as allowed under Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees. Stock options are generally granted at exercise prices not less than the fair market value of common stock on the date of grant. Under APB No. 25, no compensation expense is recognized pursuant to AWBC’s stock option plans for stock options that are granted at exercise prices not less than the fair market value of common stock on the date of grant. The following table sets out the pro forma amounts of net income and earnings per share that would have been reported had it elected to follow the fair value recognition provisions of Statement of Financial Accounting Standards Board No. 123, Accounting for Stock-Based Compensation, as amended.

The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the periods above: risk free interest rate of 4.25% and 4.19%, respectively, expected volatility of 26.52% and 25.77%, respectively, cash dividends of 0% for each period and expected stock option lives ranging from 5 to 10 years.

6

Table of Contents

AMERICANWEST BANCORPORATION

NOTE 2. Securities

All of the securities are classified as available-for-sale and are carried at market value. Unrealized gains and losses, net of tax, are excluded from earnings and reported as a net amount as a separate component of stockholders’ equity. Gains or losses on the sale of available-for-sale securities are determined using the specific identification method. Premiums and discounts are recognized in interest income using the effective interest method over the period to maturity. Carrying amounts and fair values at March 31, 2005 and December 31, 2004 were as follows:

NOTE 3. Loans and Allowance for Loan Losses

Loan detail by category as of March 31, 2005 and December 31, 2004 were as follows:

7

Table of Contents

AMERICANWEST BANCORPORATION

The allowance for loan loss is maintained at levels considered adequate by management to provide for possible loan losses. The allowance is based on management’s assessment of various factors affecting the loan portfolio, including problem loans, business conditions and loss experience, and an overall evaluation of the quality of the underlying collateral. Changes in the allowance for loan losses during the three months ended March 31, 2005 and 2004 were as follows:

NOTE 4. Comprehensive Income

Total comprehensive income, which includes net income and unrealized gains and losses on the Corporation’s available-for-sale securities, amounted to approximately $2.8 million and approximately $3.8 million for the three months ended March 31, 2005 and 2004, respectively.

NOTE 5. Earnings Per Share

The following is a reconciliation of the numerators and denominators for basic and diluted per share computations for net income for the three months ended March 31, 2005 and 2004 were as follows:

NOTE 6. Accounting Pronouncements

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure will no longer be an alternative. This statement will be adopted on January 1, 2006.

As permitted by Statement 123, the Company currently accounts for share-based payments to employees using Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share in Note 1 to our consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.

8

Table of Contents

AMERICANWEST BANCORPORATION

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain matters discussed or incorporated by reference in this Quarterly Report on Form 10-Q including, but not limited to, matters described in Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements about the business strategy, financial condition, results of operations, future financial targets and earnings outlook of the Corporation. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, impact of the current national and regional economy on small business loan demand in the Corporation’s market, loan delinquency rates, changes in portfolio composition, the AmericanWest Bank’s (AWB or the Bank) ability to attract quality commercial business, interest rate movements and the impact on margins such movement may cause, changes in the demographic make-up of the Corporation’s market, fluctuation in demand for the Corporation’s products and services, the Corporation’s ability to attract and retain qualified people, regulatory changes, competition with other banks and financial institutions, and other factors. For a discussion of factors that could cause actual results to differ, please see the Corporation’s prior report on Form 10-K as filed with the Securities and Exchange Commission. Words such as “targets,” “expects,” “anticipates,” “believes,” other similar expressions or future or conditional verbs such as “will,” “may,” “should,” “would,” and “could” are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereto. The Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting the Corporation under PSLRA’s safe harbor provisions.

The following discussion contains a review of the results of operations and financial condition for the first quarter in 2005 and 2004. This information should be read in conjunction with the financial statements and related notes appearing in this report. The reader is assumed to have access to AWBC’s Form 10-K for the year ended December 31, 2004, which contains additional information.

