WAL Western Alliance Bancorporation

Western Alliance Bancorporation (NYSE:WAL):

SECOND QUARTER 2024 FINANCIAL RESULTS

Quarter Highlights:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

Earnings per share

 

PPNR1

 

Net interest margin

 

Efficiency ratio

 

Book value per

common share

$193.6 million

 

$1.75

 

$285.0 million

 

3.63%

 

62.3%

 

$54.80

 

 

 

 

51.5%1, adjusted for deposit costs

 

$48.791, excluding

goodwill and intangibles

CEO COMMENTARY:

“Western Alliance delivered strong second quarter results featuring robust net interest income growth, gathering loan momentum, and sustained deposit generation,” said Kenneth A. Vecchione, President and Chief Executive Officer. “With balance sheet repositioning actions completed, our focus is rededicated to generating safe, sound risk-adjusted growth supported by an enhanced liquidity profile and sturdy capital base. We achieved net income of $193.6 million and earnings per share of $1.75 for the second quarter 2024, which resulted in a return on tangible common equity1 of 14.3%. Capital generation continued to improve as pre-provision net revenue1 grew 22% linked quarter annualized excluding the impact of the FDIC special assessment.. Tangible book value per share1 climbed 13.2% year-over-year to $48.79 with a CET1 ratio of 11.0%.”

LINKED-QUARTER BASIS

YEAR-OVER-YEAR

  FINANCIAL HIGHLIGHTS:

• Net income of $193.6 million and earnings per share of $1.75, up 9.1% and 9.4%, from $177.4 million and $1.60, respectively

• Net income of $193.6 million and earnings per share of $1.75, down 10.2% and 10.7%, from $215.7 million and $1.96, respectively

• Net revenue of $771.8 million, an increase of 5.9%, or $43.0 million, compared to an increase in non-interest expenses of 1.0%, or $5.0 million

• Net revenue of $771.8 million, an increase of 15.3%, or $102.5 million, compared to an increase in non-interest expenses of 25.7%, or $99.4 million

• Pre-provision net revenue1 of $285.0 million, up $38.0 million from $247.0 million

• Pre-provision net revenue1 of $285.0 million, up $3.1 million from $281.9 million

• Effective tax rate of 21.9%, compared to 23.5%

• Effective tax rate of 21.9%, compared to 17.1%

  FINANCIAL POSITION RESULTS:

• HFI loans of $52.4 billion, up $1.7 billion, or 3.4%

• Increase in HFI loans of $4.6 billion, or 9.5%

• Total deposits of $66.2 billion, up $4.0 billion, or 6.5%

• Increase in total deposits of $15.2 billion, or 29.8%

• HFI loan-to-deposit ratio of 79.1%, down from 81.5%

• HFI loan-to-deposit ratio of 79.1%, down from 93.8%

• Stockholders' equity of $6.3 billion, up $162 million

• Increase in stockholders' equity of $649 million

  LOANS AND ASSET QUALITY:

• Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.51%, compared to 0.53%

• Nonperforming assets to total assets of 0.51%, compared to 0.39%

• Annualized net loan charge-offs to average loans outstanding of 0.18%, compared to 0.08%

• Annualized net loan charge-offs to average loans outstanding of 0.18%, compared to 0.06%

  KEY PERFORMANCE METRICS:

• Net interest margin of 3.63%, compared to 3.60%

• Net interest margin of 3.63% increased from 3.42%

• Return on average assets and on tangible common equity1 of 0.99% and 14.3%, compared to 0.98% and 13.4%, respectively

• Return on average assets and on tangible common equity1 of 0.99% and 14.3%, compared to 1.23% and 18.2%, respectively

• Tangible common equity ratio1 of 6.7%, compared to 6.8%

• Tangible common equity ratio1 of 6.7% increased from 7.0%

• CET 1 ratio of 11.0%, compared to 11.0%

• CET 1 ratio of 11.0%, compared to 10.1%

• Tangible book value per share1, net of tax, of $48.79, an increase of 3.2% from $47.30

• Tangible book value per share1, net of tax, of $48.79, an increase of 13.2% from $43.09

• Adjusted efficiency ratio1 of 51.5%, compared to 57.3%

• Adjusted efficiency ratio1 of 51.5%, compared to 50.5%

1

See reconciliation of Non-GAAP Financial Measures.

Income Statement

Net interest income totaled $656.6 million in the second quarter 2024, an increase of $57.7 million, or 9.6%, from $598.9 million in the first quarter 2024, and an increase of $106.3 million, or 19.3%, compared to the second quarter 2023. The increase in net interest income from the first quarter 2024 is due to an increase in average securities and HFI loan balances, partially offset by an increase in deposit balances and rates. The increase in net interest income from the second quarter 2023 was driven by an increase in average securities balances and higher HFI loan balances and yields, coupled with a decrease in the average short-term borrowings balance. These increases were partially offset by higher balances and rates on deposits and a lower average HFS loan balance.

The Company recorded a provision for credit losses of $37.1 million in the second quarter 2024, an increase of $21.9 million from $15.2 million in the first quarter 2024, and an increase of $15.3 million from $21.8 million in the second quarter 2023. The provision for credit losses during the second quarter 2024 is primarily reflective of loan growth and net-charge offs of $22.8 million.

