Western Alliance Bancorporation (NYSE:WAL):
FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS
Quarter Highlights:
Net income
Earnings per share
PPNR1
Net interest margin
Adjusted efficiency
ratio1
Book value per common
share
$147.9 million
$1.33
$220.3 million
3.65%
59.1%
$52.81
$1.911, excluding notable
items
$46.721, excluding goodwill and
intangibles
CEO COMMENTARY:
“Western Alliance’s diversified, national
commercial business strategy continued to drive strong momentum in
the fourth quarter as we generated earnings per share of $1.911,
excluding $0.58 of notable items. We view this quarter’s solid loan
and deposit momentum, continued net interest income growth, and
sustained stable asset quality as positioning us to deliver leading
profitability in 2024, supported by sturdy capital and liquidity
levels,” said Kenneth A. Vecchione, President and Chief Executive
Officer. “CET1 capital reached 10.8% at year-end, and tangible book
value per share rose 16% year-over-year to $46.721. Additionally,
our strong deposit growth allowed us to repay $1.5 billion of debt
and borrowings, including our entire loan from the Bank Term
Funding Program. As we turn the page on 2023, we are encouraged by
how our employees responded to the year’s challenges as well as the
ongoing trust placed in us by our customers and shareholders.”
LINKED-QUARTER BASIS
FULL YEAR
FINANCIAL HIGHLIGHTS:
- Net income of $147.9 million and earnings per share of $1.33,
compared to $216.6 million and $1.97, respectively
- Net revenue of $682.2 million, a decrease of 4.7%, or $34.0
million, compared to an increase in non-interest expenses of 8.4%,
or $35.7 million
- Pre-provision net revenue1 of $220.3 million, down $69.7
million from $290.0 million
- Effective tax rate of 29.9%, compared to 22.1%
- Net income of $722.4 million and earnings per share of $6.54,
down 31.7% and 32.6%, from $1.1 billion and $9.70,
respectively
- Net revenue of $2.6 billion, an increase of 3.1%, or $78.7
million, compared to an increase in non-interest expenses of 40.3%,
or $466.7 million
- Pre-provision net revenue1 of $996.2 million, down $388.0
million from $1.4 billion
- Effective tax rate of 22.6%, compared to 19.7%
FINANCIAL POSITION RESULTS:
- HFI loans of $50.3 billion, up $850 million, or 1.7%.
- Total deposits of $55.3 billion, up $1.0 billion, or 1.9%
- Stockholders' equity of $6.1 billion, up $332 million
- Decrease in HFI loans of $1.6 billion, or 3.0%
- Increase in total deposits of $1.7 billion, or 3.1%
- Increase in stockholders' equity of $722 million
LOANS AND ASSET QUALITY:
- Nonperforming assets (nonaccrual loans and repossessed assets)
to total assets of 0.40%, compared to 0.35%
- Annualized net loan charge-offs to average loans outstanding of
0.07%, flat from the prior quarter
- Nonperforming assets to total assets of 0.40%, compared to
0.14%
- Net loan charge-offs to average loans outstanding of 0.06%,
compared to approximately 0.00%
KEY PERFORMANCE METRICS:
- Net interest margin of 3.65% decreased from 3.67%
- Return on average assets and on tangible common equity1 of
0.84% and 11.9%, compared to 1.24% and 17.3%, respectively
- Tangible common equity ratio1 of 7.3%, compared to 6.8%
- CET 1 ratio of 10.8% increased from 10.6%
- Tangible book value per share1, net of tax, of $46.72, an
increase of 7.0% from $43.66
- Adjusted efficiency ratio1 of 59.1%, compared to 50.0%
- Net interest margin of 3.63% decreased from 3.67%
- Return on average assets and on tangible common equity1 of
1.03% and 14.9%, compared to 1.62% and 25.4%, respectively
- Tangible common equity ratio1 of 7.3% increased from 6.5%
- CET 1 ratio of 10.8% increased from 9.3%
- Tangible book value per share1, net of tax, of $46.72, an
increase of 16.1% from $40.25
- Adjusted efficiency ratio1 of 53.5%, compared to 41.1%
1
See reconciliation of Non-GAAP Financial Measures.
Income Statement
Net interest income totaled $591.7 million in the fourth quarter
2023, an increase of $4.7 million, or 0.8%, from $587.0 million in
the third quarter 2023, and a decrease of $48.0 million, or 7.5%,
compared to the fourth quarter 2022. The increase in net interest
income from the third quarter 2023 is due to an increase in average
HFI loan and securities balances combined with a decrease in
average short-term borrowings, and was partially offset by an
increase in deposit balances and rates. The decrease in net
interest income from the fourth quarter 2022 was driven by an
increase in both the balances and rates of deposits and short-term
borrowings, partially offset by higher yields on HFI loans.
The Company recorded a provision for credit losses of $9.3
million in the fourth quarter 2023, a decrease of $2.8 million from
$12.1 million in the third quarter 2023, and an increase of $6.2
million from $3.1 million in the fourth quarter 2022. The decrease
in provision for credit losses during the fourth quarter 2023 is
primarily due to improvement in the macroeconomic outlook and
stable asset quality.
The Company’s net interest margin in the fourth quarter 2023 was
3.65%, a decrease from 3.67% in the third quarter 2023, and a
decrease from 3.98% in the fourth quarter 2022. An increase in
deposit balances and rates drove a decrease in net interest margin
from the third quarter 2023, with higher average HFI loan and
securities balances partially offsetting this decrease. The
decrease in net interest margin from the fourth quarter 2022 was
driven by higher average balances and rates on deposits and
short-term borrowings.
Non-interest income was $90.5 million for the fourth quarter
2023, compared to $129.2 million for the third quarter 2023, and
$61.5 million for the fourth quarter 2022. The $38.7 million
decrease in non-interest income for the third quarter 2023 was due
to a decrease in fair value gain adjustments of $16.5 million and a
$14.8 million loss on sale of securities in the fourth quarter
compared to a gain of $0.1 million in the third quarter, combined
with an $18.1 million decrease in net loan servicing revenue due to
losses on MSR sales and fair value changes, partially offset by
higher servicing income, and a $4.2 million decrease in net gain on
loan origination and sale activities from lower spreads. These
decreases were offset by a $12.6 million increase in income from
equity investments. The $29.0 million increase in non-interest
income from the fourth quarter 2022 was driven by a higher net gain
on loan origination and sale activities, service charges and fees,
and fair value gain adjustments.
Net revenue totaled $682.2 million for the fourth quarter 2023,
a decrease of $34.0 million or 4.7%, compared to $716.2 million for
the third quarter 2023, and a decrease of $19.0 million or 2.7%,
compared to $701.2 million for the fourth quarter 2022.
Non-interest expense was $461.9 million for the fourth quarter
2023, compared to $426.2 million for the third quarter 2023, and
$333.4 million for the fourth quarter 2022. The Company’s adjusted
efficiency ratio1 was 59.1% for the fourth quarter 2023, compared
to 50.0% in the third quarter 2023, and 40.0% for the fourth
quarter 2022. The increase in non-interest expense from the third
quarter 2023 is due primarily to increased insurance costs largely
related to the FDIC special assessment, partially offset by a gain
on debt extinguishment related to the early payoff of the AmeriHome
senior notes. The increase in non-interest expense from the fourth
quarter 2022 is primarily attributable to an increase in insurance
and deposit costs.