AmericanWest Bancorporation

AmericanWest Bancorporation (AWBC or Corporation) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Corporation conducts business through its wholly-owned subsidiary, AmericanWest Bank (AWB) a state-chartered, FDIC-insured commercial bank organized under the laws of the State of Washington. The Corporation’s main office is located in Spokane, Washington.

AmericanWest Capital Trust I (Trust), a subsidiary of AWBC, was formed in September 2002 for the exclusive purpose of issuing trust preferred securities and common securities and using the $10.3 million in proceeds from the issuance to acquire junior subordinated debentures issued by AWBC. Upon the adoption of amended FIN 46, the investment in the Trust is no longer consolidated on the Condensed Consolidated Financial Statements.

AmericanWest Bank

AWB provides a full range of banking services to small and medium-sized businesses, agricultural businesses, professionals, and consumers through 42 offices located in Eastern Washington and Northern Idaho.

The principal sources of the AWB’s revenue are 1) interest and fees on loans, 2) fees for deposit accounts and related services, 3) interest on investments and 4) interest on interest bearing deposits with other banks. AWB’s lending activities consist of term and operating loans to businesses and agricultural businesses, real estate construction and development loans, vehicle and equipment loans for both businesses and consumers, and real estate mortgage loans. AWB also offers a full line of deposit account products and related services.

9

Table of Contents

AMERICANWEST BANCORPORATION

Performance Overview

The table below summarizes the Corporation’s financial performance for the three months ending March 31, 2005 and 2004:

Net Income

The Corporation reported net income of approximately $3.1 million or $0.30 per fully diluted share for the three months ended March 31, 2005 compared to approximately $3.5 million and $0.34 for the same period in 2004. The decrease in net income is due mainly to the increase of interest expense and the increase in the provision for income taxes. The increase in the provision for income taxes is due mainly to historical tax credits which were recognized in 2004 which did not occur in 2005. Return on average assets for the three months ending March 31, 2005 and 2004 was 1.21% and 1.42%, respectively.

Net Interest Income

Net interest income was approximately $13.7 million for the three months ended March 31, 2005, a decrease from approximately $14.1 million for the like period in 2004. The decrease in net interest income was largely due to increases in the costs of deposits and borrowing costs offset by a slight increase in interest and fees on loans. The cost of deposits to the Company for the quarter ended March 31, 2005 was 1.79% compared to 1.65% for the quarter ended March 31, 2004. There was a decrease in net interest margin to 5.87% for the period ended March 31, 2005 compared to 6.20% for the like period last year. This decrease was due to increasing deposit costs, decreasing loan yields and decreasing investment yields. These were partially offset by decreasing borrowings costs.

10

Table of Contents

AMERICANWEST BANCORPORATION

The following table sets forth the Corporation’s net interest margin for the year to date ending March 31, 2005 and 2004:

The above table includes 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%.

Provision for Loan Losses

Provision for loan losses increased to approximately $1.1 million in the first quarter, compared to approximately $1.0 million in the first quarter of 2004. The increase was due to management’s continual assessment of specific loan characteristics in the portfolio. In general, AWBC regularly evaluates the level of provision and the allowance for loan losses for adequacy by considering changes in the nature of the loan portfolio, overall portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions that may affect a borrower’s ability to pay. Management continually monitors the economic conditions of the Corporation’s market, which includes Eastern Washington and Northern Idaho and includes this information in the analysis of its Provision for Loan Losses. In addition, management includes general economic conditions for its analysis. The provision for loan losses is an estimate and the use of different estimates or assumptions could produce different provision for loan loss. In addition, the allowance for loan losses and the provision for loan losses are subject to regulatory supervision, examination and change.

Noninterest Income

Noninterest income for the three months ended March 31, 2005 was approximately $1.6 million. This represented an increase from approximately $1.5 million for the like period in 2004. This increase was due mainly to increases in the value of life insurance and salary continuation assets, which was slightly offset by a decrease in the gains on sales of foreclosed real estate and other foreclosed assets as compared with the prior year.