The Company’s net interest margin in the second quarter 2024 was 3.63%, an increase from 3.60% in the first quarter 2024, and an increase from 3.42% in the second quarter 2023. The increase in net interest margin from the first quarter 2024 was driven by growth in average earning asset balances outpacing interest-bearing deposits. The increase in net interest margin from the second quarter 2023 was driven by higher average HFI loan and securities balances and a decrease in average short-term borrowings, partially offset by higher average deposit balances.

Non-interest income was $115.2 million for the second quarter 2024, compared to $129.9 million for the first quarter 2024, and $119.0 million for the second quarter 2023. The $14.7 million decrease in non-interest income from the first quarter 2024 was primarily due to a decrease of $12.9 million in income from equity investments and $8.3 million in net loan servicing revenue due to lower fair value changes partially offset by higher servicing income. These changes were partially offset by gains on sales of investment securities which were $3.2 million higher than the previous quarter and a $1.5 million increase in net gain on loan origination and sale activities from higher volumes. The $3.8 million decrease in non-interest income from the second quarter 2023 was primarily driven by lower net gain on loan origination and sale activities and lower fair value gain adjustments, partially offset by gains on security sales in the second quarter 2024 compared to losses in the second quarter 2023 and higher net loan servicing revenue.

Net revenue totaled $771.8 million for the second quarter 2024, an increase of $43.0 million or 5.9%, compared to $728.8 million for the first quarter 2024, and an increase of $102.5 million or 15.3%, compared to $669.3 million for the second quarter 2023.

Non-interest expense was $486.8 million for the second quarter 2024, compared to $481.8 million for the first quarter 2024, and $387.4 million for the second quarter 2023. The Company’s efficiency ratio, adjusted for deposit costs1 was 51.5% for the second quarter 2024, compared to 57.3% in the first quarter 2024, and 50.5% for the second quarter 2023. The increase in non-interest expense from the first quarter 2024 is due primarily to an increase of $36.7 million in deposit costs, partially offset by a decrease in insurance cost of $25.1 million. The decrease in insurance cost is related to the FDIC special assessment as the Company recognized a $17.6 million charge during the first quarter 2024, compared to an expense reduction of $6.0 million during the second quarter 2024. The increase in non-interest expense from the second quarter 2023 is primarily attributable to an increase in deposit costs.

Income tax expense was $54.3 million for the second quarter 2024, compared to $54.4 million for the first quarter 2024, and $44.4 million for the second quarter 2023. The decrease in income tax expense from the first quarter 2024 is primarily related to the forecasted impact of bank owned life insurance purchased subsequent to quarter end. The increase in income tax expense from the second 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 partially offset by lower pre-tax income.

Net income was $193.6 million for the second quarter 2024, an increase of $16.2 million from $177.4 million for the first quarter 2024, and a decrease of $22.1 million from $215.7 million for the second quarter 2023. Earnings per share totaled $1.75 for the second quarter 2024, compared to $1.60 for the first quarter 2024, and $1.96 for the second quarter 2023.

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 second quarter 2024, the Company’s PPNR1 was $285.0 million, up $38.0 million from $247.0 million in the first quarter 2024, and up $3.1 million from $281.9 million in the second quarter 2023.

The Company had 3,310 full-time equivalent employees and 56 offices at June 30, 2024, compared to 3,312 full-time equivalent employees and 56 offices at March 31, 2024, and 3,336 full-time equivalent employees and 56 offices at June 30, 2023.

1

See reconciliation of Non-GAAP Financial Measures.

Balance Sheet

HFI loans, net of deferred fees totaled $52.4 billion at June 30, 2024, compared to $50.7 billion at March 31, 2024, and $47.9 billion at June 30, 2023. The increase in HFI loans of $1.7 billion from the prior quarter was primarily driven by an increase of $1.9 billion in commercial and industrial loans, partially offset by decreases of $179 million and $69 million in residential real estate and construction and land development loans, respectively. The increase in HFI loans of $4.6 billion from June 30, 2023 was primarily driven by increases of $5.0 billion and $284 million in commercial and industrial and construction and land development loans, respectively. This increase was partially offset by decreases of $555 million and $266 million in residential real estate and commercial real estate non-owner occupied loans, respectively. HFS loans totaled $2.0 billion at June 30, 2024, compared to $1.8 billion at March 31, 2024, and $3.2 billion at June 30, 2023. The balance of HFS loans at June 30, 2024 and March 31, 2024 primarily consisted of AmeriHome HFS loans. The increase of $166 million in HFS loans from the prior quarter is primarily related to an increase in agency conforming loans. The decrease of $1.1 billion in HFS loans from June 30, 2023 primarily related to the sale and disposition of loans during 2023 related to the Company's balance sheet repositioning strategy.