Income tax expense was $63.1 million for the fourth quarter
2023, compared to $61.3 million for the third quarter 2023, and
$71.7 million for the fourth quarter 2022. The increase in income
tax expense from the third quarter 2023 is primarily related to a
higher effective tax rate resulting from lower utilization of tax
credits due to timing of projects being placed in service, the AOCI
impact of AFS securities gains during the quarter, and discrete
nondeductible items.
Net income was $147.9 million for the fourth quarter 2023, a
decrease of $68.7 million from $216.6 million for the third quarter
2023, and a decrease of $145.1 million from $293.0 million for the
fourth quarter 2022. Earnings per share totaled $1.33 for the
fourth quarter 2023, compared to $1.97 for the third quarter 2023,
and $2.67 for the fourth quarter 2022. Earnings per share,
excluding notable items1, totaled $1.91 for the fourth quarter
2023. The Company views its earnings per share, excluding notable
items1 as a key metric for assessing the Company’s earnings
power.
The Company views its pre-provision net revenue1 ("PPNR") as a
key metric for assessing the Company’s earnings power, which it
defines as net revenue less non-interest expense. For the fourth
quarter 2023, the Company’s PPNR1 was $220.3 million, down $69.7
million from $290.0 million in the third quarter 2023, and down
$147.5 million from $367.8 million in the fourth quarter 2022.
The Company had 3,260 full-time equivalent employees and 57
offices at December 31, 2023, compared to 3,272 employees and 56
offices at September 30, 2023, and 3,365 employees and 56 offices
at December 31, 2022.
1
See reconciliation of Non-GAAP Financial Measures.
Balance Sheet
HFI loans, net of deferred fees totaled $50.3 billion at
December 31, 2023, compared to $49.4 billion at September 30, 2023,
and $51.9 billion at December 31, 2022. The increase in HFI loans
of $850 million from the prior quarter was driven by an increase of
$759 million in commercial and industrial loans and $220 million in
construction and land development loans. This increase was
partially offset by a decrease in CRE non-owner occupied loans of
$160 million. The decrease in HFI loans of $1.6 billion from
December 31, 2022 was driven by a $1.6 billion decrease in
commercial and industrial loans and a $1.2 billion decrease in
residential real estate loans, resulting from loan dispositions
undertaken as part of the Company's balance sheet repositioning
strategy. This decrease was partially offset by increases in
construction and land development loans and CRE non-owner occupied
of $876 million and $331 million, respectively. HFS loans totaled
$1.4 billion at December 31, 2023, compared to $1.8 billion at
September 30, 2023, and $1.2 billion at December 31, 2022. The
balance of HFS loans at December 31, 2023 primarily consisted of
AmeriHome HFS loans, consistent with the balance at December 31,
2022 and prior periods. The decrease of $364 million in HFS loans
from the prior quarter is primarily related to loan sales. The
increase of $218 million in HFS loans from December 31, 2022
primarily related to an increase in agency conforming loans.
The Company's allowance for credit losses on HFI loans consists
of an allowance for funded HFI loans and an allowance for unfunded
loan commitments. At December 31, 2023, the allowance for loan
losses to funded HFI loans ratio was 0.67%, compared to 0.66% at
September 30, 2023, and 0.60% at December 31, 2022. The allowance
for credit losses, which includes the allowance for unfunded loan
commitments, to funded HFI loans ratio was 0.73% at December 31,
2023, compared to 0.74% at September 30, 2023, and 0.69% at
December 31, 2022. The Company is a party to credit linked note
transactions, which effectively transfer a portion of the risk of
losses on reference pools of loans to the purchasers of the notes.
The Company is protected from first credit losses on reference
pools of loans totaling $9.1 billion, $9.3 billion, and $12.0
billion as of December 31, 2023, September 30, 2023, and December
31, 2022, respectively, under these transactions. However, as these
note transactions are considered to be free standing credit
enhancements, the allowance for credit losses cannot be reduced by
the expected credit losses that may be mitigated by these notes.
Accordingly, the allowance for loan and credit losses ratios
include an allowance of $14.7 million as of December 31, 2023,
$17.4 million as of September 30, 2023, and $18.5 million as of
December 31, 2022, related to these pools of loans. The allowance
for credit losses to funded HFI loans ratio, adjusted to reduce the
HFI loan balance by the amount of loans in covered reference pools,
was 0.89% at December 31, 2023, 0.91% at September 30, 2023, and
0.89% at December 31, 2022.
Deposits totaled $55.3 billion at December 31, 2023, an increase
of $1.0 billion from $54.3 billion at September 30, 2023, and an
increase of $1.7 billion from $53.6 billion at December 31, 2022.
By deposit type, the increase from the prior quarter is
attributable to increases of $3.1 billion from interest-bearing
demand deposits and $1.3 billion from certificates of deposits,
offset by a decrease of $3.5 billion from non-interest bearing
demand deposits. From December 31, 2022, interest-bearing demand
deposits and certificates of deposit increased $6.4 billion and
$5.1 billion, respectively. These increases were partially offset
by decreases in non-interest bearing demand deposits and savings
and money market accounts of $5.2 billion and $4.6 billion,
respectively. Non-interest bearing deposits were $14.5 billion at
December 31, 2023, compared to $18.0 billion at September 30, 2023,
and $19.7 billion at December 31, 2022.
The table below shows the Company's deposit types as a
percentage of total deposits:
Dec 31, 2023
Sep 30, 2023
Dec 31, 2022
Non-interest bearing
26.2
%
33.1
%
36.7
%
Savings and money market
26.7
27.0
36.2
Interest-bearing demand
28.8
23.7
17.7
Certificates of deposit
18.3
16.2
9.4
The Company’s ratio of HFI loans to deposits was 90.9% at
December 31, 2023, compared to 91.1% at September 30, 2023, and
96.7% at December 31, 2022.
Borrowings were $7.2 billion at December 31, 2023, $8.7 billion
at September 30, 2023, and $6.3 billion at December 31, 2022.
Borrowings decreased $1.5 billion from September 30, 2023 due to
payoff of the Bank Term Funding Program advances and the AmeriHome
senior notes. The increase in borrowings from December 31, 2022 is
due primarily to an increase in short-term borrowings of $1.8
billion, partially offset by payoffs of credit linked notes and the
AmeriHome senior notes.
Qualifying debt totaled $895 million at December 31, 2023,
compared to $890 million at September 30, 2023, and $893 million at
December 31, 2022.
Stockholders’ equity was $6.1 billion at December 31, 2023,
compared to $5.7 billion at September 30, 2023 and $5.4 billion at
December 31, 2022. The increase in stockholders’ equity from the
prior quarter was due to net income and unrealized fair value gains
of $222 million on the Company's available-for-sale securities,
which are recorded in other comprehensive loss, net of tax. These
increases were partially offset by dividends to shareholders. Cash
dividends of $40.5 million ($0.37 per common share) and $3.2
million ($0.27 per depository share) were paid to shareholders
during the fourth quarter 2023. The increase in stockholders'
equity from December 31, 2022 is primarily a function of net
income, partially offset by dividends to shareholders.
At December 31, 2023, tangible common equity, net of tax1, was
7.3% of tangible assets1 and total capital was 13.7% of
risk-weighted assets. The Company’s tangible book value per share1
was $46.72 at December 31, 2023, an increase of 7.0% from $43.66 at
September 30, 2023, and up 16.1% from $40.25 at December 31, 2022.
The increase in tangible book value per share from September 30,
2023 is attributable to net income.
