AmericanWest Bancorporation Announces 2006 Third Quarter Results and Quarterly Cash Dividend.

SPOKANE, Wash. -- AmericanWest Bancorporation (Nasdaq: AWBC) today announced that net income for the three and nine months ended September 30, 2006 was $2.4 million or $0.21 per diluted share and $6.8 million or $0.61 per diluted share, respectively. This compares to $3.2 million or $0.30 per diluted share for the three months ended September 30, 2005 and $9.9 million or $0.94 per diluted share for the nine months ended September 30, 2005.

On October 19,2006 AWBC and Utah-based Far West Bancorporation announced the signing of a definitive agreement for Far West Bancorporation (Far West) to merge with and into AWBC, followed by the merger of Far West's principal operating subsidiary, Far West Bank (FWB) with and into AWBC's principal operating subsidiary, AmericanWest Bank (AWB), in a transaction valued at approximately $150 million. The transaction is expected to be completed during the first quarter of 2007 and is subject to regulatory approval and approval by the shareholders of both companies. For additional information related to this transaction refer to the Form 8-K filed with the Securities and Exchange Commission on October 19, 2006.

"The acquisition of Far West Bank sharply accelerates our planned expansion in Utah by adding a well-known brand with 16 branches, a strong customer base and a great team of bankers," said Robert M. Daugherty, AmericanWest Bank President and Chief Executive Officer. "By combining with Far West we're creating a bank whose size is unique to the Utah market and we believe that gives us a distinct advantage."

AWBC is also announcing that its Board of Directors has approved a cash dividend of $0.03 per share, payable on November 17, 2006 to shareholders of record at the close of business on November 3, 2006.

Loan Growth and Credit Quality:

Gross loans were relatively unchanged at $1.2 billion at September 30, 2006 and at June 30, 2006. Gross loans increased $223 million or 23% as compared to December 31, 2005, including $146 million in loans acquired from Columbia Trust Bank (CTB) during the first quarter of 2006. During the third quarter of 2006, government guaranteed loans totaling $10.2 million were sold offset by a substantial portion of new loan production. The percentage of commercial real estate loans remained consistent at 51% of the total loan portfolio at September 30, 2006.

Total nonperforming loans were $12.2 million or 1.03% of total gross loans at September 30, 2006 which is an improvement from $13.6 million or 1.14% of total gross loans as of June 30, 2006 and $14.5 million or 1.50% at December 31, 2005. Total nonperforming assets, including foreclosed real estate and other foreclosed assets, were $12.7 million or 0.93% of total assets at September 30, 2006 which is an improvement from $14.5 million or 1.05% of total assets as of June 30, 2006 and $16.7 million or 1.51% of total assets at December 31, 2005. The consistent improvements in these ratios since December 31, 2005 reflect both the reduction of nonperforming assets and the increase in AWBC's asset base.

The allowance for loan losses was $15.5 million at September 30, 2006 as compared to $14.5 million at June 30, 2006 and $14.4 million at December 31, 2005. At September 30, 2006 the allowance for loan losses as a percentage of total gross loans was 1.31% which compares to 1.22% at June 30, 2006 and 1.49% at December 31, 2005.

The loan loss provision for the quarter ended September 30, 2006 was $1.3 million and for the nine months it was $2.8 million. This compares to $1.1 million and $2.4 million for the three months and nine months ended September 30, 2005, respectively. The loan loss provision in the third quarter is principally attributable to movement within the risk grades of the portfolio primarily in the agricultural category. For the three months ended September 30, 2006 net charge offs, annualized as a percentage of average gross loans were 0.12% as compared to 0.26% for the three months ended June 30, 2006. For the nine months ended September 30, 2006 and 2005, the annualized net charge offs were 0.45% and 0.69% of total average loans, respectively.

Deposit Balances:

Total deposits increased $35 million or 3% during the three months ended September 30, 2006. Deposits increased $203 million or 23% as compared to December 31, 2005, including $176 million in deposits acquired from CTB during the first quarter.

Daugherty remarked, "We are continuing our investment in the Company with new financial centers placed in growth markets. We believe these strategic investments, when combined with a full array of competitive banking products and services, will be a key driver of future deposit and earnings growth."

Net Interest Margin and Net Interest Income:

The net interest margin was 5.03% for the quarter ended September 30, 2006 as compared to 5.07% for the quarter ended June 30, 2006 and 5.23% for the quarter ended September 30, 2005. The decline in the net interest margin during the third quarter was mainly due to the cost of funds rising more quickly than the loan yields. The yield on earning assets increased by 15 basis points to 7.99% and the cost of interest bearing liabilities increased 27 basis points to 3.77% during the quarter ended September 30, 2006 as compared to the quarter ended June 30, 2006.

Compared to the similar quarter of the prior year, the earning assets yield increased 73 basis points and the cost of interest bearing liabilities increased 118 basis points. The slower rise in the earning assets yield as compared to the cost of interest bearing liabilities during this past year of rising market rates is attributable to tighter loan spreads due to competition and deliberate changes in the loan portfolio to improve overall credit quality. The improvement in credit quality is also indicated in the nonperforming asset ratios. Also, the cost of funds is increasing due to higher borrowing costs.

Net interest income was $15.7 million for the quarter ended September 30, 2006 as compared to $15.5 million for the quarter ended June 30, 2006 and $13.4 million for the same period in 2005. Net interest income for the nine months ended September 30, 2006 was $44.4 million as compared to $40.2 million for the similar period of the prior year. Net interest income is higher due to an increase in average earning assets which has offset the reduction in the net interest margin.