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. The allowance for loan losses to funded HFI loans ratio was 0.67% at June 30, 2024, March 31, 2024, and June 30, 2023. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.74% at June 30, 2024 and March 31, 2024 and 0.76% at June 30, 2023. 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 $8.9 billion, $9.0 billion, and $9.4 billion as of June 30, 2024, March 31, 2024, and June 30, 2023, 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 related to these pools of loans of $11.7 million as of June 30, 2024, $14.2 million as of March 31, 2024, and $21.4 million as of June 30, 2023. 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 June 30, 2024, 0.90% at March 31, 2024, and 0.94% at June 30, 2023.

Deposits totaled $66.2 billion at June 30, 2024, an increase of $4.0 billion from $62.2 billion at March 31, 2024, and an increase of $15.2 billion from $51.0 billion at June 30, 2023. By deposit type, the increase from the prior quarter is attributable to increases of $3.1 billion from non-interest bearing deposits, $893 million from savings and money market deposits and $302 million from interest-bearing demand deposits, partially offset by a $302 million decrease in certificates of deposits. From June 30, 2023, non-interest bearing deposits increased $4.8 billion, interest-bearing demand deposits increased $4.6 billion, savings and money market deposits increased $4.0 billion, and certificates of deposit increased $1.8 billion. Non-interest bearing deposits were $21.5 billion at June 30, 2024, compared to $18.4 billion at March 31, 2024, and $16.7 billion at June 30, 2023.

The table below shows the Company's deposit types as a percentage of total deposits:

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Jun 30, 2023

Non-interest bearing

 

32.5

%

 

29.6

%

 

32.8

%

Interest-bearing demand

 

26.1

 

 

27.3

 

 

24.8

 

Savings and money market

 

25.8

 

 

26.0

 

 

25.6

 

Certificates of deposit

 

15.6

 

 

17.1

 

 

16.8

 

The Company’s ratio of HFI loans to deposits was 79.1% at June 30, 2024, compared to 81.5% at March 31, 2024, and 93.8% at June 30, 2023.

Borrowings were $5.6 billion at June 30, 2024, $6.2 billion at March 31, 2024, and $9.6 billion at June 30, 2023. Borrowings decreased $634 million from March 31, 2024 primarily due to a decrease in short-term borrowings. The decrease in borrowings from June 30, 2023 is primarily due to a decrease in short-term borrowings of $3.6 billion and payoff of the AmeriHome senior notes as part of the Company's balance sheet repositioning.

Qualifying debt totaled $897 million at June 30, 2024, compared to $896 million at March 31, 2024 and $888 million June 30, 2023.

Stockholders’ equity was $6.3 billion at June 30, 2024, compared to $6.2 billion at March 31, 2024 and $5.7 billion at June 30, 2023. The increase in stockholders’ equity from the prior quarter was due to net income, partially offset by dividends to shareholders. Cash dividends of $40.8 million ($0.37 per common share) and $3.2 million ($0.27 per depository share) were paid to stockholders during the second quarter 2024. The increase in stockholders' equity from June 30, 2023 is primarily a function of net income, partially offset by dividends to stockholders.

The Company's common equity tier 1 capital ratio was 11.0% at June 30, 2024 and March 31, 2024, compared to 10.1% at June 30, 2023. At June 30, 2024, tangible common equity, net of tax1, was 6.7% of tangible assets1 and total capital was 13.9% of risk-weighted assets. The Company’s tangible book value per share1 was $48.79 at June 30, 2024, an increase of 3.2% from $47.30 at March 31, 2024, and an increase of 13.2% from $43.09 at June 30, 2023. The increase in tangible book value per share from March 31, 2024 and June 30, 2023 is attributable to net income.

Total assets increased 4.7% to $80.6 billion at June 30, 2024 from $77.0 billion at March 31, 2024, and increased 18.2% from $68.2 billion at June 30, 2023. The increase in total assets from March 31, 2024 was primarily driven by an increase in HFI loans and investment securities. The increase in total assets from June 30, 2023 was primarily driven by an increase in investment securities and HFI loans, partially offset by a decrease in HFS loans.

1

See reconciliation of Non-GAAP Financial Measures.

Asset Quality

Provision for credit losses totaled $37.1 million for the second quarter 2024, compared to $15.2 million for the first quarter 2024, and $21.8 million for the second quarter 2023. Net loan charge-offs in the second quarter 2024 totaled $22.8 million, or 0.18% of average loans (annualized), compared to $9.8 million, or 0.08%, in the first quarter 2024, and $7.4 million, or 0.06%, in the second quarter 2023.

Nonaccrual loans increased $2 million to $401 million during the quarter and increased $145 million from June 30, 2023. Loans past due 90 days and still accruing interest totaled zero at June 30, 2024, $6 million at March 31, 2024, and zero at June 30, 2023 (excluding government guaranteed loans of $330 million, $349 million, and $481 million, respectively). Loans past due 30-89 days and still accruing interest totaled $83 million at June 30, 2024, a decrease from $117 million at March 31, 2024, and a decrease from $121 million at June 30, 2023 (excluding government guaranteed loans of $221 million, $224 million, and $289 million, respectively).

Repossessed assets totaled $8 million at June 30, 2024, flat from March 31, 2024, and a decrease of $3 million from June 30, 2023. Classified assets totaled $748 million at June 30, 2024, a decrease of $33 million from $781 million at March 31, 2024, and an increase of $144 million from $604 million at June 30, 2023.