Total assets remained flat from September 30, 2023 to December
31, 2023 at $70.9 billion, and increased 4.6% from $67.7 billion at
December 31, 2022. The slight decrease in total assets from
September 30, 2023 was driven by a decrease in cash and HFS loans,
offset by an increase in investment securities. The increase in
total assets from December 31, 2022 was driven by an increase in
investments, cash, and HFS loans, partially offset by a decrease in
HFI loans.
1
See reconciliation of Non-GAAP Financial Measures.
Asset Quality
Provision for credit losses totaled $9.3 million for the fourth
quarter 2023, compared to $12.1 million for the third quarter 2023,
and $3.1 million for the fourth quarter 2022. Net loan charge-offs
in the fourth quarter 2023 were $8.5 million, or 0.07% of average
loans (annualized), compared to $8.0 million, or 0.07%, in the
third quarter 2023, and $1.8 million, or 0.01%, in the fourth
quarter 2022.
Nonaccrual loans increased $36 million to $273 million during
the quarter and increased $188 million from December 31, 2022.
Loans past due 90 days and still accruing interest totaled $42
million at December 31, 2023 and zero at September 30, 2023 and
December 31, 2022 (excluding government guaranteed loans of $399
million, $439 million, and $582 million, respectively). Loans past
due 30-89 days and still accruing interest totaled $164 million at
December 31, 2023, a decrease from $189 million at September 30,
2023, and an increase from $70 million at December 31, 2022
(excluding government guaranteed loans of $279 million, $261
million, and $334 million, respectively).
Repossessed assets totaled $8 million at December 31, 2023, flat
from September 30, 2023, and a decrease of $3 million from December
31, 2022. Classified assets totaled $673 million at December 31,
2023, an increase of $34 million from $639 million at September 30,
2023, and an increase of $280 million from $393 million at December
31, 2022.
The ratio of classified assets to Tier 1 capital plus the
allowance for credit losses, a common regulatory measure of asset
quality, was 10.5% at December 31, 2023, compared to 10.2% at
September 30, 2023, and 6.8% at December 31, 2022.
1
See reconciliation of Non-GAAP Financial Measures.
Segment Highlights
The Company's reportable segments are aggregated with a focus on
products and services offered and consist of three reportable
segments:
–
Commercial segment: provides commercial
banking and treasury management products and services to small and
middle-market businesses, specialized banking services to
sophisticated commercial institutions and investors within niche
industries, as well as financial services to the real estate
industry.
–
Consumer Related segment: offers both
commercial banking services to enterprises in consumer-related
sectors and consumer banking services, such as residential mortgage
banking.
–
Corporate & Other segment: consists of
the Company's investment portfolio, Corporate borrowings and other
related items, income and expense items not allocated to our other
reportable segments, and inter-segment eliminations.
Key management metrics for evaluating the performance of the
Company's Commercial and Consumer Related segments include loan and
deposit growth, asset quality, and pre-tax income.
The Commercial segment reported an HFI loan balance of $29.1
billion at December 31, 2023, an increase of $416 million during
the quarter, and a decrease of $2.3 billion during the year.
Deposits for the Commercial segment totaled $23.9 billion at
December 31, 2023, an increase of $1.3 billion during the quarter,
and a decrease of $5.6 billion during the year.
Pre-tax income for the Commercial segment was $168.4 million for
the three months ended December 31, 2023, a decrease of $27.7
million from the three months ended September 30, 2023, and a
decrease of $152.1 million from the three months ended December 31,
2022. For the year ended December 31, 2023, the Commercial segment
reported total pre-tax income of $745.2 million, a decrease of
$350.1 million compared to the year ended December 31, 2022.
The Consumer Related segment reported an HFI loan balance of
$21.2 billion at December 31, 2023, an increase of $434 million
during the quarter, and an increase of $713 million during the
year. The Consumer Related segment also has loans held for sale of
$1.4 billion at December 31, 2023, a decrease of $364 million
during the quarter, and an increase of $218 million during the
year. Deposits for the Consumer Related segment totaled $24.9
billion, a decrease of $169 million during the quarter, and an
increase of $6.4 billion during the year.
Pre-tax income for the Consumer Related segment was $75.6
million for the three months ended December 31, 2023, an increase
of $6.7 million from the three months ended September 30, 2023, and
an increase of $5.8 million from the three months ended December
31, 2022. Pre-tax income for the Consumer Related segment for the
year ended December 31, 2023 totaled $258.0 million, a decrease of
$192.1 million compared to the year ended December 31, 2022.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and
live webcast to discuss its fourth quarter and full year 2023
financial results at 12:00 p.m. ET on Friday, January 26, 2024.
Participants may access the call by dialing 1-833-470-1428 and
using access code 941447 or via live audio webcast using the
website link https://events.q4inc.com/attendee/536267609. The
webcast is also available via the Company’s website at
www.westernalliancebancorporation.com. Participants should log in
at least 15 minutes early to receive instructions. The call will be
recorded and made available for replay after 3:00 p.m. ET January
26th through 11:00 p.m. ET February 26th by dialing 1-866-813-9403,
using access code 690232.
Reclassifications
Certain amounts in the Consolidated Income Statements for the
prior periods have been reclassified to conform to the current
presentation. The reclassifications have no effect on net income or
stockholders’ equity as previously reported.
Use of Non-GAAP Financial Information
This press release contains both financial measures based on
GAAP and non-GAAP based financial measures, which are used where
management believes them to be helpful in understanding the
Company’s results of operations or financial position. Where
non-GAAP financial measures are used, the comparable GAAP financial
measure, as well as the reconciliation 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.
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 our
expectations with regard to our business, financial and operating
results, future economic performance and dividends. 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: the risk factors discussed in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2022 and the Company's
subsequent Quarterly Reports on Form 10-Q, each as filed with the
Securities and Exchange Commission; adverse developments in the
financial services industry generally such as the bank failures in
2023 and any related impact on depositor behavior; risks related to
the sufficiency of liquidity; the potential adverse effects of
unusual and infrequently occurring events such as the COVID-19
pandemic and any governmental or societal responses thereto;
changes in general economic conditions, either nationally or
locally in the areas in which we conduct or will conduct our
business; the impact on financial markets from geopolitical
conflicts such as the wars in Ukraine and the Middle East;
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, including expansion through acquisitions;
additional regulatory requirements resulting from our continued
growth; 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.
About Western Alliance Bancorporation
With more than $70 billion in assets, Western Alliance
Bancorporation (NYSE:WAL) is one of the country’s top-performing
banking companies. Through its primary subsidiary, Western Alliance
Bank, Member FDIC, clients benefit from a full spectrum of tailored
commercial banking solutions and consumer products, all delivered
with outstanding service by industry experts who put customers
first. Major accolades include being ranked as a top U.S. bank in
2023 by American Banker and Bank Director. Serving clients across
the country wherever business happens, Western Alliance Bank
operates individual, full-service banking and financial brands with
offices in key markets nationwide. For more information, visit
westernalliancebank.com.