Noninterest Expense

Noninterest expense decreased to approximately $9.5 million for the three months ended March 31, 2005 from approximately $10.0 million in the comparable quarter of 2004. This decrease is due mainly to the change in foreclosed real estate and other foreclosed assets expense for the quarter ended March 31, 2005 from the quarter ended March 31, 2004. The decrease in the foreclosed real estate and other foreclosed assets was mainly due to charge offs of approximately $0.7 million in the first quarter of 2004 which did not occur in 2005. This decrease was partially offset by the increasing occupancy expense for the quarter ended March 31, 2005 as compared to the quarter ended March 31, 2004. This increase in occupancy expense was due mainly to escalation clauses in existing lease agreements and a leased building in downtown Spokane for the corporate headquarters which was placed into service in December of 2004.

11

Table of Contents

AMERICANWEST BANCORPORATION

Income Tax Expense

Income tax expense has increased as a percentage of income before income taxes for the three month period ended March 31, 2005 to 33.3% compared to 24.3% in 2004. There were two buildings placed into service during the first quarter of 2004 in which AWBC had purchased historical rehabilitation tax credits. The Corporation recognized these tax credits during the three months ended March 31, 2004 causing the effective tax rate to decrease during that period.

Nonperforming Assets

Nonperforming assets include loans that are 90 or more days past due or in nonaccrual status and real estate and other loan collateral acquired through foreclosure. Total nonperforming assets were approximately $33.3 million or 3.26% of total assets at March 31, 2005. This compares to approximately $28.5 million or 2.71% of assets at December 31, 2004. The majority of nonperforming assets are comprised of several loans and properties discussed below.

The Company has acquired title to an ice skating complex in Spokane that it is currently carrying in foreclosed real estate and other foreclosed assets. It is carried at $1.3 million and is being operated as an ice skating rink. The asset is being carried at estimated market value and is being marketed as both an operating facility and as an alternative use facility. The Company has this complex under contract for sale and expects the sale to close in the second quarter of 2005 at its current carrying value.

The Company has classified $6.2 million in loans to a real estate developer as nonaccrual due to delinquency and the apparent inability to repay the debt without liquidation of the collateral. The Company has evaluated collateral coverage and has determined adequate coverage. The Company expects to sell the note to a private investor during the second quarter of 2005 for the full amount owed to the company including interest.

The Company has classified $5.3 million in loans to a wine grape vineyard and winery as nonaccrual due to continuing operating losses and inadequate cash flow to service debt. The entity continues to operate. The Company has evaluated collateral coverage and has provided for an impairment on the loan. The borrower is marketing the real estate and seeking alternative financing.

The Company has classified $2.2 million in loans to a row crop farmer as nonaccrual due to continued operating losses and inadequate cash flow to service debt. The entity continues to operate. The Company has evaluated collateral coverage and has provided for an impairment on the loan. The borrower is currently marketing the real estate.

The Company has $3.0 million in loans to an auto dealer as nonaccrual due to a maturity of the loans and cessation of operations by the owner. The Company has evaluated collateral coverage and has provided for an impairment on the loan. The Company intends to obtain title to the property through foreclosure and market the property to achieve repayment.

A $4.8 million loan on a mixed use office/retail building in Spokane has been classified as nonaccrual due to slow lease up and lack of ability to support debt service from current leases. The Company has evaluated collateral coverage and has provided for an impairment on the loan. The Company is evaluating options for remediation at this time.

Financial Condition

The Company’s consolidated assets at March 31, 2005 and December 31, 2004 were approximately $1.0 billion. Cash and cash equivalents decreased to approximately $23.2 million at March 31, 2005 from $29.2 million at December 31, 2004.

Total stockholders’ equity was approximately $109.0 million at March 31, 2005, up from approximately $105.1 million at December 31, 2004. The increase in stockholders’ equity was mostly due to net income and the exercise of stock options by employees and directors.

