Western Alliance Bancorporation

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Western Alliance Reports Third Quarter 2013 Net Income of $28.2 Million, or $0.32 Per Share

PHOENIX--(BUSINESS WIRE)-- Western Alliance Bancorporation (NYSE:WAL) announced today its financial results for the third quarter 2013.

Third Quarter 2013 Highlights:

  • Net income of $28.2 million, compared to $34.0 million for the second quarter 2013 (which included the $10.0 million bargain purchase gain from the acquisition of Centennial Bank in addition to other non-recurring items) and $15.5 million for the third quarter 2012
  • Earnings per share of $0.32, compared to $0.39 per share in the second quarter 2013 (which included the effects of the Centennial Bank bargain purchase gain and other non-recurring items) and $0.18 per share in the third quarter 2012
  • Pre-tax, pre-provision operating earnings of $42.1 million, up 4.9% from $40.1 million in second quarter 2013 and up 25.9% from $33.4 million in third quarter 20121
  • Net interest margin of 4.41%, compared to 4.36% in the second quarter 2013 and 4.41% in the third quarter 2012
  • Total loans of $6.52 billion, up $104 million from June 30, 2013 and up $1.18 billion from September 30, 2012
  • Total deposits of $7.28 billion, up $274 million from June 30, 2013 and up $1.11 billion from September 30, 2012
  • Nonperforming assets (nonaccrual loans and repossessed assets) decreased to 1.7% of total assets from 1.9% in the second quarter 2013 and from 2.7% in the third quarter 2012
  • Net loan recoveries (annualized) to average loans outstanding of 0.10%, compared to net loan charge-offs to average loans of 0.17% in the second quarter 2013 and 0.70% in the third quarter 2012
  • Tier I Leverage capital of 10.0% and Total Risk-Based Capital ratio of 12.5%, compared to 9.7% and 12.3%, respectively, a year ago
  • Total equity of $826 million, up $128 million from September 30, 2012

Financial Performance

“Once again, Western Alliance delivered strong financial performance with key metrics relating to growth, margin, efficiency and asset quality all improving during the third quarter, resulting in record revenue and operating earnings,” said Robert Sarver, Chairman and Chief Executive Officer of Western Alliance Bancorporation. “Net interest income increased 17% from a year ago, while expense growth was held to 10%. Our asset quality improvement has been notable as net loan losses swung from a $9 million charge in the third quarter of 2012 to net recoveries of $1.5 million this quarter.”

Sarver continued, “As our performance has improved, we’re also resolved to maintain a strong risk discipline. During the third quarter, we successfully completed the conversion of Centennial Bank to our systems, giving us more real-time oversight of its operations. Pending regulatory approval, we also anticipate integrating our three subsidiary banks into one charter at the end of the year, which will enable us to further enhance our risk management architecture.”

Western Alliance Bancorporation reported net income of $28.2 million, or $0.32 per share, in the third quarter 2013, compared to $15.5 million, or $0.18 per share, one year ago. Key drivers of performance improvement include sustained organic balance sheet growth, prudent expense management, and reduced legacy asset costs against the backdrop of improved economic conditions.

Total loans increased $104 million to $6.52 billion at September 30, 2013 from $6.41 billion at June 30, 2013. Loans increased $1.18 billion, or 22.2%, from September 30, 2012. The increase over the past year was primarily driven by the Western Liberty Bancorp and Centennial Bank acquisitions, as well as organic growth in commercial and industrial, commercial real estate, and construction and land development loans.

Total deposits increased $274 million to $7.28 billion at September 30, 2013 from $7.00 billion at June 30, 2013. Deposits increased $1.11 billion from September 30, 2012. The increases in each of these periods were primarily due to growth in time certificates and savings and money market deposits.

Income Statement

Net interest income was $84.6 million in the third quarter 2013, an increase of $2.4 million, or 2.9%, from $82.2 million in the second quarter of 2013 and an increase of $12.7 million, or 17.5%, compared to the third quarter 2012. The Company’s net interest margin increased in the third quarter 2013 to 4.41%, compared to 4.36% in the second quarter 2013. It was 4.41% in the third quarter 2012.

Operating non-interest income was $5.8 million for the third quarter 2013, up from $5.0 million in the second quarter of 2013 and $5.4 million for the third quarter of 2012.1

Net operating revenue was $90.4 million for the third quarter 2013, up from $87.2 million for the second quarter of 2013 and an increase of 17.0% from $77.3 million for the third quarter 2012.1

Operating non-interest expense was $48.3 million for the third quarter 2013, compared to $47.0 million for the second quarter of 2013 and $43.9 million for the third quarter of 2012.1 The Company’s operating efficiency ratio1 on a tax equivalent basis was 51.6% for the third quarter 2013, an improvement from 52.2% for the second quarter 2013 and 54.9% for the third quarter 2012 as the growth rate in revenue continued to outpace that of expense.

The Company had 1,023 full-time equivalent employees and 42 offices at September 30, 2013, compared to 964 employees and 39 offices one year ago.

The Company views its pre-tax, pre-provision operating earnings as a key metric for assessing the Company’s earning power, which it defines as net operating revenue less operating non-interest expense. For the third quarter 2013, the Company’s pre-tax, pre-provision operating earnings were $42.1 million, up from $40.1 million in the second quarter 2013 and up 25.9% from $33.4 million in the third quarter 2012.

There was no provision for credit losses for the third quarter 2013, compared to $3.5 million for the second quarter 2013. The provision for the third quarter of 2012 was $8.9 million. Net loan recoveries in the third quarter 2013 were $1.5 million, or 0.10% of average loans (annualized), compared to 0.17% of net loan charge-offs to average loans (annualized) for the second quarter 2013. Net charge-offs for the third quarter 2012 were $9.0 million or 0.70% of average loans (annualized).