Western Alliance Bancorporation and
Subsidiaries
Summary Consolidated Financial
Data
Unaudited
Selected Balance Sheet Data:
As of December 31,
2023
2022
Change %
(in millions)
Total assets
$
70,862
$
67,734
4.6
%
Loans held for sale
1,402
1,184
18.4
HFI loans, net of deferred fees
50,297
51,862
(3.0
)
Investment securities
12,993
8,760
48.3
Total deposits
55,333
53,644
3.1
Borrowings
7,230
6,299
14.8
Qualifying debt
895
893
0.2
Stockholders' equity
6,078
5,356
13.5
Tangible common equity, net of tax (1)
5,116
4,383
16.7
Common equity Tier 1 capital
5,659
5,073
11.6
Selected Income Statement Data:
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
Change %
2023
2022
Change %
(in millions, except per share
data)
(in millions, except per share
data)
Interest income
$
1,039.0
$
888.3
17.0
%
$
4,035.3
$
2,691.8
49.9
%
Interest expense
447.3
248.6
79.9
1,696.4
475.5
NM
Net interest income
591.7
639.7
(7.5
)
2,338.9
2,216.3
5.5
Provision for credit losses
9.3
3.1
NM
62.6
68.1
(8.1
)
Net interest income after provision for
credit losses
582.4
636.6
(8.5
)
2,276.3
2,148.2
6.0
Non-interest income
90.5
61.5
47.2
280.7
324.6
(13.5
)
Non-interest expense
461.9
333.4
38.5
1,623.4
1,156.7
40.3
Income before income taxes
211.0
364.7
(42.1
)
933.6
1,316.1
(29.1
)
Income tax expense
63.1
71.7
(12.0
)
211.2
258.8
(18.4
)
Net income
147.9
293.0
(49.5
)
722.4
1,057.3
(31.7
)
Dividends on preferred stock
3.2
3.2
—
12.8
12.8
—
Net income available to common
stockholders
$
144.7
$
289.8
(50.1
)
$
709.6
$
1,044.5
(32.1
)
Diluted earnings per common share
$
1.33
$
2.67
(50.2
)
$
6.54
$
9.70
(32.6
)
(1)
See Reconciliation of Non-GAAP
Financial Measures.
NM
Changes +/- 100% are not
meaningful.
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial
Data
Unaudited
Common Share Data:
At or For the Three Months
Ended December 31,
For the Year Ended December
31,
2023
2022
Change %
2023
2022
Change %
Diluted earnings per common share
$
1.33
$
2.67
(50.2
)%
$
6.54
$
9.70
(32.6
)%
Book value per common share
52.81
46.47
13.6
Tangible book value per common share, net
of tax (1)
46.72
40.25
16.1
Average common shares outstanding
(in millions):
Basic
108.4
108.0
0.3
108.3
107.2
1.0
Diluted
108.7
108.4
0.3
108.5
107.6
0.8
Common shares outstanding
109.5
108.9
0.5
Selected Performance Ratios:
Return on average assets (2)
0.84
%
1.67
%
(49.7
)%
1.03
%
1.62
%
(36.4
)%
Return on average tangible common equity
(1, 2)
11.9
27.0
(55.9
)
14.9
25.4
(41.3
)
Net interest margin (2)
3.65
3.98
(8.3
)
3.63
3.67
(1.1
)
Efficiency ratio, adjusted for deposit
costs (1)
59.1
40.0
47.8
53.5
41.1
30.2
HFI loan to deposit ratio
90.9
96.7
(6.0
)
Asset Quality Ratios:
Net charge-offs to average loans
outstanding (2)
0.07
%
0.01
%
NM
0.06
%
0.00
%
NM
Nonaccrual loans to funded HFI loans
0.54
0.16
NM
Nonaccrual loans and repossessed assets to
total assets
0.40
0.14
NM
Allowance for loan losses to funded HFI
loans
0.67
0.60
11.7
Allowance for loan losses to nonaccrual
HFI loans
123
364
(66.2
)
Capital Ratios:
Dec 31, 2023
Sep 30, 2023
Dec 31, 2022
Tangible common equity (1)
7.3
%
6.8
%
6.5
%
Common Equity Tier 1 (3)
10.8
10.6
9.3
Tier 1 Leverage ratio (3)
8.6
8.5
7.8
Tier 1 Capital (3)
11.5
11.3
10.0
Total Capital (3)
13.7
13.5
12.1
(1)
See Reconciliation of Non-GAAP Financial
Measures.
(2)
Annualized on an actual/actual basis for
periods less than 12 months.
(3)
Capital ratios for December 31, 2023 are
preliminary.
NM
Changes +/- 100% are not meaningful.
Western Alliance Bancorporation and
Subsidiaries
Condensed Consolidated Income
Statements
Unaudited
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(dollars in millions, except per
share data)
Interest income:
Loans
$
859.0
$
785.1
$
3,409.7
$
2,393.4
Investment securities
136.2
89.4
467.5
272.6
Other
43.8
13.8
158.1
25.8
Total interest income
1,039.0
888.3
4,035.3
2,691.8
Interest expense:
Deposits
343.7
157.6
1,142.6
276.4
Qualifying debt
9.6
9.1
37.9
35.0
Borrowings
94.0
81.9
515.9
164.1
Total interest expense
447.3
248.6
1,696.4
475.5
Net interest income
591.7
639.7
2,338.9
2,216.3
Provision for credit losses
9.3
3.1
62.6
68.1
Net interest income after provision for
credit losses
582.4
636.6
2,276.3
2,148.2
Non-interest income:
Net gain on loan origination and sale
activities
47.8
25.4
193.5
104.0
Service charges and fees
22.7
5.9
76.3
27.0
Income from equity investments
13.1
4.2
15.7
17.8
Net loan servicing revenue
9.1
21.4
102.3
130.9
Commercial banking related income
5.9
5.5
23.7
21.5
(Loss) gain on recovery from credit
guarantees
(2.7
)
3.0
(2.2
)
14.7
(Loss) gain on sales of investment
securities
(14.8
)
0.1
(40.8
)
6.8
Fair value gain (loss) adjustments,
net
1.3
(9.2
)
(116.0
)
(28.6
)
Other
8.1
5.2
28.2
30.5
Total non-interest income
90.5
61.5
280.7
324.6
Non-interest expenses:
Salaries and employee benefits
134.6
125.7
566.3
539.5
Deposit costs
131.0
82.2
436.7
165.8
Insurance
108.6
8.9
190.4
31.1
Data processing
33.1
23.9
122.0
83.0
Legal, professional, and directors'
fees
29.4
26.0
107.2
99.9
Occupancy
16.9
15.8
65.6
55.5
Loan servicing expenses
14.7
14.8
58.8
55.5
Business development and marketing
6.7
7.3
21.8
22.1
Loan acquisition and origination
expenses
4.8
4.4
20.4
23.1
Net loss (gain) on sales and valuations of
repossessed and other assets
0.3
(0.3
)
3.0
(0.7
)
Gain on extinguishment of debt
(39.3
)
—
(52.7
)
—
Other
21.1
24.7
83.9
81.9
Total non-interest expense
461.9
333.4
1,623.4
1,156.7
Income before income taxes
211.0
364.7
933.6
1,316.1
Income tax expense
63.1
71.7
211.2
258.8
Net income
147.9
293.0
722.4
1,057.3
Dividends on preferred stock
3.2
3.2
12.8
12.8
Net income available to common
stockholders
$
144.7
$
289.8
$
709.6
$
1,044.5
Earnings per common share:
Diluted shares
108.7
108.4
108.5
107.6
Diluted earnings per share
$
1.33
$
2.67
$
6.54
$
9.70
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Income Statements
Unaudited
Three Months Ended
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
(in millions, except per share
data)
Interest income:
Loans
$
859.0
$
860.8
$
857.2
$
832.7
$
785.1
Investment securities
136.2
122.8
112.4
96.1
89.4
Other
43.8
43.0
31.2
40.1
13.8
Total interest income
1,039.0
1,026.6
1,000.8
968.9
888.3
Interest expense:
Deposits
343.7
316.2
251.1
231.6
157.6
Qualifying debt
9.6
9.5
9.5
9.3
9.1
Borrowings
94.0
113.9
189.9
118.1
81.9
Total interest expense
447.3
439.6
450.5
359.0
248.6
Net interest income
591.7
587.0
550.3
609.9
639.7
Provision for credit losses
9.3
12.1
21.8
19.4
3.1
Net interest income after provision for
credit losses
582.4
574.9