12

Table of Contents

AMERICANWEST BANCORPORATION

Investment Portfolio

The Corporation’s investment portfolio decreased from approximately $33.9 million at December 31, 2004 to approximately $33.3 million at March 31, 2005. This decrease was due mainly to decreases in the market value of investments, principle payments received and a called investment, which was offset by the purchase of an investment. All securities are classified as available-for–sale and recorded at the market value. Management believes that this classification provides greater flexibility to respond to interest rate changes and liquidity needs.

Loan Portfolio

The major classifications of loans at March 31, 2005 and December 31, 2004 can be found in the Notes to Condensed Consolidated Financial Statements.

Total gross loans were approximately $907.5 million as of March 31, 2005 compared to approximately $927.9 million at December 31, 2004. The decrease is related to decreases in commercial real estate, agricultural and real estate construction categories. The decreases in agricultural and real estate construction are partially due to seasonality within those industries. Certain commercial real estate loans in the portfolio were sold to an investor during the first quarter of 2005 which contributed to the decrease in the commercial real estate loan category.

Allowance for Loan Losses

At March 31, 2005, the Corporation’s allowance for loan losses was approximately $16.9 million or 1.86% of total gross loans. This compares to approximately $18.5 million or 1.99% at December 31, 2004. The allowance for loan losses is increased by charges to income through the provision for loan losses and decreased by charge-offs, net of recoveries. Loans are charged to the allowance when management believes the collection of principal is unlikely.

In assessing the adequacy of the allowance for loan losses, management utilizes an analysis of credits for objectively analyzing recent historical loan loss experience and projecting future allowance requirements. The analysis provides an inherent loss rate by risk ratings. Each category of risk rating is assigned a projected loss value based upon general historic valuations and current management expectations for future losses. Additionally, management utilizes an analysis of impaired loans, determining the collateral coverage of loans to assess the adequacy of the allowance. Management also compares projected future allowance requirements with current nonperforming loan conditions and historical loss statistics. Finally, management utilizes judgment based on individual loan evaluations, delay in receipt of customer financial information, related credit facilities, volatility of economic and customer specific conditions or concentrations, and delinquency rates in assessing allowance for loan losses.

The majority of the Company’s loans are to small and medium-sized businesses, agricultural businesses, professionals and consumers in Eastern Washington and Northern Idaho and are secured by residential and commercial real estate, crops and business inventory and receivables. Real estate values in this area remain stable. Prices for agricultural commodities also remain at normal levels. However, significant, long-term changes in either of these underlying factors could affect the collectability of a material portion of the Company’s loans outstanding. Each of these factors is also considered in the analysis of assessing the adequacy of the allowance for loan losses.

Management believes that the allowances for loan losses and other real estate owned are adequate. Management uses currently available information to recognize losses on loans and foreclosed real estate; however, future additions to the allowances may be necessary based on changes in economic conditions and borrower or loan characteristics. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowance based on their judgments of information available to them at the time of their examination.

Deposits

The Company’s primary source of funds is customer deposits. To attract and retain deposits, the Corporation offers a wide variety of account types and maturities, both interest bearing and noninterest bearing. Some account types have additional services bundled with them, such as insurance, travel discounts, free checks and free or discounted access to other bank services. Interest rates on accounts are determined by management based on the Company’s funding needs and market conditions and can change as frequently as daily.

13

Table of Contents

At March 31, 2005, total deposits were approximately $856.8 million, a decrease of approximately $38.0 million from $894.8 million at December 31, 2004. NOW and savings accounts, which include money market accounts, decreased approximately $27.1 million to $425.3 million at March 31, 2005 from $452.4 million at December 31, 2004 and the Corporation experienced a decrease of approximately $17.0 million in time deposits to $255.9 million at March 31, 2005 from $272.9 million December 31, 2004. Noninterest bearing deposits increased $6.1 million to $175.7 million from $169.6 million at December 31, 2004. The decreases in money market now and savings accounts were concentrated in money market account types and reflect decreases in balances from some larger depositors related to rate differentials and use of the funds for business purposes. The decrease in time deposits was related to decreases in public funds and other wholesale deposits. AWBC has put into place late in the first quarter of 2005 an incentive program for employees to grow the deposit base through the attraction of core deposit funding.