The ratio of classified assets to Tier 1 capital plus the allowance for credit losses2, a common regulatory measure of asset quality, was 11.2% at June 30, 2024, compared to 12.0% at March 31, 2024, and 10.0% at June 30, 2023.

2

The allowance for credit losses used in this ratio is calculated in accordance with regulatory capital rules.

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 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 $31.0 billion at June 30, 2024, an increase of $1.4 billion during the quarter, and an increase of $2.9 billion during the last twelve months. Loans held for sale totaled zero at June 30, 2024 and March 31, 2024, compared to $1.0 billion as of June 30, 2023 as the Company executed its balance sheet repositioning strategy. Deposits for the Commercial segment totaled $25.3 billion at June 30, 2024, an increase of $180 million during the quarter, and an increase of $3.9 billion during the last twelve months.

Pre-tax income for the Commercial segment was $128.4 million for the three months ended June 30, 2024, a decrease of $15.2 million from the three months ended March 31, 2024, and a decrease of $93.0 million from the three months ended June 30, 2023. For the six months ended June 30, 2024, the Commercial segment reported total pre-tax income of $272.1 million, a decrease of $108.8 million compared to the six months ended June 30, 2023.

The Consumer Related segment reported an HFI loan balance of $21.4 billion at June 30, 2024, an increase of $328 million during the quarter, and an increase of $1.7 billion during the last twelve months. The Consumer Related segment also had loans held for sale of $2.0 billion at June 30, 2024, an increase of $166 million during the quarter, and a decrease of $100 million during the last twelve months. Deposits for the Consumer Related segment totaled $34.5 billion, an increase of $4.0 billion during the quarter, and an increase of $12.1 billion during the last twelve months.

Pre-tax income for the Consumer Related segment was $96.8 million for the three months ended June 30, 2024, an increase of $4.0 million from the three months ended March 31, 2024, and an increase of $40.1 million from the three months ended June 30, 2023. Pre-tax income for the Consumer Related segment for the six months ended June 30, 2024 totaled $189.6 million, an increase of $76.3 million compared to the six months ended June 30, 2023.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its second quarter 2024 financial results at 12:00 p.m. ET on Friday, July 19, 2024. Participants may access the call by dialing 1-833-470-1428 and using access code 465259 or via live audio webcast using the website link https://events.q4inc.com/attendee/904562028. 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 July 19th through 11:59 p.m. ET August 19th by dialing 1-866-813-9403, using access code 719075.

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, 2023 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 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 $80 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 and receiving #1 rankings on Institutional Investor's All-America Executive Team Midcap 2023-2024 for Best CEO, Best CFO, Best Company Board of Directors and Best Investor Relations Team. 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 June 30,

 

 

 

 

 

 

 

 

2024

 

2023

 

Change %

 

 

 

 

 

 

 

 

(in millions)

 

 

Total assets

 

 

 

 

 

 

 

$

80,581

 

$

68,160

 

18.2

%

Loans held for sale

 

 

 

 

 

 

 

 

2,007

 

 

3,156

 

(36.4

)

HFI loans, net of deferred fees

 

 

 

 

 

 

 

 

52,430

 

 

47,875

 

9.5

 

Investment securities

17,268

10,131

70.4

Total deposits

 

 

 

 

 

 

 

 

66,244

 

 

51,041

 

29.8

 

Borrowings

 

 

 

 

 

 

 

 

5,587

 

 

9,567

 

(41.6

)

Qualifying debt

 

 

 

 

 

 

 

 

897

 

 

888

 

1.0

 

Stockholders' equity

 

 

 

 

 

 

 

 

6,334

 

 

5,685

 

11.4

 

Tangible common equity, net of tax (1)

 

 

 

 

 

 

 

 

5,377

 

 

4,718

 

14.0

 

Common equity Tier 1 capital

 

 

 

 

 

 

 

 

5,946

 

 

5,348

 

11.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

2024

 

2023

 

Change %

 

2024

 

2023

 

Change %

 

 

(in millions, except per share data)

 

 

 

(in millions, except per share data)

 

 

Interest income

 

$

1,147.5

 

$

1,000.8

 

14.7

%

 

$

2,202.5

 

$

1,969.7

 

11.8

%

Interest expense

 

 

490.9

 

 

450.5

 

9.0

 

 

 

947.0

 

 

809.5

 

17.0

 

Net interest income

 

 

656.6

 

 

550.3

 

19.3

 

 

 

1,255.5

 

 

1,160.2

 

8.2

 

Provision for credit losses

 

 

37.1

 

 

21.8

 

70.2

 

 

 

52.3

 

 

41.2

 

26.9

 

Net interest income after provision for credit losses

 

 

619.5

 

 

528.5

 

17.2

 

 

 

1,203.2

 

 

1,119.0

 

7.5

 

Non-interest income

 

 

115.2

 

 

119.0

 

(3.2

)

 

 

245.1

 

 

61.0

 

NM

 

Non-interest expense

 

 

486.8

 

 

387.4

 

25.7

 