528.5
590.5
636.6
Non-interest income:
Net gain on loan origination and sale
activities
47.8
52.0
62.3
31.4
25.4
Service charges and fees
22.7
23.3
20.8
9.5
5.9
Income from equity investments
13.1
0.5
0.7
1.4
4.2
Net loan servicing revenue
9.1
27.2
24.1
41.9
21.4
Commercial banking related income
5.9
5.6
6.0
6.2
5.5
(Loss) gain on recovery from credit
guarantees
(2.7
)
(4.0
)
1.2
3.3
3.0
(Loss) gain on sales of investment
securities
(14.8
)
0.1
(13.6
)
(12.5
)
0.1
Fair value gain (loss) adjustments,
net
1.3
17.8
12.7
(147.8
)
(9.2
)
Other
8.1
6.7
4.8
8.6
5.2
Total non-interest income
90.5
129.2
119.0
(58.0
)
61.5
Non-interest expenses:
Salaries and employee benefits
134.6
137.2
145.6
148.9
125.7
Deposit costs
131.0
127.8
91.0
86.9
82.2
Insurance
108.6
33.1
33.0
15.7
8.9
Data processing
33.1
33.9
28.6
26.4
23.9
Legal, professional, and directors'
fees
29.4
28.3
26.4
23.1
26.0
Occupancy
16.9
16.8
15.4
16.5
15.8
Loan servicing expenses
14.7
11.9
18.4
13.8
14.8
Business development and marketing
6.7
4.9
5.0
5.2
7.3
Loan acquisition and origination
expenses
4.8
5.6
5.6
4.4
4.4
Net loss (gain) on sales and valuations of
repossessed and other assets
0.3
2.2
0.5
0.0
(0.3
)
Gain on extinguishment of debt
(39.3
)
—
(0.7
)
(12.7
)
—
Other
21.1
24.5
18.6
19.7
24.7
Total non-interest expense
461.9
426.2
387.4
347.9
333.4
Income before income taxes
211.0
277.9
260.1
184.6
364.7
Income tax expense
63.1
61.3
44.4
42.4
71.7
Net income
147.9
216.6
215.7
142.2
293.0
Dividends on preferred stock
3.2
3.2
3.2
3.2
3.2
Net income available to common
stockholders
$
144.7
$
213.4
$
212.5
$
139.0
$
289.8
Earnings per common share:
Diluted shares
108.7
108.5
108.3
108.3
108.4
Diluted earnings per share
$
1.33
$
1.97
$
1.96
$
1.28
$
2.67
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Balance Sheets
Unaudited
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
(in millions)
Assets:
Cash and due from banks
$
1,576
$
3,497
$
2,153
$
3,639
$
1,043
Investment securities
12,993
11,423
10,374
9,493
8,760
Loans held for sale
1,402
1,766
3,156
7,022
1,184
Loans held for investment:
Commercial and industrial
19,103
18,344
16,657
15,503
20,710
Commercial real estate - non-owner
occupied
9,650
9,810
9,913
9,617
9,319
Commercial real estate - owner
occupied
1,810
1,771
1,805
1,809
1,818
Construction and land development
4,889
4,669
4,428
4,407
4,013
Residential real estate
14,778
14,779
15,000
15,024
15,928
Consumer
67
74
72
75
74
Loans HFI, net of deferred fees
50,297
49,447
47,875
46,435
51,862
Allowance for loan losses
(337
)
(327
)
(321
)
(305
)
(310
)
Loans HFI, net of deferred fees and
allowance
49,960
49,120
47,554
46,130
51,552
Mortgage servicing rights
1,124
1,233
1,007
910
1,148
Premises and equipment, net
339
327
315
293
276
Operating lease right-of-use asset
145
150
151
156
163
Other assets acquired through foreclosure,
net
8
8
11
11
11
Bank owned life insurance
186
184
184
183
182
Goodwill and other intangibles, net
669
672
674
677
680
Other assets
2,460
2,511
2,581
2,533
2,735
Total assets
$
70,862
$
70,891
$
68,160
$
71,047
$
67,734
Liabilities and Stockholders'
Equity:
Liabilities:
Deposits
Non-interest bearing demand deposits
$
14,520
$
17,991
$
16,733
$
16,465
$
19,691
Interest bearing:
Demand
15,916
12,843
12,646
10,719
9,507
Savings and money market
14,791
14,672
13,085
13,845
19,397
Certificates of deposit
10,106
8,781
8,577
6,558
5,049
Total deposits
55,333
54,287
51,041
47,587
53,644
Borrowings
7,230
8,745
9,567
15,853
6,299
Qualifying debt
895
890
888
895
893
Operating lease liability
179
180
179
184
185
Accrued interest payable and other
liabilities
1,147
1,043
800
1,007
1,357
Total liabilities
64,784
65,145
62,475
65,526
62,378
Stockholders' Equity:
Preferred stock
295
295
295
295
295
Common stock and additional paid-in
capital
2,081
2,073
2,064
2,054
2,058
Retained earnings
4,215
4,111
3,937
3,764
3,664
Accumulated other comprehensive loss
(513
)
(733
)
(611
)
(592
)
(661
)
Total stockholders' equity
6,078
5,746
5,685
5,521
5,356
Total liabilities and stockholders'
equity
$
70,862
$
70,891
$
68,160
$
71,047
$
67,734
Western Alliance Bancorporation and
Subsidiaries
Changes in the Allowance For Credit
Losses on Loans
Unaudited
Three Months Ended
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
(in millions)
Allowance for loan losses
Balance, beginning of period
$
327.4
$
321.1
$
304.7
$
309.7
$
304.1
Provision for credit losses (1)
17.8
14.3
23.8
1.0
7.4
Recoveries of loans previously
charged-off:
Commercial and industrial
0.7
0.4
0.7
3.2
0.3
Commercial real estate - non-owner
occupied
—
—
—
—
—
Commercial real estate - owner
occupied
0.1
—
—
—
0.1
Construction and land development
—
—
—
—
—
Residential real estate
—
0.1
—
—
—
Consumer
—
—
0.1
—
—
Total recoveries
0.8
0.5
0.8
3.2
0.4
Loans charged-off:
Commercial and industrial
9.3
5.5
6.0
9.1
1.1
Commercial real estate - non-owner
occupied
—
3.0
2.2
—
—
Commercial real estate - owner
occupied
—
—
—
—
0.5
Construction and land development
—
—
—
—
0.6
Residential real estate
—
—
—
—
—
Consumer
—
—
—
0.1
—
Total loans charged-off
9.3
8.5
8.2
9.2
2.2
Net loan charge-offs
8.5
8.0
7.4
6.0
1.8
Balance, end of period
$
336.7
$
327.4
$
321.1
$
304.7
$
309.7
Allowance for unfunded loan
commitments
Balance, beginning of period
$
37.9
$
41.1
$
44.8
$
47.0
$
52.1
Recovery of credit losses (1)
(6.3
)
(3.2
)
(3.7
)
(2.2
)
(5.1
)
Balance, end of period (2)
$
31.6
$
37.9
$
41.1
$
44.8
$
47.0
Components of the allowance for credit
losses on loans
Allowance for loan losses
$
336.7
$
327.4
$
321.1
$
304.7
$
309.7
Allowance for unfunded loan
commitments
31.6
37.9
41.1
44.8
47.0
Total allowance for credit losses on
loans
$
368.3
$
365.3
$
362.2
$
349.5
$
356.7
Net charge-offs to average loans -
annualized
0.07
%
0.07
%
0.06
%
0.05
%
0.01
%
Allowance ratios
Allowance for loan losses to funded HFI
loans (3)
0.67
%
0.66
%
0.67
%
0.66
%
0.60
%
Allowance for credit losses to funded HFI
loans (3)
0.73
0.74
0.76
0.75
0.69
Allowance for loan losses to nonaccrual
HFI loans
123
138
125
285
364
Allowance for credit losses to nonaccrual
HFI loans
135
154
141
327
420
(1)
The above tables reflect the provision for
credit losses on funded and unfunded loans. There was a $3.3
million provision release on AFS investment securities and a $1.1
million provision for credit losses on HTM investment securities
for the three months ended December 31, 2023. The allowance for
credit losses on AFS and HTM investment securities totaled $1.4
million and $7.8 million, respectively, as of December 31,
2023.
