[Vision2020] American West Bank on the move

[Jeff Harkins]

Mr. Ivie,

Actually, the Latah Bank was a "true local bank", 
but as you point out, in these days they just 
can't compete with the "full service" regionals, 
nationals and international bank systems.  We had 
our share of "local" banks - they are all gone - 
except say the Latah Federal Credit Union

The banking business is a direct parallel to 
stores that sell basic consumer commodities - 
they just can't compete with the larger 
institutions - the volume purchasing and squeezed 
margins preclude the survival of the small 
guy.  But for consumers, of course, that is good 
news - it usually means more choice at lower 
cost.  Just so we are on the same page, cash is 
one of the simpler commodity products - much 
simpler than tooth paste, shampoo and dog 
food.  And the basic transactions are even 
simpler - the bank borrows at one rate and lends at a higher rate.

You do raise an interesting point about one bank 
putting another bank out of business - if you 
know banking history, then you know that banks 
were predatory competitors before Andrew Jackson 
intervened.  The central banking system and the 
mandatory reserve system were developed to make 
the capital system a bit more stable.

As to banks expanding, I submit that banks do 
indeed enter a market area, and if successful 
will invest in new and larger buildings.  Just 
visit a healthy urban area and look.  That said, 
cyberbanking is reducing the need for large scale 
infrastructure (bricks and mortar) 
banks.  Furthermore, our local economy is not 
robust and banks are not going to invest large 
amounts of capital in localities that do not have 
healthy local economies.  My hunch is that when 
bankers get wind of an "anti-business" climate, 
they will reduce their investments in that area accordingly.

The growth model in today's banking world seems 
more focused on providing convenient access for 
customers to banking services.  The "vending 
machine" for a bank is rather simple - take money 
in, put money out.  Growth is manifested by 
adding a branch in a mall, adding an ATM machine 
in a college eating area or a strip center and 
expanding hours of drive in banking.

I find your comments about businesses opening and 
closing curious.  Businesses come and businesses 
go.  We have had large box retailers come and 
go.  The buildings have not remained empty for very long.

As to your personal financial situation, I don't 
know you or your financial standing, so it is not 
reasonable to ask me to advise you on where to 
"invest for the best return" (your words - find 
predatory pricing), but start with your credit 
score - that can provide you with an 
understanding of how much leverage the market 
will provide you.  Then use the online 
information services to determine the market 
return for various investment vehicles. The 
choices today are stunning (thanks mostly to the 
removal of restrictions on banks) and the 
relatively unfettered movement of investment 
capital across international borders is reducing 
some of the uncertainty in capital markets.


At 12:58 AM 2/13/2006, you wrote:
>So, did you say all of that just to slip in that last
>sentence?  Or are you giving us some financial advice?
>  If the intent is financial advice, I would be curious
>(as a past shareholder who bought low and sold what I
>felt was high at the time) how FirstBank Northwest
>compares.  I really feel that you would be hard
>pressed in this day of mergers and acquisitions to
>find a true "local community bank".  Possibly, the
>difference could be how a bank treats it's "local"
>customers.  Could you explain to us  (compare and
>contrast) the two types of businesses (super center
>vs. banking enterprise)?  An observation of mine is
>that although banks tend to merge with or be bought
>out by other financial instutions, I have yet to see
>one come into a town and years later build a bigger
>bank and shut down the old one (never to use the
>building again).  Also, I don't think I have ever seen
>one bank put another one out of business in a town.
>Please, please tell me where I can get predatory
>pricing on interest rates in order to gain my
>business!
>
>--- Jeff Harkins <jeffh at moscow.com> wrote:
>
> > For those interested in knowing more about this
> > "local community
> > bank" - you might want to visit this link:
> >
> >
>http://moneycentral.msn.com/investor/invsub/ownership/ownership.asp?Symbol=AWBC
> >
> > You might find it interesting to note that about 34
> > % of the
> > outstanding stock is held by large institutions.
> > It does appear that their growth model (business
> > model) is to acquire
> > small "really local" banks.
> >  From what I can glean, it went public in 1995 or
> > so, with 10
> > "financial centers".  It has grown to 40 financial
> > centers in 10
> > years. Below are two of the more recent
> > acquisitions.
> >
> > AmericanWest Bancorporation Announces Agreement To
> > Acquire Columbia
> > Trust BancorpNovember 30, 2005
> > AmericanWest Bancorporation and Columbia Trust
> > Bancorp jointly
> > announced that they have entered into a definitive
> > agreement pursuant
> > to which AmericanWest Bancorp will acquire Columbia
> > Trust Bancorp,
> > the holding company for Columbia Trust Bank, based
> > in Pasco,
> > Washington, in a transaction valued at $37.75
> > million or $45.70 per
> > Columbia Trust Bancorp share. Closing on this
> > transaction is expected
> > during the last half of the first quarter of 2006.
> > Columbia Trust
> > shareholders may elect to exchange each share held
> > for cash or stock,
> > although elections may be in the proration to
> > achieve the targeted
> > stock-cash split of 50%-50%. After completion of the
> > holding company
> > merger, Columbia Trust Bank will be operated as a
> > division of
> > AmericanWest Bank until integration is completed, at
> > which time it
> > will be merged into AmericanWest Bank.
> >
> > AmericanWest Bancorporation Completes Merger with
> > Latah
> > BancorporationAugust 02, 2002
> >
> >
> > AmericanWest Bancorporation announced the completion
> > of its merger
> > with Latah Bancorporation, Inc. of Latah,
> > Washington. AmericanWest
> > will pay $21.22 cash and .5192 of a share of its
> > stock for each Latah
> > Bancorporation, Inc. share.
> >
> >
> > It is a business that seems to recognize that in
> > order for the
> > business to prosper, it must grow.  And it has done
> > some good growing
> > the past decade.  It is rated as 7/10 on the Forbes
> > index (a bit
> > better than the average in its class), but it does
> > not appear to be
> > paying dividends at the present time.
> > If your interests in the financial markets are
> > focused on the
> > Northwest, it does appear to have some appeal.  It
> > may be a good
> > prospect for merger itself!
> > However, be cautioned, it does have financial
> > centers in a lot of
> > towns with WalMart Supercenters, e.g., Spokane,
> > Colville, Kennewick,
> > Sunnyside, Moses Lake, Yakima and Ephrata -  to name
> > a few.
> >
> > Cheers. >
>_____________________________________________________
> >  List services made available by First Step
> > Internet,
> >  serving the communities of the Palouse since 1994.
> >
> >                http://www.fsr.net
> >
> >           mailto:Vision2020 at moscow.com
> >
>¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
> >
>
>
>__________________________________________________
>Do You Yahoo!?
>Tired of spam?  Yahoo! Mail has the best spam protection around
>http://mail.yahoo.com
>
>_____________________________________________________
>  List services made available by First Step Internet,
>  serving the communities of the Palouse since 1994.
>                http://www.fsr.net
>           mailto:Vision2020 at moscow.com
>¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