AmericanWest Bancorporation Announces Joint Agreement to Strengthen Subsidiary Bank Condition and Operations.

SPOKANE, Wash. -- AmericanWest Bancorporation (the "Company") (NASDAQ: AWBC) today announced that its principal operating subsidiary, American West Bank (the "Bank"), entered into a joint agreement with the FDIC and the Washington Department of Financial Institutions for an action plan designed to strengthen and improve the Bank's financial condition and operations. The plan is based on items identified in a routine regulatory exam completed in December 2008 and largely reflects initiatives already underway by the Board of Directors and Management.

"Like many banks facing unprecedented challenges, AmericanWest Bank has been affected by the level of provisions required for non-performing loans and the steep declines in the value of underlying residential real estate collateral," said Patrick J. Rusnak, President and CEO. "Our goals and our direction are absolutely clear--we are taking a head-on approach to issues, making prudent changes, and working hard to get results. We continue to work closely with regulators to quickly return AmericanWest to financial strength and stability."

Included in the agreement, known as a "cease and desist order," are initiatives Management is implementing to improve the Bank's overall performance, such as increasing regulatory capital, reducing the amount of non-performing loans, adopting changes to loan policies and monitoring procedures, reducing the concentration of "Land Development and Construction Loans," reducing reliance on brokered deposits, and providing regulators with copies of strategic plans for profitability and liquidity. The agreement also provides that the Bank will obtain prior regulatory approval before the payment of any cash dividends or the appointment of any senior executive officers or directors.

"We were already well underway with substantially all of the action items, so there were no surprises in the agreement," said Rusnak. "Since our change in executive leadership last summer, the restructured management team has focused on addressing these issues, and significant progress has already been made." Key steps already taken or commenced include:

* The Bank initiated the process of improving regulatory capital ratios during the second quarter of 2008, and Management continues pushing toward improved capital ratios through both new private equity investments and reductions to the balance sheet size through divestitures.

* Management continues to aggressively address problem asset issues, and believes the majority of its charge-offs and loss provisioning related to the residential construction and development portfolio have been recognized.

* The Bank stopped originating residential land development loans during the third quarter of 2007, and reduced the balance of its land development and construction portfolio by $181 million, or 35%, since December 31, 2007. The other segments of the loan portfolio are performing substantially better than the land development and construction portfolio, with non-performing loans representing 2.1% of total loans in those other segments as of March 31, 2009.

* The Bank reduced total brokered deposits by $106 million, or 79%, as of March 31, 2009 compared to the prior year. Brokered deposits have been replaced primarily by retail certificates of deposit from customers throughout the Bank's principal market areas.

* Management implemented expense reductions resulting in annualized savings in excess of $7 million. The savings stem from the new business model successfully implemented during the fourth quarter of 2008, the consolidation of six financial centers in January of 2009, and a 19% reduction over the past year in the total full-time equivalent employee count.

"We have made significant progress on these issues since the exam, and the Board and Management are committed to complying with all aspects of the agreement," said Rusnak. "This agreement is consistent with our objective of improving the financial performance of our Bank as we continue serving our customers and communities on a daily basis."

About AmericanWest Bancorporation:

AmericanWest Bancorporation is a bank holding company whose principal subsidiary is AmericanWest Bank which includes Far West Bank operating as an integrated division of AmericanWest Bank. AmericanWest Bank is a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. For further information on the Company, please visit our web site at www.awbank.net/IR.

This press release includes forward-looking statements, and AmericanWest Bancorporation intends for such statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements describe AmericanWest Bancorporation's expectations regarding future events, including the Bank's ability to comply with all requirements of the cease and desist order. Future events are difficult to predict and are subject to risk and uncertainty which could cause actual results to differ materially and adversely. Additional information regarding risks and uncertainties is included in AmericanWest Bancorporation's periodic filings on Forms 10-K and 10-Q with the Securities and Exchange Commission. AmericanWest Bancorporation undertakes no obligation to revise or amend any forward-looking statements to reflect subsequent events or circumstances.