(2)
The allowance for unfunded loan
commitments is included as part of accrued interest payable and
other liabilities on the balance sheet.
(3)
Ratio includes an allowance for credit
losses of $14.7 million as of December 31, 2023 related to a pool
of loans covered under three separate credit linked note
transactions.
Western Alliance Bancorporation and
Subsidiaries
Asset Quality Metrics
Unaudited
Three Months Ended
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
(in millions)
Nonaccrual loans and repossessed
assets
Nonaccrual loans
$
273
$
237
$
256
$
107
$
85
Nonaccrual loans to funded HFI loans
0.54
%
0.48
%
0.53
%
0.23
%
0.16
%
Repossessed assets
$
8
$
8
$
11
$
11
$
11
Nonaccrual loans and repossessed assets to
total assets
0.40
%
0.35
%
0.39
%
0.17
%
0.14
%
Loans Past Due
Loans past due 90 days, still accruing
(1)
$
42
$
—
$
—
$
1
$
—
Loans past due 90 days, still accruing to
funded HFI loans
0.08
%
—
%
—
%
0.00
%
—
%
Loans past due 30 to 89 days, still
accruing (2)
$
164
$
189
$
121
$
58
$
70
Loans past due 30 to 89 days, still
accruing to funded HFI loans
0.33
%
0.38
%
0.25
%
0.13
%
0.13
%
Other credit quality metrics
Special mention loans
$
641
$
668
$
694
$
320
$
351
Special mention loans to funded HFI
loans
1.27
%
1.35
%
1.45
%
0.69
%
0.68
%
Classified loans on accrual
$
379
$
381
$
324
$
325
$
280
Classified loans on accrual to funded HFI
loans
0.75
%
0.77
%
0.68
%
0.70
%
0.54
%
Classified assets
$
673
$
639
$
604
$
459
$
393
Classified assets to total assets
0.95
%
0.90
%
0.89
%
0.65
%
0.58
%
(1)
Excludes government guaranteed residential
mortgage loans of $399 million, $439 million, $481 million, $494
million, and $582 million as of each respective date in the table
above.
(2)
Excludes government guaranteed residential
mortgage loans of $279 million, $261 million, $289 million, $281
million, and $334 million as of each respective date in the table
above.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
December 31, 2023
September 30, 2023
Average Balance
Interest
Average Yield /
Cost
Average Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans held for sale
$
1,830
$
29.6
6.42
%
$
3,069
$
47.3
6.11
%
Loans held for investment:
Commercial and industrial
18,530
343.2
7.40
16,855
324.3
7.70
CRE - non-owner occupied
9,715
188.7
7.71
9,950
196.1
7.83
CRE - owner occupied
1,786
26.0
5.88
1,790
26.4
5.97
Construction and land development
4,789
112.6
9.33
4,545
110.3
9.63
Residential real estate
14,758
157.6
4.24
14,914
155.0
4.12
Consumer
71
1.3
7.52
73
1.4
7.43
Total HFI loans (1), (2), (3)
49,649
829.4
6.65
48,127
813.5
6.73
Securities:
Securities - taxable
9,168
113.5
4.91
8,272
101.1
4.85
Securities - tax-exempt
2,106
22.7
5.35
2,103
21.7
5.12
Total securities (1)
11,274
136.2
4.99
10,375
122.8
4.91
Cash and other
2,572
43.8
6.75
2,911
43.0
5.87
Total interest earning assets
65,325
1,039.0
6.37
64,482
1,026.6
6.37
Non-interest earning assets
Cash and due from banks
287
279
Allowance for credit losses
(340
)
(334
)
Bank owned life insurance
185
184
Other assets
4,525
4,513
Total assets
$
69,982
$
69,124
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
14,268
$
104.6
2.91
%
$
12,947
$
98.9
3.03
%
Savings and money market
14,595
119.1
3.24
13,832
106.3
3.05
Certificates of deposit
9,453
120.0
5.03
9,125
111.0
4.83
Total interest-bearing deposits
38,316
343.7
3.56
35,904
316.2
3.49
Short-term borrowings
5,492
79.4
5.74
6,260
97.2
6.16
Long-term debt
594
14.6
9.73
764
16.7
8.68
Qualifying debt
891
9.6
4.26
888
9.5
4.26
Total interest-bearing
liabilities
45,293
447.3
3.92
43,816
439.6
3.98
Interest cost of funding earning
assets
2.72
2.70
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
17,579
18,402
Other liabilities
1,330
1,052
Stockholders’ equity
5,780
5,854
Total liabilities and stockholders'
equity
$
69,982
$
69,124
Net interest income and margin (4)
$
591.7
3.65
%
$
587.0
3.67
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $9.1 million and $8.9 million for the three months ended
December 31, 2023 and September 30, 2023, respectively.
(2)
Included in the yield computation are net
loan fees of $30.8 million and $28.0 million for the three months
ended December 31, 2023 and September 30, 2023, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
December 31, 2023
December 31, 2022
Average Balance
Interest
Average Yield /
Cost
Average Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans held for sale
$
1,830
$
29.6
6.42
%
$
2,659
$
37.8
5.63
%
Loans held for investment:
Commercial and industrial
18,530
343.2
7.40
21,654
349.3
6.45
CRE - non-owner-occupied
9,715
188.7
7.71
9,077
148.8
6.51
CRE - owner-occupied
1,786
26.0
5.88
1,830
24.4
5.39
Construction and land development
4,789
112.6
9.33
3,798
80.2
8.38
Residential real estate
14,758
157.6
4.24
15,803
143.5
3.60
Consumer
71
1.3
7.52
71
1.1
6.26
Total loans HFI (1), (2), (3)
49,649
829.4
6.65
52,233
747.3
5.70
Securities:
Securities - taxable
9,168
113.5
4.91
6,397
68.4
4.25
Securities - tax-exempt
2,106
22.7
5.35
2,068
21.0
5.07
Total securities (1)
11,274
136.2
4.99
8,465
89.4
4.45
Cash and other
2,572
43.8
6.75
1,361
13.8
4.02
Total interest earning assets
65,325
1,039.0
6.37
64,718
888.3
5.50
Non-interest earning assets
Cash and due from banks
287
289
Allowance for credit losses
(340
)
(308
)
Bank owned life insurance
185
181
Other assets
4,525
4,613
Total assets
$
69,982
$
69,493
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
14,268
$
104.6
2.91
%
$
8,754
$
43.6
1.98
%
Savings and money market accounts
14,595
119.1
3.24
18,651
88.0
1.87
Certificates of deposit
9,453
120.0
5.03
4,260
26.0
2.42
Total interest-bearing deposits
38,316
343.7
3.56
31,665
157.6
1.97
Short-term borrowings
5,492
79.4
5.74
5,440
54.8
3.99
Long-term debt
594
14.6
9.73
1,240
27.1
8.68
Qualifying debt
891
9.6
4.26
890
9.1
4.08
Total interest-bearing
liabilities
45,293
447.3
3.92
39,235
248.6
2.51
Interest cost of funding earning
assets
2.72
1.52
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
17,579
23,729
Other liabilities
1,330
1,296
Stockholders’ equity
5,780
5,233
Total liabilities and stockholders'
equity
$
69,982
$
69,493
Net interest income and margin (4)
$
591.7
3.65
%
$
639.7
3.98
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $9.1 million and $9.0 million for the three months ended
December 31, 2023 and 2022, respectively.