 

 

968.6

 

 

735.3

 

31.7

 

Income before income taxes

 

 

247.9

 

 

260.1

 

(4.7

)

 

 

479.7

 

 

444.7

 

7.9

 

Income tax expense

 

 

54.3

 

 

44.4

 

22.3

 

 

 

108.7

 

 

86.8

 

25.2

 

Net income

 

 

193.6

 

 

215.7

 

(10.2

)

 

 

371.0

 

 

357.9

 

3.7

 

Dividends on preferred stock

 

 

3.2

 

 

3.2

 

—

 

 

 

6.4

 

 

6.4

 

—

 

Net income available to common stockholders

 

$

190.4

 

$

212.5

 

(10.4

)

 

$

364.6

 

$

351.5

 

3.7

 

Diluted earnings per common share

 

$

1.75

 

$

1.96

 

(10.7

)

 

$

3.34

 

$

3.24

 

3.1

 

(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 June 30,

 

For the Six Months Ended June 30,

 

 

2024

 

2023

 

Change %

 

2024

 

2023

 

Change %

Diluted earnings per common share

 

$

1.75

 

$

1.96

 

(10.7

)%

 

$

3.34

 

$

3.24

 

3.1

%

Book value per common share

 

 

54.80

 

 

49.22

 

11.3

 

 

 

 

 

 

 

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

 

 

48.79

 

 

43.09

 

13.2

 

 

 

 

 

 

 

Average common shares outstanding

(in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

108.6

 

 

108.3

 

0.3

 

 

 

108.6

 

 

108.2

 

0.3

 

Diluted

 

 

109.1

 

 

108.3

 

0.8

 

 

 

109.1

 

 

108.3

 

0.7

 

Common shares outstanding

 

 

110.2

 

 

109.5

 

0.6

 

 

 

 

 

 

 

Selected Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (2)

 

0.99

%

 

1.23

%

 

(19.5

)%

 

0.99

%

 

1.02

%

 

(2.9

)%

Return on average tangible common equity (1, 2)

 

14.3

 

 

18.2

 

 

(21.4

)

 

13.8

 

 

15.2

 

 

(9.2

)

Net interest margin (2)

 

3.63

 

 

3.42

 

 

6.1

 

 

3.61

 

 

3.60

 

 

0.3

 

Efficiency ratio, adjusted for deposit costs (1)

 

51.5

 

 

50.5

 

 

2.0

 

 

54.4

 

 

52.5

 

 

3.6

 

HFI loan to deposit ratio

 

79.1

 

 

93.8

 

 

(15.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans outstanding (2)

 

0.18

%

 

0.06

%

 

NM

 

 

0.13

%

 

0.05

%

 

NM

 

Nonaccrual loans to funded HFI loans

 

0.76

 

 

0.53

 

 

43.4

 

 

 

 

 

 

 

Nonaccrual loans and repossessed assets to total assets

 

0.51

 

 

0.39

 

 

30.8

 

 

 

 

 

 

 

Allowance for loan losses to funded HFI loans

 

0.67

 

 

0.67

 

 

—

 

 

 

 

 

 

 

Allowance for loan losses to nonaccrual HFI loans

 

88

 

 

125

 

 

(29.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Jun 30, 2023

Tangible common equity (1)

 

6.7

%

 

6.8

%

 

7.0

%

Common Equity Tier 1 (3)

 

11.0

 

 

11.0

 

 

10.1

 

Tier 1 Leverage ratio (3)

 

8.0

 

 

8.5

 

 

8.1

 

Tier 1 Capital (3)

 

11.7

 

 

11.7

 

 

10.8

 

Total Capital (3)

 

13.9

 

 

14.0

 

 

13.0

 

(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 June 30, 2024 are preliminary.

NM

Changes +/- 100% are not meaningful.

Western Alliance Bancorporation and Subsidiaries

Condensed Consolidated Income Statements

Unaudited

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

(dollars in millions, except per share data)

Interest income:

 

 

 

 

 

 

 

 

Loans

 

$

896.7

 

 

$

857.2

 

 

$

1,768.6

 

 

$

1,689.9

 

Investment securities

 

 

190.5

 

 

 

112.4

 

 

 

334.5

 

 

 

208.5

 

Other

 

 

60.3

 

 

 

31.2

 

 

 

99.4

 

 

 

71.3

 

Total interest income

 

 

1,147.5

 

 

 

1,000.8

 

 

 

2,202.5

 

 

 

1,969.7

 

Interest expense:

 

 

 

 

 

 

 

 

Deposits

 

 

410.3

 

 

 

251.1

 

 

 

790.9

 

 

 

482.7

 

Qualifying debt

 

 

9.6

 

 

 

9.5

 

 

 

19.1

 

 

 

18.8

 

Borrowings

 

 

71.0

 

 

 

189.9

 

 

 

137.0

 

 

 

308.0

 

Total interest expense

 

 

490.9

 

 

 

450.5

 

 

 

947.0

 

 

 

809.5

 

Net interest income

 

 

656.6

 

 

 

550.3

 

 

 

1,255.5

 

 

 

1,160.2

 

