InterWest posts significant quarterly loss
July 3, 2008 · Updated 5:10 PM
"For InterWest Bancorp, Inc., the ambitious housekeeping measures of the last quarter came with a price.InterWest recently announced a net loss of $6.1 million for the quarter ended June 30, 2000.It was a quarter that saw InterWest shake up its executive management, merge its subsidiaries, streamline its operations and become a commercial bank.The company said the quarterly losses were due to the expenses associated with severance agreements for top managers, asset write-downs, integration activities and the sale of securities. The total cost of all this was $10.8 million.During the quarter we made several decisions and completed necessary steps to begin implementing our strategy to become the most highly regarded commercial bank in the Pacific Northwest, said InterWest president Patrick M. Fahey.Heres some of the key events at InterWest in recent months: Change in executive management. On April 17, Fahey was appointed president and chief executive of InterWest Bancorp and chairman, president and CEO of InterWest Bank. Additionally, four new executive vice presidents with commercial banking experience were appointed. Other company executives stepped aside, such as former president and CEO Steve Walden. Stock repurchasing. InterWest repurchased 486,000 shares, or 3 percent of total shares outstanding, at a total price of $7.9 million. Charter conversion. InterWest Bank switched from being a Washington state savings bank to a Washington state commercial bank June 30. Merging of bank subsidiaries. InterWest Bank, Pacific Northwest Bank and Bank of Tukwila were all merged into a single commercial bank July 1. Change in the fiscal year. InterWest Bancorp changed its fiscal year end from Sept. 30 to Dec. 1. Integration activities.InterWest invested in streamlining operations throughout the entire company, reducing six different data operating systems to one.Activities to convert operating systems and consolidate the subsidiary banks have up-front costs, Fahey said. However, we believe the results will improve operating efficiencies and overall financial performance.In less than 50 years, InterWest has grown from its humble beginnings as Island Savings and Loan in Oak Harbor to become a regional banking network with 55 branches and more than $2.8 billion in consolidated assets. The company employs about 200 people locally.The expenses that added to the recent quarterly loss at InterWest included $3.2 million paid out in severance agreements, $3.2 million invested on the companys new operating system, and $2.1 million spent on real estate write-downs.While InterWest posted an overall loss for the quarter ended June 30, net income for the quarter was a healthy $7.3 million. The company declared dividends of 14 cents a share, which was consistent with the seven previous quarters."