(2)
Included in the yield computation are net
loan fees of $30.8 million and $34.8 million for the three months
ended December 31, 2023 and 2022, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Year Ended
December 31, 2023
December 31, 2022
Average Balance
Interest
Average Yield /
Cost
Average Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans HFS
$
3,347
$
213.4
6.38
%
$
4,364
$
180.3
4.13
%
Loans HFI:
Commercial and industrial
17,886
1,337.9
7.54
20,083
1,002.8
5.05
CRE - non-owner occupied
9,736
734.8
7.56
7,769
416.4
5.37
CRE - owner occupied
1,800
102.3
5.79
1,841
93.2
5.16
Construction and land development
4,498
419.7
9.33
3,426
229.1
6.69
Residential real estate
15,126
596.4
3.94
13,771
468.5
3.40
Consumer
72
5.2
7.23
61
3.1
5.07
Total loans HFI (1), (2), (3)
49,118
3,196.3
6.53
46,951
2,213.1
4.74
Securities:
Securities - taxable
8,002
381.3
4.76
6,325
195.3
3.09
Securities - tax-exempt
2,097
86.2
5.15
2,067
77.3
4.68
Total securities (1)
10,099
467.5
4.84
8,392
272.6
3.48
Other
2,848
158.1
5.55
1,574
25.8
1.64
Total interest earning assets
(4)
65,412
4,035.3
6.22
61,281
2,691.8
4.45
Non-interest earning assets
Cash and due from banks
273
260
Allowance for credit losses
(326
)
(280
)
Bank owned life insurance
183
180
Other assets
4,581
3,948
Total assets
$
70,123
$
65,389
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
12,422
$
352.0
2.83
%
$
8,331
$
78.8
0.95
%
Savings and money market accounts
14,903
428.1
2.87
18,518
158.6
0.86
Certificates of deposit
7,945
362.5
4.56
2,772
39.0
1.40
Total interest-bearing deposits
35,270
1,142.6
3.24
29,621
276.4
0.93
Short-term borrowings
7,800
434.6
5.57
3,424
92.1
2.69
Long-term debt
862
81.3
9.43
1,008
72.0
7.14
Qualifying debt
892
37.9
4.25
893
35.0
3.92
Total interest-bearing
liabilities
44,824
1,696.4
3.78
34,946
475.5
1.36
Interest cost of funding earning
assets
2.59
0.78
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
18,293
24,133
Other liabilities
1,287
1,211
Stockholders’ equity
5,719
5,099
Total liabilities and stockholders'
equity
$
70,123
$
65,389
Net interest income and margin (5)
$
2,338.9
3.63
%
$
2,216.3
3.67
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $35.5 million and $33.7 million for the year ended December 31,
2023 and 2022, respectively.
(2)
Included in the yield computation are net
loan fees of $131.2 million and $132.2 million for the year ended
December 31, 2023 and 2022, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate & Other
At December 31, 2023:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
14,569
$
13
$
125
$
14,431
Loans HFS
1,402
—
1,402
—
Loans HFI, net of deferred fees and
costs
50,297
29,136
21,161
—
Less: allowance for credit losses
(337
)
(284
)
(53
)
—
Net loans HFI
49,960
28,852
21,108
—
Other assets acquired through foreclosure,
net
8
8
—
—
Goodwill and other intangible assets,
net
669
292
377
—
Other assets
4,254
390
1,826
2,038
Total assets
$
70,862
$
29,555
$
24,838
$
16,469
Liabilities:
Deposits
$
55,333
$
23,897
$
24,925
$
6,511
Borrowings and qualifying debt
8,125
7
402
7,716
Other liabilities
1,326
109
338
879
Total liabilities
64,784
24,013
25,665
15,106
Allocated equity:
6,078
2,555
1,300
2,223
Total liabilities and stockholders'
equity
$
70,862
$
26,568
$
26,965
$
17,329
Excess funds provided (used)
—
(2,987
)
2,127
860
No. of offices
57
46
8
3
No. of full-time equivalent employees
3,260
584
711
1,965
Income Statement:
Three Months Ended December 31,
2023:
(in millions)
Net interest income
$
591.7
$
309.9
$
251.1
$
30.7
Provision for (recovery of) credit
losses
9.3
8.6
2.9
(2.2
)
Net interest income after provision for
credit losses
582.4
301.3
248.2
32.9
Non-interest income
90.5
16.8
60.3
13.4
Non-interest expense
461.9
149.7
232.9
79.3
Income (loss) before income taxes
211.0
168.4
75.6
(33.0
)
Income tax expense (benefit)
63.1
49.7
19.8
(6.4
)
Net income (loss)
$
147.9
$
118.7
$
55.8
$
(26.6
)
Year Ended December 31, 2023:
(in millions)
Net interest income
$
2,338.9
$
1,387.4
$
898.9
$
52.6
Provision for credit losses
62.6
38.3
3.3
21.0
Net interest income after provision for
credit losses
2,276.3
1,349.1
895.6
31.6
Non-interest income
280.7
(23.3
)
286.9
17.1
Non-interest expense
1,623.4
580.6
924.5
118.3
Income (loss) before provision for income
taxes
933.6
745.2
258.0
(69.6
)
Income tax expense (benefit)
211.2
174.8
59.2
(22.8
)
Net income (loss)
$
722.4
$
570.4
$
198.8
$
(46.8
)
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate & Other
At December 31, 2022:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
9,803
$
12
$
—
$
9,791
Loans held for sale
1,184
—
1,184
—
Loans, net of deferred fees and costs
51,862
31,414
20,448
—
Less: allowance for credit losses
(310
)
(262
)
(48
)
—
Total loans
51,552
31,152
20,400
—
Other assets acquired through foreclosure,
net
11
11
—
—
Goodwill and other intangible assets,
net
680
293
387
—
Other assets
4,504
435
2,180
1,889
Total assets
$
67,734
$
31,903
$
24,151
$
11,680
Liabilities:
Deposits
$
53,644
$
29,494
$
18,492
$
5,658
Borrowings and qualifying debt
7,192
27
340
6,825
Other liabilities
1,542
83
656
803
Total liabilities
62,378
29,604
19,488
13,286
Allocated equity:
5,356
2,684
1,691
981
Total liabilities and stockholders'
equity
$
67,734
$
32,288
$
21,179
$
14,267
Excess funds provided (used)
—
385
(2,972
)
2,587
No. of offices
56
46
8
2
No. of full-time equivalent employees
3,365
671
785
1,909
Income Statement:
Three Months Ended December 31,
2022:
(in millions)
Net interest income
$
639.7
$
428.0
$
216.4
$
(4.7
)
Provision for (recovery of) credit
losses
3.1
(5.9
)
8.2
0.8
Net interest income (expense) after
provision for credit losses
636.6
433.9
208.2
(5.5
)
Non-interest income
61.5
8.7
49.2
3.6
Non-interest expense
333.4
122.1
187.6
23.7
Income (loss) before income taxes
364.7
320.5
69.8
(25.6
)
Income tax expense (benefit)