Nonaccrual loans decreased $6.3 million to $76.6 million during the quarter. Loans past due 90 days and still accruing interest totaled $5.5 million at September 30, 2013, compared to $3.9 million at June 30, 2013 and $1.7 million at September 30, 2012. Loans past due 30-89 days, still accruing interest totaled $8.7 million at quarter end, up from $7.3 million at June 30, 2013 and down from $10.2 million at September 30, 2012.

As the Company’s asset quality improved and its capital increased, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, improved to 31% at September 30, 2013 from 39% at September 30, 2012.1

Net loss on sales and valuation of repossessed assets (primarily other real estate) was $0.4 million for the third quarter 2013, compared to a $1.1 million net gain in the second quarter 2013 and a $0.1 million loss in the third quarter 2012. At September 30, 2013 and June 30, 2013, other repossessed assets totaled $77 million, compared to $78 million one year ago.

Balance Sheet

Gross loans totaled $6.52 billion at September 30, 2013, an increase of $104 million from June 30, 2013 and an increase of $1.18 billion from $5.33 billion at September 30, 2012. At September 30, 2013 and June 30, 2013, the allowance for credit losses was 1.50% of total loans, compared to 1.83% at September 30, 2012, reflecting an improvement in the Company’s asset quality.

Deposits totaled $7.28 billion at September 30, 2013, an increase of $274 million from $7.00 billion at June 30, 2013 and an increase of $1.11 billion from $6.16 billion at September 30, 2012. Non-interest bearing deposits were $1.97 billion at September 30, 2013, compared to $1.92 billion at June 30, 2013 and $1.84 billion at September 30, 2012. Non-interest bearing deposits comprised 27.1% of total deposits at September 30, 2013, compared to 29.9% a year ago, while the proportion of savings and money market accounts increased to 41.9% from 41.2% during the same period. Certificates of deposit as a percent of total deposits were 21.7% at September 30, 2013. The Company’s ratio of loans to deposits was 89.6% at September 30, 2013 compared to 91.2% at June 30, 2013 and 86.5% at September 30, 2012.

Stockholders’ equity at September 30, 2013 increased to $826 million from $800 million at June 30, 2013. At September 30, 2013, tangible common equity was 7.4% of tangible assets1 and total risk-based capital was 12.5% of risk-weighted assets. The Company’s tangible book value per share1 was $7.57 at September 30, 2013, up 19.2% during the past year.

Total assets increased to $8.92 billion at September 30, 2013 from $8.59 billion at June 30, 2013, and increased 20.5% from $7.40 billion at September 30, 2012.

Operating Unit Highlights

Western Alliance Bank (doing business as Alliance Bank of Arizona and First Independent Bank in Nevada) reported loan growth of $135 million during the third quarter 2013 and $718 million during the last 12 months to $2.59 billion. Third quarter loan growth came primarily from commercial and industrial, commercial real estate and construction and land development loans. Deposits increased $183 million in the third quarter and $681 million during the last 12 months to $2.83 billion. Net income for Western Alliance Bank was $9.8 million during the third quarter 2013 compared with net income of $20.5 million during the second quarter of 2013 (which includes a bargain purchase gain of $10.0 million from the acquisition of Centennial Bank) and net income of $8.8 million during the third quarter 2012.

Bank of Nevada, which was the recipient of net affiliate loan sales and participations, reported that loans decreased by $29 million during the third quarter of 2013 and increased $326 million during the last 12 months to $2.39 billion at September 30, 2013. The decline in third quarter loans came primarily from a decrease in commercial leases, construction and land development and residential real estate loans. Deposits decreased by $6 million in the third quarter of 2013 and increased $205 million over the last twelve months to $2.61 billion. Net income for Bank of Nevada was $16.3 million for the third quarter 2013, compared with net income of $12.7 million for the second quarter of 2013 and net income of $5.8 million during the third quarter 2012.

The Torrey Pines Bank segment, which excludes the discontinued operations of PartnersFirst, reported that loans increased $2 million during the third quarter 2013 and increased $94 million during the last 12 months to $1.52 billion. The slight third quarter increase in the loan balances were primarily attributable to an increase in construction and land development loans, which were largely offset by a decrease in commercial real estate and commercial and industrial loans. Deposits increased $95 million in the third quarter 2013 and $231 million over the last 12 months to $1.84 billion. Net income for Torrey Pines Bank was $4.6 million during the third quarter 2013, compared with net income of $5.8 million for the second quarter of 2013 and net income of $6.4 million during the third quarter 2012.

Attached to this press release is summarized financial information for the quarter ended September 30, 2013.

Subsequent Event

On October 1, 2013, the Company completed the sale of certain receivables related to its discontinued affinity credit card business, PartnersFirst. These receivables were classified as loans held for sale and totaled $25.4 million as of September 30, 2013.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its third quarter 2013 financial results at 12:00 p.m. ET on Friday, October 18, 2013. Participants may access the call by dialing 1-888-317-6003 and using passcode: 9765434 or via live audio webcast using the website link: https://services.choruscall.com/links/wal131018.html. The webcast is also available via the Company’s website at www.westernalliancebancorp.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 2:00 p.m. ET October 18th through November 1st at 9:00 a.m. ET by dialing 1-877-344-7529 passcode: 10034832.

About Western Alliance Bancorporation

Western Alliance Bancorporation is the parent company of Bank of Nevada, Western Alliance Bank doing business as Alliance Bank of Arizona and First Independent Bank, and Torrey Pines Bank. These organizations provide a broad array of deposit and credit services to clients in Nevada, Arizona and California. Staffed with experienced financial professionals, these organizations deliver a broader product array and larger credit capacity than community banks, yet are empowered to be more responsive to customers' needs than larger institutions. Additional investor information can be accessed on the Investor Relations page of the Company's website, www.westernalliancebancorp.com.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding guidance or expectations relating to balance sheet growth, interest margin, operating efficiency, asset quality, and regulatory capital. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include, among others: factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.

Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.

This press release contains both financial measures based on accounting principles generally accepted in the United States (“GAAP”) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Western Alliance Bancorporation’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

1 See Reconciliation of Non-GAAP Financial Measures beginning on page 16

                                   
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
 
At or for the Three Months For the Nine Months
Ended September 30, Ended September 30,
2013 2012 Change % 2013 2012 Change %
 
Selected Balance Sheet Data:
(dollars in millions)
Total assets $ 8,921.4 $ 7,403.6

20.5

%

 

Loans, net of deferred fees 6,516.3 5,332.9 22.2
Securities and money market investments 1,370.8 1,338.9 2.4
Securities purchased under agreement to resell 128.1 139.8 (8.4 )
Total deposits 7,275.3 6,162.0 18.1
Borrowings 394.1 223.6 76.3
Junior subordinated debt 39.4 36.2 8.8
Stockholders' equity 826.3 698.0 18.4
 
Selected Income Statement Data:
(dollars in thousands)
Interest income $ 92,680 $ 78,669

17.8

%

 

$ 265,073 $ 233,952

13.3

%

Interest expense   8,121     6,723   20.8   22,159     21,144   4.8
Net interest income 84,559 71,946 17.5 242,914 212,808 14.1
Provision for loan losses   -     8,932   (100.0 )   8,920     35,343   (74.8 )
Net interest income after provision for credit losses 84,559 63,014 34.2 233,994 177,465 31.9
Non-interest income 2,625 6,982 (62.4 ) 17,386 20,263 (14.2 )
Non-interest expense   49,675     47,543   4.5   145,135     139,871   3.8
Income from continuing operations, before income tax expense 37,509 22,453 67.1 106,245 57,857 83.6
Income tax expense   9,288     6,752   37.6   22,913     16,452   39.3
Income from continuing operations 28,221 15,701 79.7 83,332 41,405 101.3
Loss on discontinued operations, net   (29 )   (243 ) 88.1   (160 )   (686 ) (76.7 )
Net income $ 28,192   $ 15,458  

82.4

%

 

$ 83,172   $ 40,719  

104.3

%

Diluted net income per common share from continuing operations $ 0.32   $ 0.19  

71.0

%

 

$ 0.95   $ 0.46  

105.6

%

Diluted net loss per common share from discontinued operations, net of tax

$ -   $ (0.01 ) $ -   $ (0.01 )
Diluted net income per common share $ 0.32   $ 0.18  

77.8

%

 

$ 0.95   $ 0.45  

109.4

%

 
Common Share Data:
Diluted net income per common share $ 0.32 $ 0.18

77.8

%

 

$ 0.95 $ 0.45

109.4

%

Book value per common share $ 7.87 $ 6.67

18.0

%

 

Tangible book value per share, net of tax (1)

$ 7.57 $ 6.35

19.1

%

 

Average shares outstanding (in thousands):
Basic 85,799 81,712 5.0 85,596 81,555 5.0
Diluted 86,769 82,254 5.5 86,428 82,000 5.4
Common shares outstanding 87,099 83,455 4.4
 
(1) See Reconciliation of Non-GAAP Financial Measures
 
 

                                   
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data (continued)
Unaudited
 
At or for the Three Months For the Nine Months
Ended September 30, Ended September 30,
2013 2012 Change % 2013 2012 Change %
(in thousands, except per share data)
Selected Performance Ratios:

Return on average assets (1)

1.30

%

 

0.85

%

 

52.9

%

 

2.03

%

 

0.77

%

 

163.6

%

Return on tangible common equity (2)

17.06 11.65 46.4 25.52 15.55 64.1

Net interest margin (1)

4.41 4.41 0.0 4.38 4.47 (2.0 )
Net interest spread 4.25 4.24 0.2 4.22 4.29 (1.6 )

Efficiency ratio - tax equivalent basis (2)

51.56 54.87 (6.0 )
Loan to deposit ratio 89.57 86.54 3.5
 
Capital Ratios:

Tangible equity (2)

9.0

%

 

9.1

%

 

(1.0

)%

 

Tangible common equity (2)

7.4 7.2 3.2

Tier 1 common equity (2)

8.8 8.1 8.2

Tier 1 Leverage ratio (3)

10.0 9.7 2.6

Tier 1 Risk Based Capital (3)

11.2 11.0 2.1

Total Risk Based Capital (3)

12.5 12.3 1.4
 
Asset Quality Ratios:

Net charge-offs to average loans outstanding (1)

(0.10

)%

 

0.70

%

 

(114.3

)%

 

0.04

%

 

0.99

%

 

(96.0

)%

Nonaccrual loans to gross loans 1.20 2.27 (47.1 )
Nonaccrual loans and repossessed assets to total assets 1.72 2.69 (36.1 )
Loans past due 90 days and still accruing to total loans 0.08 0.03 166.7
Allowance for credit losses to loans 1.50 1.83 (18.0 )
Allowance for credit losses to nonaccrual loans 127.67 80.35 58.9
 
(1) Annualized for the three and nine month periods ended September 30, 2013 and 2012.
(2) See Reconciliation of Non-GAAP Financial Measures.
(3) Capital ratios are preliminary until Call Reports are filed.
 