Provision for credit losses

 

 

37.1

 

 

 

21.8

 

 

 

52.3

 

 

 

41.2

 

Net interest income after provision for credit losses

 

 

619.5

 

 

 

528.5

 

 

 

1,203.2

 

 

 

1,119.0

 

Non-interest income:

 

 

 

 

 

 

 

 

Net gain on loan origination and sale activities

 

 

46.8

 

 

 

62.3

 

 

 

92.1

 

 

 

93.7

 

Net loan servicing revenue

 

 

38.1

 

 

 

24.1

 

 

 

84.5

 

 

 

66.0

 

Service charges and fees

 

 

10.8

 

 

 

20.8

 

 

 

20.7

 

 

 

30.3

 

Commercial banking related income

 

 

6.7

 

 

 

6.0

 

 

 

13.2

 

 

 

12.2

 

Income from equity investments

 

 

4.2

 

 

 

0.7

 

 

 

21.3

 

 

 

2.1

 

Gain (loss) on sales of investment securities

 

 

2.3

 

 

 

(13.6

)

 

 

1.4

 

 

 

(26.1

)

Fair value gain (loss) adjustments, net

 

 

0.7

 

 

 

12.7

 

 

 

1.0

 

 

 

(135.1

)

(Loss) gain on recovery from credit guarantees

 

 

(2.5

)

 

 

1.2

 

 

 

(3.0

)

 

 

4.5

 

Other

 

 

8.1

 

 

 

4.8

 

 

 

13.9

 

 

 

13.4

 

Total non-interest income

 

 

115.2

 

 

 

119.0

 

 

 

245.1

 

 

 

61.0

 

Non-interest expenses:

 

 

 

 

 

 

 

 

Deposit costs

 

 

173.7

 

 

 

91.0

 

 

 

310.7

 

 

 

177.9

 

Salaries and employee benefits

 

 

153.0

 

 

 

145.6

 

 

 

307.9

 

 

 

294.5

 

Data processing

 

 

35.7

 

 

 

28.6

 

 

 

71.7

 

 

 

55.0

 

Insurance

 

 

33.8

 

 

 

33.0

 

 

 

92.7

 

 

 

48.7

 

Legal, professional, and directors' fees

 

 

25.8

 

 

 

26.4

 

 

 

55.9

 

 

 

49.5

 

Occupancy

 

 

18.4

 

 

 

15.4

 

 

 

35.9

 

 

 

31.9

 

Loan servicing expenses

 

 

16.6

 

 

 

18.4

 

 

 

31.6

 

 

 

32.2

 

Business development and marketing

 

 

6.4

 

 

 

5.0

 

 

 

11.9

 

 

 

10.2

 

Loan acquisition and origination expenses

 

 

5.1

 

 

 

5.6

 

 

 

9.9

 

 

 

10.0

 

Net (gain) loss on sales and valuations of repossessed and other assets

 

 

(1.2

)

 

 

0.5

 

 

 

(1.6

)

 

 

0.5

 

Gain on extinguishment of debt

 

 

—

 

 

 

(0.7

)

 

 

—

 

 

 

(13.4

)

Other

 

 

19.5

 

 

 

18.6

 

 

 

42.0

 

 

 

38.3

 

Total non-interest expense

 

 

486.8

 

 

 

387.4

 

 

 

968.6

 

 

 

735.3

 

Income before income taxes

 

 

247.9

 

 

 

260.1

 

 

 

479.7

 

 

 

444.7

 

Income tax expense

 

 

54.3

 

 

 

44.4

 

 

 

108.7

 

 

 

86.8

 

Net income

 

 

193.6

 

 

 

215.7

 

 

 

371.0

 

 

 

357.9

 

Dividends on preferred stock

 

 

3.2

 

 

 

3.2

 

 

 

6.4

 

 

 

6.4

 

Net income available to common stockholders

 

$

190.4

 

 

$

212.5

 

 

$

364.6

 

 

$

351.5

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Diluted shares

 

 

109.1

 

 

 

108.3

 

 

 

109.1

 

 

 

108.3

 

Diluted earnings per share

 

$

1.75

 

 

$

1.96

 

 

$

3.34

 

 

$

3.24

 

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Income Statements

Unaudited

 

 

 

Three Months Ended

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

 

(in millions, except per share data)

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

896.7

 

 

$

871.9

 

 

$

859.0

 

 

$

860.8

 

 

$

857.2

 

Investment securities

 

 

190.5

 

 

 

144.0

 

 

 

136.2

 

 

 

122.8

 

 

 

112.4

 

Other

 

 

60.3

 

 

 

39.1

 

 

 

43.8

 

 

 

43.0

 

 

 

31.2

 

Total interest income

 

 

1,147.5

 

 

 

1,055.0

 

 

 

1,039.0

 

 

 

1,026.6

 

 

 

1,000.8

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

410.3

 

 

 

380.6

 

 

 

343.7

 

 

 

316.2

 

 

 

251.1

 

Qualifying debt

 

 

9.6

 

 

 

9.5

 

 

 

9.6

 

 

 

9.5

 

 

 

9.5

 

Borrowings

 

 