71.7
76.1
16.3
(20.7
)
Net income (loss)
$
293.0
$
244.4
$
53.5
$
(4.9
)
Year Ended December 31, 2022:
(in millions)
Net interest income
$
2,216.3
$
1,546.3
$
854.1
$
(184.1
)
Provision for (recovery of) credit
losses
68.1
47.2
21.1
(0.2
)
Net interest income (expense) after
provision for credit losses
2,148.2
1,499.1
833.0
(183.9
)
Non-interest income
324.6
59.7
247.2
17.7
Non-interest expense
1,156.7
463.5
630.1
63.1
Income (loss) before income taxes
1,316.1
1,095.3
450.1
(229.3
)
Income tax expense (benefit)
258.8
260.5
107.1
(108.8
)
Net income (loss)
$
1,057.3
$
834.8
$
343.0
$
(120.5
)
Western Alliance Bancorporation and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Unaudited
Pre-Provision Net Revenue by
Quarter:
Three Months Ended
12/31/2023
9/30/2023
6/30/2023
3/31/2023
12/31/2022
(in millions)
Net interest income
$
591.7
$
587.0
$
550.3
$
609.9
$
639.7
Total non-interest income
90.5
129.2
119.0
(58.0
)
61.5
Net revenue
$
682.2
$
716.2
$
669.3
$
551.9
$
701.2
Total non-interest expense
461.9
426.2
387.4
347.9
333.4
Pre-provision net revenue (1)
$
220.3
$
290.0
$
281.9
$
204.0
$
367.8
Less:
Provision for credit losses
9.3
12.1
21.8
19.4
3.1
Income tax expense
63.1
61.3
44.4
42.4
71.7
Net income
$
147.9
$
216.6
$
215.7
$
142.2
$
293.0
Pre-Provision Net Revenue, Excluding Notable Items
Three Months Ended 12/31/2023:
(in millions)
Pre-provision net revenue (1)
$
220.3
Excluding notable items:
Non-interest income
MSR fair value adjustments and sales, net
of hedging
25.3
Loss on sales of HFI loans
3.7
Outsized solar investment gains
(8.0
)
Loss on sales of investment securities
14.8
Non-interest expense
FDIC special assessment
66.3
Gain on extinguishment of debt
(39.3
)
Total notable items
62.8
Pre-provision net revenue, excluding
notable items (1)
$
283.1
Less:
Provision for credit losses
9.3
Income tax expense
63.1
Total notable items
62.8
Net income
$
147.9
Three Months Ended
12/31/2023
9/30/2023
6/30/2023
3/31/2023
12/31/2022
Efficiency Ratio (Tax Equivalent Basis)
by Quarter:
(dollars in millions)
Total non-interest expense
$
461.9
$
426.2
$
387.4
$
347.9
$
333.4
Less: Deposit costs
131.0
127.8
91.0
86.9
82.2
Total non-interest expense, excluding
deposit costs
330.9
298.4
296.4
261.0
251.2
Divided by:
Total net interest income
591.7
587.0
550.3
609.9
639.7
Plus:
Tax equivalent interest adjustment
9.1
8.9
8.7
8.8
9.0
Total non-interest income
90.5
129.2
119.0
(58.0
)
61.5
Less: Deposit costs
131.0
127.8
91.0
86.9
82.2
$
560.3
$
597.3
$
587.0
$
473.8
$
628.0
Efficiency ratio (2)
66.8
%
58.8
%
57.1
%
62.0
%
46.9
%
Efficiency ratio, adjusted for deposit
costs (2)
59.1
%
50.0
%
50.5
%
55.1
%
40.0
%
Western Alliance Bancorporation and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Unaudited
Earnings per Share, Excluding Notable
Items:
Three Months Ended 12/31/2023:
(in millions)
Net income available to common
stockholders
$
144.7
Excluding:
Total notable items (4)
62.8
Income tax
Tax effect of notable items
(14.4
)
Elevated effective tax rate
14.6
Net income available to common
stockholders, excluding notable items
$
207.7
Diluted shares
108.7
Diluted earnings per share, excluding
notable items (1)
$
1.91
Tangible Common Equity:
12/31/2023
9/30/2023
6/30/2023
3/31/2023
12/31/2022
(dollars and shares in
millions)
Total stockholders' equity
$
6,078
$
5,746
$
5,685
$
5,521
$
5,356
Less:
Goodwill and intangible assets
669
672
674
677
680
Preferred stock
295
295
295
295
295
Total tangible common equity
5,114
4,779
4,716
4,549
4,381
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
2
Total tangible common equity, net of
tax
$
5,116
$
4,781
$
4,718
$
4,551
$
4,383
Total assets
$
70,862
$
70,891
$
68,160
$
71,047
$
67,734
Less: goodwill and intangible assets,
net
669
672
674
677
680
Tangible assets
70,193
70,219
67,486
70,370
67,054
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
2
Total tangible assets, net of
tax
$
70,195
$
70,221
$
67,488
$
70,372
$
67,056
Tangible common equity ratio (3)
7.3
%
6.8
%
7.0
%
6.5
%
6.5
%
Common shares outstanding
109.5
109.5
109.5
109.5
108.9
Tangible book value per share, net of tax
(3)
$
46.72
$
43.66
$
43.09
$
41.56
$
40.25
Return on Average Tangible Common
Equity, Excluding Notable Items:
Three Months Ended 12/31/2023:
(in millions)
Net income available to common
shareholders, excluding notable items
$
207.7
Divided by:
Average stockholders' equity
$
5,780
Less:
Average goodwill and intangible assets
670
Average preferred stock
295
Average tangible common equity
$
4,816
Return on average tangible common
equity, excluding notable items (1)
17.1
%
Return on Average Assets, Excluding
Notable Items:
Three Months Ended 12/31/2023:
(in millions)
Net income
$
147.9
Excluding:
Total notable items (4)
62.8
Income tax
Tax effect of notable items
(14.4
)
Elevated effective tax rate
14.6
Net income, excluding notable
items
$
210.9
Divided by:
Average assets
$
69,982
Return on average assets, excluding
notable items (1)
1.20
%
Non-GAAP Financial Measures Footnotes
(1)
We believe this non-GAAP measurement is a
key indicator of the earnings power of the Company.
(2)
We believe this non-GAAP ratio provides a
useful metric to measure the efficiency of the Company.
(3)
We believe this non-GAAP metric provides
an important metric with which to analyze and evaluate the
financial condition and capital strength of the Company.
(4)
See reconciliation of PPNR, excluding
notable items, for additional detail regarding the components of
notable items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240124805047/en/
Western Alliance Bancorporation Dale Gibbons, 602-952-5476
Western Alliance Bancorp... (NYSE:WAL)
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De Jan 2025 à Fév 2025
Western Alliance Bancorp... (NYSE:WAL)
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