 

                       
Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Income Statements

Unaudited

 

 

Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012

(dollars in thousands)

Interest income:

 

Loans $ 83,994 $ 69,580 $ 239,812 $ 205,682
Investment securities 8,286 9,034 24,266 28,008
Federal funds sold and other   400     55     995     262  
Total interest income   92,680     78,669     265,073     233,952  
Interest expense:
Deposits 4,232 3,974 11,893 12,904
Borrowings 3,429 2,262 8,885 6,782
Junior subordinated debt   460     487     1,381     1,458  
Total interest expense   8,121     6,723     22,159     21,144  
Net interest income 84,559 71,946 242,914 212,808
Provision for credit losses   -     8,932     8,920     35,343  
Net interest income after provision for credit losses   84,559     63,014     233,994     177,465  
Non-interest income
Service charges 2,425 2,412 7,408 7,014
Bank owned life insurance 1,832 1,116 3,904 3,359
Amortization of affordable housing investments (1,504 ) (651 ) (3,304 ) (710 )
(Losses) Gains on sales of investment securities, net (1,679 ) 1,031 (1,537 ) 2,502
Unrealized (losses) gains on assets/liabilities measured at fair value, net (7 ) 470 (3,768 ) 701
Bargain purchase gain from acquisition - - 10,044 -
Other   1,558     2,604     4,639     7,397  
Total non-interest income   2,625     6,982     17,386     20,263  
Non-interest expenses:
Salaries and employee benefits 28,689 25,500 83,363 78,159
Occupancy 4,901 4,655 14,500 14,046
Legal, professional and directors' fees 3,006 2,291 8,017 6,380
Insurance 1,884 2,121 6,350 6,323
Data Processing 1,872 1,390 5,912 3,678
Marketing 1,599 1,231 4,970 4,061
Loan and repossessed asset expenses 1,136 1,236 3,453 4,573
Customer service 677 653 2,037 1,926
Net loss (gain) on sales and valuations of repossessed assets 371 126 (234 ) 3,678
Intangible amortization 597 880 1,791 2,660
Merger / restructure expense 1,018 113 3,833 113
Goodwill and intangible impairment - 3,435 - 3,435
Other   3,925     3,912     11,143     10,839  
Total non-interest expense   49,675     47,543     145,135     139,871  
Income from continuing operations before income taxes 37,509 22,453 106,245 57,857
Income tax expense   9,288     6,752     22,913     16,452  
Income from continuing operations 28,221 15,701 83,332 41,405
Loss from discontinued operations net of tax benefit   (29 )   (243 )   (160 )   (686 )
Net income 28,192 15,458 83,172 40,719
Preferred stock dividends   353     352     1,059     3,440  
Net income available to common stockholders $ 27,839   $ 15,106   $ 82,113   $ 37,279  
Diluted net income per share $ 0.32   $ 0.18   $ 0.95   $ 0.45  
 
 

                             
Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Income Statements

Unaudited

 

 

Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2013 2013 2013 2012 2012

 

(in thousands, except per share data)

Interest income:

Loans $ 83,994 $ 81,093 $ 74,725 $ 75,303 $ 69,580
Investment securities 8,286 7,822 8,158 8,794 9,034
Federal funds sold and other   400     370     225     246     55  

Total interest income

  92,680     89,285     83,108     84,343     78,669  
Interest expense:
Deposits 4,232 3,929 3,732 3,890 3,974
Borrowings 3,429 2,749 2,707 2,528 2,262
Junior subordinated debt   460     455     466     470     487  
Total interest expense   8,121     7,133     6,905     6,888     6,723  
Net interest income 84,559 82,152 76,203 77,455 71,946
Provision for credit losses   -     3,481     5,439     11,501     8,932  
Net interest income after provision for credit losses   84,559     78,671     70,764     65,954     63,014  
Non-interest income
Service charges 2,425 2,449 2,534 2,438 2,412
Bank owned life insurance 1,832 1,036 1,036 1,080 1,116
Amortization of affordable housing investments (1,504 ) (900 ) (900 ) (1,069 ) (651 )
(Losses) Gains on sales of investment securities, net (1,679 ) (5 ) 147 1,447 1,031
Unrealized (losses) gains on assets/liabilities measured at fair value, net (7 ) (3,290 ) (471 ) (48 ) 470
Bargain purchase gain from acquisition - 10,044 - 17,562 -
Other   1,558     1,528     1,553     3,053     2,604  
Total non-interest income   2,625     10,862     3,899     24,463     6,982  
Non-interest expenses:
Salaries and employee benefits 28,689 28,100 26,574 26,885 25,500
Occupancy 4,901 4,753 4,846 4,769 4,655
Legal, professional and directors' fees 3,006 2,227 2,784 1,849 2,291
Insurance 1,884 2,096 2,370 2,188 2,121
Data Processing 1,872 2,175 1,865 2,071 1,390
Marketing 1,599 1,607 1,764 1,546 1,231
Loan and repossessed asset expenses 1,136 721 1,596 2,102 1,236
Customer service 677 717 643 678 653
Net loss (gain) on sales and valuations of repossessed assets 371 (1,124 ) 519 529 126
Intangible amortization 597 597 597 596 880
Merger / restructure expense 1,018 2,620 195 2,706 113
Goodwill and intangible impairment - - - - 3,435
Other   3,925     4,042     3,176     3,070     3,912  
Total non-interest expense   49,675     48,531     46,929     48,989     47,543  
Income from continuing operations before income taxes 37,509 41,002 27,734 41,428 22,453
Income tax expense   9,288     6,817     6,808     7,509     6,752  
Income from continuing operations $ 28,221 $ 34,185 $ 20,926 $ 33,919 $ 15,701
(Loss) Income from discontinued operations, net of tax   (29 )   (169 )   38     (1,804 )   (243 )
Net income $ 28,192   $ 34,016   $ 20,964   $ 32,115   $ 15,458  
Preferred stock dividends   353     353     353     353     352  
Net Income available to common stockholders $ 27,839   $ 33,663   $ 20,611   $ 31,762   $ 15,106  
Diluted net income per share $ 0.32   $ 0.39   $ 0.24   $ 0.37   $ 0.18  
 
 

                           
Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Balance Sheets
Unaudited
 
September 30, June 30, March 31, December 31, September 30,
2013 2013 2012 2012 2012

(in millions)

Assets:

 

Cash and due from banks $ 380.9 $ 248.9 $ 422.3 $ 204.6 $ 168.1
Securities purchased under agreement to resell   128.1     134.0     134.0     -     139.8  
Cash and cash equivalents 509.0 382.9 556.3 204.6