71.0

 

 

 

66.0

 

 

 

94.0

 

 

 

113.9

 

 

 

189.9

 

Total interest expense

 

 

490.9

 

 

 

456.1

 

 

 

447.3

 

 

 

439.6

 

 

 

450.5

 

Net interest income

 

 

656.6

 

 

 

598.9

 

 

 

591.7

 

 

 

587.0

 

 

 

550.3

 

Provision for credit losses

 

 

37.1

 

 

 

15.2

 

 

 

9.3

 

 

 

12.1

 

 

 

21.8

 

Net interest income after provision for credit losses

 

 

619.5

 

 

 

583.7

 

 

 

582.4

 

 

 

574.9

 

 

 

528.5

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

Net gain on loan origination and sale activities

 

 

46.8

 

 

 

45.3

 

 

 

47.8

 

 

 

52.0

 

 

 

62.3

 

Net loan servicing revenue

 

 

38.1

 

 

 

46.4

 

 

 

9.1

 

 

 

27.2

 

 

 

24.1

 

Service charges and fees

 

 

10.8

 

 

 

9.9

 

 

 

22.7

 

 

 

23.3

 

 

 

20.8

 

Commercial banking related income

 

 

6.7

 

 

 

6.5

 

 

 

5.9

 

 

 

5.6

 

 

 

6.0

 

Income from equity investments

 

 

4.2

 

 

 

17.1

 

 

 

13.1

 

 

 

0.5

 

 

 

0.7

 

Gain (loss) on sales of investment securities

 

 

2.3

 

 

 

(0.9

)

 

 

(14.8

)

 

 

0.1

 

 

 

(13.6

)

Fair value gain (loss) adjustments, net

 

 

0.7

 

 

 

0.3

 

 

 

1.3

 

 

 

17.8

 

 

 

12.7

 

(Loss) gain on recovery from credit guarantees

 

 

(2.5

)

 

 

(0.5

)

 

 

(2.7

)

 

 

(4.0

)

 

 

1.2

 

Other

 

 

8.1

 

 

 

5.8

 

 

 

8.1

 

 

 

6.7

 

 

 

4.8

 

Total non-interest income

 

 

115.2

 

 

 

129.9

 

 

 

90.5

 

 

 

129.2

 

 

 

119.0

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

Deposit costs

 

 

173.7

 

 

 

137.0

 

 

 

131.0

 

 

 

127.8

 

 

 

91.0

 

Salaries and employee benefits

 

 

153.0

 

 

 

154.9

 

 

 

134.6

 

 

 

137.2

 

 

 

145.6

 

Data processing

 

 

35.7

 

 

 

36.0

 

 

 

33.1

 

 

 

33.9

 

 

 

28.6

 

Insurance

 

 

33.8

 

 

 

58.9

 

 

 

108.6

 

 

 

33.1

 

 

 

33.0

 

Legal, professional, and directors' fees

 

 

25.8

 

 

 

30.1

 

 

 

29.4

 

 

 

28.3

 

 

 

26.4

 

Occupancy

 

 

18.4

 

 

 

17.5

 

 

 

16.9

 

 

 

16.8

 

 

 

15.4

 

Loan servicing expenses

 

 

16.6

 

 

 

15.0

 

 

 

14.7

 

 

 

11.9

 

 

 

18.4

 

Business development and marketing

 

 

6.4

 

 

 

5.5

 

 

 

6.7

 

 

 

4.9

 

 

 

5.0

 

Loan acquisition and origination expenses

 

 

5.1

 

 

 

4.8

 

 

 

4.8

 

 

 

5.6

 

 

 

5.6

 

Net (gain) loss on sales and valuations of repossessed and other assets

 

 

(1.2

)

 

 

(0.4

)

 

 

0.3

 

 

 

2.2

 

 

 

0.5

 

Gain on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

(39.3

)

 

 

—

 

 

 

(0.7

)

Other

 

 

19.5

 

 

 

22.5

 

 

 

21.1

 

 

 

24.5

 

 

 

18.6

 

Total non-interest expense

 

 

486.8

 

 

 

481.8

 

 

 

461.9

 

 

 

426.2

 

 

 

387.4

 

Income before income taxes

 

 

247.9

 

 

 

231.8

 

 

 

211.0

 

 

 

277.9

 

 

 

260.1

 

Income tax expense

 

 

54.3

 

 

 

54.4

 

 

 

63.1

 

 

 

61.3

 

 

 

44.4

 

Net income

 

 

193.6

 

 

 

177.4

 

 

 

147.9

 

 

 

216.6

 

 

 

215.7

 

Dividends on preferred stock

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

Net income available to common stockholders

 

$

190.4

 

 

$

174.2

 

 

$

144.7

 

 

$

213.4

 

 

$

212.5

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

Diluted shares

 

 

109.1

 

 

 

109.0

 

 

 

108.7

 

 

 

108.5

 

 

 

108.3

 

Diluted earnings per share

 

$

1.75

 

 

$

1.60

 

 

$

1.33

 

 

$

1.97

 

 

$

1.96

 

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Balance Sheets

Unaudited

 

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

 

(in millions)