Liquidity and Capital Resources

Management actively analyzes and manages the Corporation’s liquidity position. The objective of liquidity management is to ensure the availability of sufficient cash flows to meet all financial commitments and to capitalize on opportunities for profitable business expansion. Management believes that the Corporation’s cash flow will be sufficient to support its existing operations for the foreseeable future.

As indicated on the Corporation’s Condensed Consolidated Statement of Cash Flows, net cash from operating activities for the three months ended March 31, 2005 contributed approximately $6.4 million to liquidity compared to approximately $3.8 million for the three months ended March 31, 2004. This increase is due mainly to the changes in asset and liability accounts from the prior year.

In addition to the strategy noted for deposits above, the Corporation uses short-term and long-term borrowings, principally in the form of advances from the Federal Home Loan Bank of Seattle, as a source of funding. With maturities ranging from overnight to 30 years, these advances are used to provide a ready source of liquidity for the operations and are a tool the Corporation uses to manage its interest rate risk.

At March 31, 2005, short-term and long-term borrowings stood at approximately $31.3 million and $4.3 million, respectively. These balances represented an increase of approximately $6.8 million in short-term borrowings and a decrease of approximately $1.4 million in long-term borrowings in comparison to December 31, 2004, which were $24.5 million and $5.7 million, respectively. As of March 31, 2005 and December 31, 2004, AWBC had lines of credit available of approximately $187.8 million and $198.3, respectively. The lines were available for short-term and long-term maturities up to 30 years at market interest rates.

As a federally-regulated bank holding corporation, the Corporation is required to maintain minimum levels of capital at all times at both AWBC and AWB. Bank regulatory agencies have promulgated regulations that measure the Corporation’s capital in three ways. Tier one capital, currently comprised of stockholders’ equity and trust preferred securities, is measured against assets both on a book basis and on a risk-weighted basis according to standardized risk categories for specific types of assets. In addition, tier one capital is adjusted for certain other items, most prominently the allowance for loan losses and certain intangibles, to arrive at defined total regulatory capital. This amount is then measured against risk-weighted assets.

The table below lists AWB and AWBC’s capital ratios relative to regulatory requirements at March 31, 2005:

14

Table of Contents

AMERICANWEST BANCORPORATION

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Management considers interest rate risk to be a market risk that could have a significant effect on the financial condition of AWBC. In management’s opinion, there have been no material changes in reported market risks faced by AWBC since the end of the most recent fiscal year.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures: As of the end of the period covered by this report and pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”), AWBC’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness and design of the Corporation’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this report, that the Corporation’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting information required to be disclosed by the Corporation, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in Internal Controls: In addition and as of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter to which this report relates that have materially affected or are reasonably likely to materially affect, the internal control over financial reporting.

15

Table of Contents

AMERICANWEST BANCORPORATION

Part II. Other Information

Item 1. Legal Proceedings

Periodically and in the ordinary course of business, various claims and lawsuits are brought against AWBC or AWB, such as claims to enforce liens, condemnation proceedings on properties in which the Bank held a security interest, claims involving the making and servicing of real property loans and other issues incident to the business of AWBC and AWB. In the opinion of management, the ultimate liability, if any, resulting from such claims or lawsuits will not have a material adverse effect on the financial position or results of operations of AWBC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no changes in securities, use of proceeds or, issuer purchases of equity securities in the period covered by this report.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

No items were submitted to a vote during the period covered by this report.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

a. Exhibits. The exhibits filed as part of this report are as follows:

b. Reports on Form 8-K.

16

Table of Contents

AMERICANWEST BANCORPORATION

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 6, 2005.

17