 

307.9
 
Securities and money market investments 1,370.8 1,313.1 1,302.4 1,236.6 1,338.9
Loans held for sale 25.4 27.6 27.9 31.1 -
Loans held for investment
Commercial 2,234.9 2,174.1 2,084.9 1,947.8 1,756.0
Commercial real estate - non-owner occupied 1,864.3 1,839.7 1,538.4 1,505.6 1,407.1
Commercial real estate - owner occupied 1,551.2 1,550.0 1,414.3 1,396.8 1,331.3
Construction and land development 459.8 416.7 381.1 394.3 379.8
Residential real estate 359.0 381.7 388.7 407.9 408.4
Consumer 29.8 28.5 26.0 31.8 56.6
Deferred fees, net   (8.1 )   (6.8 )   (6.0 )   (6.0 )   (6.3 )
Gross loans and deferred fees, net 6,490.9 6,383.9 5,827.4 5,678.2 5,332.9
Allowance for credit losses   (97.9 )   (96.3 )   (95.5 )   (95.4 )   (97.4 )
Loans, net   6,393.0     6,287.6     5,731.9     5,582.8     5,235.5  
 
Premises and equipment, net 105.9 106.1 107.1 107.9 106.9
Other repossessed assets 76.5 76.5 77.9 77.2 78.2
Bank owned life insurance 139.7 140.4 139.4 138.3 137.3
Goodwill and other intangibles 27.9 28.5 29.2 29.8 29.0
Other assets   273.2     231.0     202.0     214.3     169.9  
Total assets $ 8,921.4   $ 8,593.7   $ 8,174.1   $ 7,622.6   $ 7,403.6  
 
Liabilities and Stockholders' Equity:
Liabilities:
Deposits:
Non-interest bearing demand deposits $ 1,972.5 $ 1,919.6 $ 1,930.4 $ 1,933.2 $ 1,840.8
Interest bearing
Demand 673.7 631.3 619.7 582.3 514.7
Savings and money market 3,050.0 2,945.1 2,826.7 2,573.5 2,541.2
Time certificates   1,579.1     1,505.3     1,358.1     1,366.2     1,265.3  
Total deposits 7,275.3 7,001.3 6,734.9 6,455.2 6,162.0
Customer repurchase agreements   55.5     51.9     64.7     79.0     73.1  
Total customer funds 7,330.8 7,053.2 6,799.6 6,534.2 6,235.1
Securities sold short 126.6 129.5 132.6 - 138.3
Borrowings 394.1 418.6 293.8 193.7 223.6
Junior subordinated debt 39.4 39.9 36.7 36.2 36.2
Accrued interest payable and other liabilities   204.2     153.0     130.1     98.9     72.4  
Total liabilities   8,095.1     7,794.2     7,392.8     6,863.0     6,705.6  
Stockholders' Equity
Common stock and additional paid-in capital 792.2 789.5 786.9 784.9 751.1
Preferred Stock 141.0 141.0 141.0 141.0 141.0
Accumulated deficit (92.4 ) (120.2 ) (153.8 ) (174.5 ) (206.2 )
Accumulated other comprehensive (loss) income   (14.5 )   (10.8 )   7.2     8.2     12.1  
Total stockholders' equity   826.3     799.5     781.3     759.6     698.0  
Total liabilities and stockholders' equity $ 8,921.4   $ 8,593.7   $ 8,174.1   $ 7,622.6   $ 7,403.6  
 
 

                             
Western Alliance Bancorporation and Subsidiaries
Changes in the Allowance For Credit Losses
Unaudited
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2013 2013 2013 2012 2012
(in thousands)
 
Balance, beginning of period $ 96,323 $ 95,494 $ 95,427 $ 97,410 $ 97,512
Provision for credit losses - 3,481 5,439 11,501 8,932
Recoveries of loans previously charged-off:
Commercial and industrial 2,242 1,757 441 372 501
Commercial real estate - non-owner occupied 273 154 440 288 27
Commercial real estate - owner occupied 149 479 502 109 606
Construction and land development 966 120 701 2,033 567
Residential real estate 430 549 569 313 153
Consumer   15     11     14     63     38  
Total recoveries 4,075 3,070 2,667 3,178 1,892
Loans charged-off:
Commercial and industrial 544 1,065 1,770 4,654 4,100
Commercial real estate - non-owner occupied 466 1,000 1,908 2,673 998
Commercial real estate - owner occupied 399 1,391 979 4,470 472
Construction and land development - 238 614 405 2,315
Residential real estate 1,138 2,010 2,493 1,307 2,242
Consumer   -     18     275     3,153     799  

Total loans charged-off

2,547 5,722 8,039 16,662 10,926
Net loan (recoveries) charge-offs   (1,528 )   2,652     5,372     13,484     9,034  
Balance, end of period $ 97,851   $ 96,323   $ 95,494   $ 95,427   $ 97,410  
 
Net charge-offs (recoveries) to average loans outstanding - annualized

(0.10

)%

 

0.17 % 0.38 % 0.99 % 0.70 %
Allowance for credit losses to gross loans 1.50 1.50 1.63 1.67 1.83
Nonaccrual loans $ 76,641 $ 82,899 $ 93,748 $ 104,716 $ 121,238
Repossessed assets 76,475 76,499 77,921 77,247 78,234
Loans past due 90 days, still accruing 5,456 3,893 1,640 1,388 1,710
Loans past due 30 to 89 days, still accruing 8,689 7,341 14,795 16,565 10,181
Classified loans on accrual 144,041 140,192 97,351 112,637 116,841
Special mention loans 137,247 162,482 125,660 103,550 97,681
 
 

                         
Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
 
Three Months Ended September 30,
2013 2012

Average

Balance

Interest

Average Yield/

Cost

Average

Balance

Interest

Average Yield/

Cost

 

