EXHIBIT 99.1
UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
INDEPENDENT AUDITOR'S REPORT
and
FINANCIAL STATEMENTS
DECEMBER 31, 2000, 1999 AND 1998
CONTENTS
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PAGE
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4-6
SUPPLEMENTAL SCHEDULE
Schedule of assets held for investment purposes at end of year 7
INDEPENDENT AUDITOR'S REPORT
To the Board of Trustees
United Security Bancorporation
Profit Sharing 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of the United Security Bancorporation Profit Sharing 401(k) Plan as of December
31, 2000 and 1999, and the related statement of changes in net assets available
for benefits for each of the three years in the period ended December 31, 2000.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2000 and 1999, and the changes in net assets available for benefits
for each of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Moss Adams LLP
Everett, Washington
July 26, 2001
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UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31,
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2000 1999
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ASSETS
Investments, at fair value
Mutual funds $1,816,650
Common stocks $1,540,155
U.S. Treasury bonds 344,301
Money market fund 58,290
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1,816,650 1,942,746
---------- ----------
Receivables
Dividends and interest 9,638
Participants' contributions 29,034 9,682
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29,034 19,320
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Cash 1,903
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Total assets 1,845,684 1,963,969
LIABILITIES
Accounts payable 203
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NET ASSETS AVAILABLE FOR BENEFITS $1,845,684 $1,963,766
========== ==========
See accompanying notes.
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EXHIBIT 99.1
UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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YEAR ENDED
DECEMBER 31,
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2000 1999 1998
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ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net (depreciation) appreciation in fair value
of investments $ (85,095) $ (48,445) $ 42,427
Interest and dividends 24,343 52,674 20,524
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(60,752) 4,229 62,951
Less investment expenses (17,526) (25,200) (13,058)
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(78,278) (20,971) 49,893
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Contributions
Participants' 305,712 238,086 842,554
Rollovers from qualified plan 984 207,735
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306,696 445,821 842,554
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Totals additions 228,418 424,850 892,447
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO
Benefits paid to participants 346,500 421,026 76,115
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INCREASE (DECREASE) IN NET ASSETS (118,082) 3,824 816,332
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,963,766 1,959,942 1,143,650
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End of year $1,845,684 $1,963,766 $1,959,982
========== ========== ==========
See accompanying notes.
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UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 1 - Description of the Plan
The following description of the United Security Bancorporation Profit
Sharing 401(k) Plan (Plan) provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions. During March 2001, United
Security Bancorporation changed its name to AmericanWest Bancorporation
(Note 6).
General - The Plan is a defined contribution plan sponsored and
administered by an outside third party. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan has two features: a profit sharing feature and a
salary deferral feature, commonly known as a 401(k) plan.
Participation and vesting - The Plan generally covers all full-time
employees of United Security Bancorporation (Bancorporation) who have
completed 1,000 hours of service and who have attained at least 18
years of age. Participants gain 20% vesting of the profit sharing each
year after two completed years of service, and become 100% vested after
six years of service. All 401(k) employee contributions are immediately
100% vested.
Contributions - Profit sharing contributions are made from
Bancorporation profits at the discretion of the Bancorporation. The
401(k) feature of the Plan allows participants to make contributions,
through salary reduction, of 1% to 15% of their gross pay. No
Bancorporation contributions were made during 2000, 1999 or 1998.
Participant accounts - Each participant's account is credited with the
participant's contribution and an allocation of (a) the
Bancorporation's contribution, (b) Plan earnings, and (c) forfeitures
of terminated participants' nonvested accounts. Allocations are based
on participant earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided
from the participant's vested account.
Payment of benefits - Participants entitled to distributions due to
retirement, death, disability, or termination of employment have the
option of receiving a lump-sum payment or periodic payments which meet
the requirements of the Internal Revenue Code.
Plan termination - Although it has not expressed any intent to do so,
the Bancorporation has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants
will become fully vested in their accounts.
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UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 2 - Summary of Significant Accounting Policies
Basis of accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
Investment valuation and income recognition - The Plan's investments
are stated at fair value based on quoted market prices. Mutual funds
are valued at the net asset value of shares held by the plan at year
end.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Payments of benefits - Benefits are recorded when paid.
Use of estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and changes
therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
Risks and uncertainties - The Plan provides for various investment
options in combinations of mutual funds and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible
that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the
statement of net assets available for benefits and the statement of
changes in net assets available for benefits.
Note 3 - Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated January 10, 1997 that the Plan and related trust are
designed in accordance with the applicable requirements of the Internal
Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan's
tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the Internal
Revenue Code.
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UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 4 - Investments
Individual investments that represent 5% or more of net assets
available for benefits are as follows:
2000 1999
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AIM Balance Fund A $ 112,282
AIM Basic Value Fund A $ 185,988
American Funds New Economy Fund A $ 240,479
American Funds Europacific Growth Fund A $ 242,151
AIM Blue Chip Fund A $ 273,242
AIM Aggressive Growth Fund A $ 315,512
AmericanWest Bancorporation common stock $ 495,863
During 2000, 1999 and 1998, the Plan's investments (including gains and
losses on investment bought and sold, as well as held during the year)
(depreciated) appreciated in value by $(85,095), $(48,448) and $42,427,
respectively, as follows:
YEARS ENDED DECEMBER 31,
--------------------------------------
2000 1999 1998
---------- ---------- ----------
Mutual funds $ (42,612)
Common stocks (42,483) $ (24,554) $ 34,832
U.S. Treasury bonds (23,891) 7,595
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$ (85,095) $ (48,445) $ 42,427
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Note 5 - Related Party Transactions
During 2000, 1999 and 1998, the Bancorporation paid and provided
certain administrative and accounting fees on behalf of the Plan.
Note 6 - Subsequent Events
As of March 2, 2001, United Security Bancorporation has changed their
name to AmericanWest Bancorporation. The Plan name as adopted by the
employer is United Security Bancorporation 401(k) Plan; the
Bancorporation is in the process of changing the legal name of the plan
to reflect the recent name change to AmericanWest Bancorporation.
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SUPPLEMENTAL SCHEDULE
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UNITED SECURITY BANCORPORATION
PROFIT SHARING 401(k) PLAN
E.I.N. 91-1259511, PLAN NUMBER 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
END OF YEAR
DECEMBER 31, 2000
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(c)
DESCRIPTION OF
INVESTMENT
INCLUDING
MATURITY
DATE, RATE
(b) OF INTEREST,
IDENTITY OF ISSUER, COLLATERAL, (e)
BORROWER LESSOR, PAR OR (d) CURRENT
(a) OR SIMILAR PARTY MATURITY VALUE COST VALUE
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AIM Cash Reserve Shares Money Market Fund $ 378,426
AIM Aggressive Growth
Fund A Mutual fund 315,512
AIM Balance Fund A Mutual fund 112,282
AIM Basic Value Fund A Mutual fund 185,988
AIM Blue Chin Fund A Mutual fund 273,242
American Fund New
Economy Fund A Mutual fund 240,479
American Fund Europacific
Growth Fund A Mutual fund 242,151
American Fund Bond
Fund A Mutual fund 20,769
* AmericanWest
Bancorporation Common stock 47,801
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(formerly United
Security Bancorporation)
$ 1,816.650
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* A party in interest as defined by ERISA
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