Noninterest Income and Expense:

Noninterest income was $2.8 million for the quarter ended September 30, 2006 as compared to $2.2 million for the quarter ended June 30, 2006 and $2.0 million for the similar quarter of the prior year. Noninterest income for the nine months ended September 30, 2006 was $6.7 million as compared to $5.8 million for the similar period of the prior year. During the quarter, government guaranteed loan sales of $10.2 million resulted in noninterest revenues of $0.5 million. Management is continuing to evaluate similar opportunities going forward. Additionally, increased revenues are being driven by higher deposit and other service fees and mortgage banking income.

Noninterest expense was $13.2 million for the quarter ended September 30, 2006 as compared to $12.7 million for the quarter ended June 30, 2006 and $10.5 million for the similar quarter of the prior year.

Noninterest expense for the nine months ended September 30, 2006 was $7.7 million higher than the prior year. The increase consists mainly of salaries and employee benefits of $5.1 million due to the higher FTE count including the expansion with CTB, new Idaho financial centers and operations in Utah. Additionally, in the prior year there was a reversal of accruals related to deferred compensation and salary continuation agreements of $0.7 million. Various other categories of expenses increased including other expenses of $0.9 million, equipment expense of $0.5 million and intangible assets amortization of $0.5 million. The other expenses increased from the similar period of the prior year due mainly to increased advertising costs, training costs, other acquisition related expenses and various other expense increases related to growth initiatives. Additionally, an exchange of bank owned life insurance policies resulted in a $0.6 million loss in 2005.

The efficiency ratio was steady for the quarter at 70.10% as compared to 69.99% for the three months ended June 30, 2006, and it was 67.93% for the third quarter of 2005. AWB management anticipates an improvement going forward as revenues expand based on growth initiatives.

Income Taxes:

The effective tax rate for the nine months ended September 30, 2006 was 36.4% which is higher than the similar period of the prior year of 28.1%. During the third quarter of 2005, AWBC recorded a $0.9 million reversal of a tax reserve which significantly reduced the effective tax rate in that year. The effective tax rate for the three months ended September 30, 2006 was 38.0% and is consistent with management's expectations for the fourth quarter of 2006. The effective tax rate increased in 2006 primarily due to the recapture of certain tax credits recognized in prior years due to modification of the usage of a building and uncertain completion of other construction.

Company Expansion:

The Bank opened its permanent financial center in Hayden, Idaho during the third quarter, replacing the temporary facility that was opened in 2002. Also, during the third quarter, the Bank opened a financial center in an emerging growth area on the west side of Yakima, Washington while closing an older and less convenient office that generally served the same market.

Other expansion activities include the opening of a loan production office in the Salt Lake City, Utah, metropolitan area during the second quarter of 2006. The loan production office is anticipated to contribute to net income by the end of the year.

AWB expects to open three de novo financial centers in the fourth quarter of 2006. These are located in Coeur d'Alene, Idaho, in College Place near Walla Walla, Washington and in the West Plains area near Spokane, Washington.

Business Summary:

AmericanWest Bancorporation is a bank holding company whose principal subsidiary is AmericanWest Bank, a community bank with 43 financial centers located in Eastern Washington and Northern Idaho, as well as loan production offices in Ellensburg, Washington and South Jordan, Utah. For further information on the Company or to access Internet banking, please visit our web site at www.awbank.net.

Forward Looking Statements:

This document contains comments and information that constitute "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995). The forward-looking statements herein are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to open new financial centers and to do so on time and on budget; the ability to realize contribution from the Company's loan production office in Utah and new financial centers; the ability to grow revenues and improve the efficiency ratio; the ability of the companies to obtain the required shareholder or regulatory approvals for the transaction with Far West; the ability of the companies to consummate the transaction; the ability to successfully integrate the companies following the transaction; a material adverse change in the financial condition, results of operations or prospects of either company; the ability to fully realize the expected cost savings and revenues or the ability to realize them on a timely basis; the risk of borrower, depositor and other customer attrition after the transaction is completed; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical and technological factors affecting the companies' operations, pricing and services; and other risk factors referred to from time to time in filings made by the Company with the Securities and Exchange Commission. When used in this document, the words "believes," "estimates," "expects," "should," "anticipates" and similar expressions as they relate to either company or the proposed transaction are intended to identify forward-looking statements. Forward-looking statements speak only as to the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

This press release may be deemed to be offering or solicitation materials of AmericanWest Bancorporation and Far West Bancorporation in connection with the proposed merger of Far West with and into AmericanWest. Shareholders are urged to read the joint proxy statement/prospectus that will be included in the registration statement on Form S-4, which AmericanWest will file with the SEC in connection with the proposed acquisition, because both will contain important information about AmericanWest, Far West, the acquisition and related matters. The directors and executive officers of AmericanWest and Far West may be deemed to be participants in the solicitation of proxies from their respective shareholders. Information regarding AmericanWest's participants and their security holdings can be found in its most recent proxy statement filed with the SEC, and information for both AmericanWest and Far West participants in the joint proxy statement/prospectus when it is filed with the SEC.

Additional Information and Where to Find It:

Investors and security holders may obtain and are urged to carefully review and consider AWBC's public filings with the SEC. The documents filed by AWBC with the SEC may be obtained free of charge at AWBC's website at www.awbank.net or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from AWBC by requesting them in writing at AmericanWest Bancorporation, 41 W. Riverside Avenue, Suite 400, Spokane, Washington 99201, by emailing [e-mail], or by telephone at 509-232-1536.

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The above net interest margin tables include 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%.