($ in millions) ($ in thousands) ($ in millions) ($ in thousands)

Interest earning assets

Loans (1) $ 6,306.4 $ 83,994 5.44 % $ 5,191.2 $ 69,580 5.42 %
Investment securities (1) 1,303.4 8,286 3.01 % 1,372.4 9,034 3.17 %
Federal funds sold and other   364.6     400 0.44 %   195.4     55 0.11 %
Total interest earning assets 7,974.4 92,680 4.81 % 6,759.0 78,669 4.81 %
Non-interest earning assets
Cash and due from banks 145.0 120.1
Allowance for credit losses (98.2 ) (98.2 )
Bank owned life insurance 140.6 136.5
Other assets   466.9     356.6  
Total assets $ 8,628.6   $ 7,274.0  
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts $ 641.7 $ 376 0.23 % $ 510.5 $ 296 0.23 %
Savings and money market 2,828.1 2,172 0.31 % 2,414.2 1,990 0.33 %
Time certificates of deposit   1,675.5     1,685 0.40 %   1,286.5     1,688 0.52 %
Total interest-bearing deposits 5,145.3 4,232 0.33 % 4,211.2 3,974 0.38 %
Borrowings 574.8 3,429 2.39 % 455.6 2,262 1.99 %
Junior subordinated debt   39.9     460 4.61 %   36.7     487 5.31 %
Total interest-bearing liabilities 5,760.0 8,121 0.56 % 4,703.5 6,723 0.57 %
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 1,931.1 1,813.0
Other liabilities 114.7 70.7
Stockholders’ equity   822.8     686.8  
Total liabilities and stockholders' equity $ 8,628.6   $ 7,274.0  
Net interest income and margin $ 84,559 4.41 % $ 71,946 4.41 %
Net interest spread 4.25 % 4.24 %
 

(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $3,272 and $2,655 for the third quarter ended 2013 and 2012, respectively.

 

 

                   
Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
     
Nine Months Ended September 30,
2013 2012

Average

Balance

Interest

Average Yield/

Cost

Average

Balance

Interest

Average Yield/

Cost

 

($ in millions) ($ in thousands) ($ in millions) ($ in thousands)

Interest earning Assets

Loans (1) $ 6,008.4 $ 239,812 5.42 % $ 4,996.8 $ 205,682 5.53 %
Investment securities (1) 1,294.3 24,266 3.05 % 1,404.2 28,008 3.15 %
Federal funds sold & other   392.2     995 0.34 %   153.5     262 0.23 %
Total interest earnings assets 7,694.9 265,073 4.76 % 6,554.5 233,952 4.90 %
Non-interest earning assets
Cash and due from banks 130.3 115.7
Allowance for credit losses (97.2 ) (98.8 )
Bank owned life insurance 139.7 135.4
Other assets   440.6     353.7  
Total assets $ 8,308.3   $ 7,060.5  
Interest-bearing liabilities
Interest-bearing deposits:
Interest bearing transaction accounts $ 625.8 $ 1,047 0.22 % $ 511.0 $ 920 0.24 %
Savings and money market 2,740.0 6,090 0.30 % 2,314.9 6,114 0.35 %
Time certificates of deposits   1,570.5     4,756 0.40 %   1,343.7     5,870 0.58 %
Total interest-bearing deposits 4,936.3 11,893 0.32 % 4,169.6 12,904 0.42 %
Borrowings 526.0 8,885 2.25 % 392.3 6,782 2.31 %
Junior subordinated debt   37.6     1,381 4.90 %   37.0     1,458 5.26 %
Total interest-bearing liabilities $ 5,499.9 $ 22,159 0.54 % $ 4,598.9 $ 21,144 0.61 %
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 1,895.1 1,734.6
Other liabilities 110.8 56.1
Stockholders’ equity   802.5     670.9  
Total liabilities and stockholders' equity $ 8,308.3   $ 7,060.5  
Net interest income and margin $ 242,914 4.38 % $ 212,808 4.47 %
Net interest spread 4.22 % 4.29 %
 

(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $9,583 and $6,726 for the nine months September 30, 2013 and 2012, respectively.

 

 

                   
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results

Unaudited

     

 

Inter-
segment Consoli-
Western Bank Torrey elimi- dated
Alliance Bank of Nevada Pines Bank* Other nations Company

(dollars in millions)

At September 30, 2013

 

Assets $ 3,346.7 $ 3,288.1 $ 2,076.2 $ 1,127.8 $ (917.4 ) $ 8,921.4
Held for sale loans - - 25.4 - - 25.4
Gross loans and deferred fees, net 2,589.2 2,387.1 1,498.7 58.9 (43.0 ) 6,490.9
Less: Allowance for credit losses   (28.0 )   (51.0 )   (18.3 )   (0.6 )   -     (97.9 )
Loans, net   2,561.2     2,336.1     1,480.4     58.3     (43.0 )   6,393.0  
Goodwill and intangible assets 2.8 25.1 - - - 27.9
Deposits 2,832.0 2,613.5 1,844.7 - (14.9 ) 7,275.3
Borrowings 81.4 203.0 3.2 106.5 - 394.1
Stockholders' equity 291.5 373.7 171.8 844.7 (855.4 ) 826.3
 
 
No. of branches 18 12 12 - - 42
No. of FTE 294 392 228 109 - 1,023
 

(in thousands)

Three Months Ended September 30, 2013:

 

Net interest income (expense) $ 33,755 $ 31,888 $ 21,055 $ (2,139 ) $ - $ 84,559
Provision for (recovery of) credit losses   6,277     (6,918 )   2,387     (1,746 )   -     -  
Net interest income (expense) after
provision for credit losses 27,478 38,806 18,668 (393 ) - 84,559
Non-interest income 1,816 2,314 108 2,914 (4,527 ) 2,625
Non-interest expense   (15,520 )   (18,799 )   (11,949 )   (7,934 )   4,527     (49,675 )
Income (loss) from continuing
operations before income taxes 13,774 22,321 6,827 (5,413 ) - 37,509
Income tax expense (benefit)   3,977     6,027     2,230     (2,946 )   -     9,288  
Income (loss) from continuing operations 9,797 16,294 4,597 (2,467 ) - 28,221
Loss from discontinued operations, net   -     -     -     (29 )   -     (29 )
Net income (loss) $ 9,797   $ 16,294   $ 4,597   $ (2,496 ) $ -   $ 28,192  
 

(in thousands)

Nine Months Ended September 30, 2013:

 

Net interest income (expense) $ 92,920 $ 91,821 $ 62,435 $ (4,262 ) $ - $ 242,914
Provision for (recovery of) credit losses   9,921     (5,514 )   3,219     1,294     -     8,920  
Net interest income (expense) after
provision for credit losses 82,999 97,335 59,216 (5,556 ) - 233,994
Non-interest income 14,520 9,383 1,312 4,325 (12,154 ) 17,386
Non-interest expense   (45,688 )   (52,724 )   (35,876 )   (23,001 )   12,154     (145,135 )
Income (loss) from continuing
operations before income taxes 51,831 53,994 24,652 (24,232 ) - 106,245
Income tax expense (benefit)   13,066     14,292     7,898     (12,343 )   -     22,913  
Income (loss) from continuing operations 38,765 39,702 16,754 (11,889 ) - 83,332
Loss from discontinued operations, net   -     -     -     (160 )   -     (160 )
Net income (loss) $ 38,765   $ 39,702   $ 16,754   $ (12,049 ) $ -   $ 83,172  
 
* Excludes discontinued operations
 
 

                   
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results

Unaudited

     

 

Inter-
segment Consoli-
Western Bank Torrey elimi- dated
Alliance Bank of Nevada Pines Bank* Other nations Company

(dollars in millions)

At September 30, 2012

 

Assets $ 2,429.8 $ 2,918.0 $ 1,888.7 $ 961.3 $ (794.2 ) $ 7,403.6
Gross loans and deferred fees, net 1,871.4 2,061.0 1,430.6 12.8 (42.9 ) 5,332.9
Less: Allowance for credit losses   (20.4 )   (59.5 )   (17.5 )   -     -     (97.4 )
Loans, net   1,851.0     2,001.5     1,413.1     12.8     (42.9 )   5,235.5  
Goodwill and intangible assets - 23.2 - - - 23.2
Deposits 2,150.5 2,408.5 1,613.8 - (10.8 ) 6,162.0
Borrowings - 110.0 40.0 - 150.0
Stockholders' equity 217.3 339.1 168.4 702.3 (729.1 ) 698.0
 
 
No. of branches 16 11 12 - - 39
No. of FTE 241 388 234 101 - 964
 

(in thousands)

Three Months Ended September 30, 2012:

 

Net interest income (expense) $ 24,449 $ 27,717 $ 21,795 $ (2,015 ) $ - $ 71,946
Provision for credit losses   1,112     6,618     1,202     -     -     8,932  
Net interest income (expense) after
provision for credit losses 23,337 21,099 20,593 (2,015 ) - 63,014
Non-interest income 1,173 3,259 855 4,647 (2,952 ) 6,982
Non-interest expense   (11,980 )   (16,467 )   (11,082 )   (10,966 )   2,952     (47,543 )
Income (loss) from continuing
operations before income taxes 12,530 7,891 10,366 (8,334 ) - 22,453
Income tax expense (benefit)   3,768     2,055     3,958     (3,029 )   -     6,752  
Income (loss) from continuing operations 8,762 5,836 6,408 (5,305 ) - 15,701
Loss from discontinued operations, net   -     -     -     (243 )   -     (243 )
Net income (loss) $ 8,762   $ 5,836   $ 6,408   $ (5,548 ) $ -   $ 15,458  
 

(in thousands)

Nine Months Ended September 30, 2012:

 

Net interest income (expense) $ 71,564 $ 83,054 $ 64,406 $ (6,216 ) $ - $ 212,808
Provision for credit losses   1,215     28,846     5,282     -     -     35,343  
Net interest income (expense) after
provision for credit losses 70,349 54,208 59,124 (6,216 ) - 177,465
Non-interest income 5,021 11,132 3,111 8,539 (7,540 ) 20,263
Noninterest expense   (35,986 )   (53,437 )   (33,492 )   (24,496 )   7,540     (139,871 )
Income (loss) from continuing
operations before income taxes 39,384 11,903 28,743 (22,173 ) - 57,857
Income tax expense (benefit)   13,031     1,341     11,255     (9,175 )   -     16,452  
Income (loss) from continuing operations 26,353 10,562 17,488 (12,998 ) - 41,405
Loss from discontinued operations, net   -     -     -     (686 )   -     (686 )
Net income (loss) $ 26,353   $ 10,562   $ 17,488   $ (13,684 ) $ -   $ 40,719  
 
* Excludes discontinued operations
 
 

                             
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
 
September 30, June 30, March 31, December 31, September 30,
2013 2013 2013 2012 2012
(dollars in thousands)
 
Total stockholders' equity $ 826,287 $ 799,524 $ 781,294 $ 759,616 $ 698,011
Less:
Goodwill and intangible assets   27,970     28,568     29,166     29,763     28,989  
Total tangible stockholders' equity 798,317 770,956 752,128 729,853 669,022
Less:
Preferred stock   141,000     141,000     141,000     141,000     141,000  
Total tangible common equity 657,317 629,956 611,128 588,853 528,022
Add:
Deferred tax   1,661     1,870     2,080     2,289     2,033  
Total tangible common equity, net of tax $ 658,978   $ 631,826   $ 613,208   $ 591,142   $ 530,055  
Total assets $ 8,921,429 $ 8,593,684 $ 8,174,103 $ 7,622,637 $ 7,403,603
Less:
Goodwill and intangible assets   27,970     28,568     29,166     29,763     28,989  
Tangible assets 8,893,459 8,565,116 8,144,937 7,592,874 7,374,614
Add:
Deferred tax   1,661     1,870     2,080     2,289     2,033  
Total tangible assets, net of tax $ 8,895,120   $ 8,566,986   $ 8,147,017   $ 7,595,163   $ 7,376,647  
Tangible equity ratio (1) 9.0 % 9.0 % 9.2 % 9.6 % 9.1 %
Tangible common equity ratio (2) 7.4 % 7.4 % 7.5 % 7.8 % 7.2 %
Common shares outstanding 87,099 86,997 87,079 86,465 83,455
Tangible book value per share, net of tax (3) $ 7.57 $ 7.26 $ 7.04 $ 6.84 $ 6.35
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2013 2013 2013 2012 2012
(in thousands)
 
Total non-interest income $ 2,625 $ 10,862 $ 3,899 $ 24,463 $ 6,982
Less:

Unrealized (losses) gains on assets/liabilities measured at fair value, net

(7 ) (3,290 ) (471 ) (48 ) 470
Gain on sale of subsidiary/non-controlling interest - - - 116 776
Bargain purchase gain from acquisition - 10,044 - 17,562 -
Legal settlements - - 38 879 -
Mutual fund gains - - - 483 -
Amortization of affordable housing investments (1,504 ) (900 ) (900 ) (1,069 ) (651 )
(Losses) Gains on sales of investment securities, net   (1,679 )   (5 )   147     1,447     1,031  
Total operating non-interest income 5,815 5,013 5,085 5,093 5,356
Add: net interest income   84,559     82,152     76,203     77,455     71,946  
Net operating revenue (4) $ 90,374   $ 87,165   $ 81,288   $ 82,548   $ 77,302  
 
Total non-interest expense $ 49,675 $ 48,531 $ 46,929 $ 48,989 $ 47,543
Less:
Net loss (gain) on sales and valuations of repossessed assets 371 (1,124 ) 519 529 126
Merger / restructure expense 1,018 2,620 195 2,706 113
Goodwill impairment   -     -     -     -     3,435  
Total operating non-interest expense (4) $ 48,286   $ 47,035   $ 46,215   $ 45,754   $ 43,869  
 
Net operating revenue $ 90,374 $ 87,165 $ 81,288 $ 82,548 $ 77,302
Less:
Operating non-interest expense   48,286     47,035     46,215     45,754     43,869  
Pre-tax, pre-provision operating earnings (5) $ 42,088   $ 40,130   $ 35,073   $ 36,794   $ 33,433  
 
 

                             
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2013 2013 2013 2012 2012
(in thousands)
Total operating non-interest expense $ 48,286   $ 47,035   $ 46,215   $ 45,754   $ 43,869  
Divided by:
Total net interest income $ 84,559 $ 82,152 $ 76,203 $ 77,455 $ 71,946
Add:
Tax equivalent interest adjustment 3,272 2,929 3,382 3,012 2,655
Operating non-interest income   5,815     5,013     5,085     5,093     5,356  
$ 93,646   $ 90,094   $ 84,670   $ 85,560   $ 79,957  
Efficiency ratio - tax equivalent basis (6) 51.6 % 52.2 % 54.6 % 53.5 % 54.9 %
 
Three Months Ended
September 30, September 30,
2013 2012
(in thousands)
Stockholders' equity $ 826,287 $ 698,011
Less:
Accumulated other comprehensive (loss) income (14,504 ) 12,109
Non-qualifying goodwill and intangibles 26,373 26,867
Other non-qualifying assets - 25
Disallowed unrealized losses on equity securities 5,112 -
Add:
Qualifying trust preferred securities 46,918 44,819
Tier 1 capital (regulatory) (7) (10) 856,224 703,829
Less:
Qualifying non-controlling interests - 75
Qualifying trust preferred securities 46,918 44,819
Preferred stock   141,000     141,000  
Estimated Tier 1 common equity (8) (10) $ 668,306 $ 517,935
Divided by:

Estimated risk-weighted assets (regulatory) (8) (10)

$ 7,626,352   $ 6,394,105  
Tier 1 common equity ratio (8) (10) 8.8 % 8.1 %
 
September 30, September 30,
2013 2012
(in thousands)
Classified assets $ 296,580 $ 316,253
Divide:
Tier 1 capital (regulatory) (7) (10) 856,224 703,829
Plus: Allowance for credit losses   95,385     97,410  
Total Tier 1 capital plus allowance for credit losses $ 951,609   $ 801,239  
Classified assets to Tier 1 capital plus allowance (9) (10) 31 % 39 %
 

(1)

   

We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.

(2)

We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.

(3)

We believe this non-GAAP ratio improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.

(4)

We believe these non-GAAP measurements provide a useful indication of the cash generating capacity of the Company.

(5)

We believe this non-GAAP measurement is a key indicator of the earnings power of the Company.

(6)

We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company.

(7)

Under the guidelines of the Federal Reserve and the FDIC in effect, Tier 1 capital consisted of common stock, retained earnings, non-cumulative perpetual preferred stock, trust preferred securities up to a certain limit, and minority interests in certain subsidiaries, less most other intangible assets.

(8)

Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is divided by the risk-weighted assets to determine the Tier 1 common equity ratio. We believe this non-GAAP ratio with which to analyze and evaluate financial condition and capital strength.

(9)

We believe this non-GAAP ratio provides a critical regulatory metric in which to analyze asset quality.

(10)

Current quarter is preliminary until Call Reports are filed.

Western Alliance Bancorporation
Dale Gibbons, 602-952-5476

Source: Western Alliance Bancorporation

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