Assets:

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

4,077

 

 

$

3,550

 

 

$

1,576

 

 

$

3,497

 

 

$

2,153

 

Investment securities

 

 

17,268

 

 

 

16,092

 

 

 

12,712

 

 

 

11,204

 

 

 

10,131

 

Loans held for sale

 

 

2,007

 

 

 

1,841

 

 

 

1,402

 

 

 

1,766

 

 

 

3,156

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

21,690

 

 

 

19,749

 

 

 

19,103

 

 

 

18,344

 

 

 

16,657

 

Commercial real estate - non-owner occupied

 

 

9,647

 

 

 

9,637

 

 

 

9,650

 

 

 

9,810

 

 

 

9,913

 

Commercial real estate - owner occupied

 

 

1,886

 

 

 

1,859

 

 

 

1,810

 

 

 

1,771

 

 

 

1,805

 

Construction and land development

 

 

4,712

 

 

 

4,781

 

 

 

4,889

 

 

 

4,669

 

 

 

4,428

 

Residential real estate

 

 

14,445

 

 

 

14,624

 

 

 

14,778

 

 

 

14,779

 

 

 

15,000

 

Consumer

 

 

50

 

 

 

50

 

 

 

67

 

 

 

74

 

 

 

72

 

Loans HFI, net of deferred fees

 

 

52,430

 

 

 

50,700

 

 

 

50,297

 

 

 

49,447

 

 

 

47,875

 

Allowance for loan losses

 

 

(352

)

 

 

(340

)

 

 

(337

)

 

 

(327

)

 

 

(321

)

Loans HFI, net of deferred fees and allowance

 

 

52,078

 

 

 

50,360

 

 

 

49,960

 

 

 

49,120

 

 

 

47,554

 

Mortgage servicing rights

 

 

1,145

 

 

 

1,178

 

 

 

1,124

 

 

 

1,233

 

 

 

1,007

 

Premises and equipment, net

 

 

351

 

 

 

344

 

 

 

339

 

 

 

327

 

 

 

315

 

Operating lease right-of-use asset

 

 

133

 

 

 

139

 

 

 

145

 

 

 

150

 

 

 

151

 

Other assets acquired through foreclosure, net

 

 

8

 

 

 

8

 

 

 

8

 

 

 

8

 

 

 

11

 

Bank owned life insurance

 

 

187

 

 

 

187

 

 

 

186

 

 

 

184

 

 

 

184

 

Goodwill and other intangibles, net

 

 

664

 

 

 

666

 

 

 

669

 

 

 

672

 

 

 

674

 

Other assets

 

 

2,663

 

 

 

2,624

 

 

 

2,741

 

 

 

2,730

 

 

 

2,824

 

Total assets

 

$

80,581

 

 

$

76,989

 

 

$

70,862

 

 

$

70,891

 

 

$

68,160

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

21,522

 

 

$

18,399

 

 

$

14,520

 

 

$

17,991

 

 

$

16,733

 

Interest bearing:

 

 

 

 

 

 

 

 

 

 

Demand

 

 

17,267

 

 

 

16,965

 

 

 

15,916

 

 

 

12,843

 

 

 

12,646

 

Savings and money market

 

 

17,087

 

 

 

16,194

 

 

 

14,791

 

 

 

14,672

 

 

 

13,085

 

Certificates of deposit

 

 

10,368

 

 

 

10,670

 

 

 

10,106

 

 

 

8,781

 

 

 

8,577

 

Total deposits

 

 

66,244

 

 

 

62,228

 

 

 

55,333

 

 

 

54,287

 

 

 

51,041

 

Borrowings

 

 

5,587

 

 

 

6,221

 

 

 

7,230

 

 

 

8,745

 

 

 

9,567

 

Qualifying debt

 

 

897

 

 

 

896

 

 

 

895

 

 

 

890

 

 

 

888

 

Operating lease liability

 

 

165

 

 

 

172

 

 

 

179

 

 

 

180

 

 

 

179

 

Accrued interest payable and other liabilities

 

 

1,354

 

 

 

1,300

 

 

 

1,147

 

 

 

1,043

 

 

 

800

 

Total liabilities

 

 

74,247

 

 

 

70,817

 

 

 

64,784

 

 

 

65,145

 

 

 

62,475

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

Common stock and additional paid-in capital

 

 

2,099

 

 

 

2,087

 

 

 

2,081

 

 

 

2,073

 

 

 

2,064

 

Retained earnings

 

 

4,498

 

 

 

4,348

 

 

 

4,215

 

 

 

4,111

 

 

 

3,937

 

Accumulated other comprehensive loss

 

 

(558

)

 

 

(558

)

 

 

(513

)

 

 

(733

)

 

 

(611

)

Total stockholders' equity

 

 

6,334

 

 

 

6,172

 

 

 

6,078

 

 

 

5,746

 

 

 

5,685

 

Total liabilities and stockholders' equity

 

$

80,581

 

 

$

76,989

 

 

$

70,862

 

 

$

70,891

 

 

$

68,160

 

Western Alliance Bancorporation and Subsidiaries

Changes in the Allowance For Credit Losses on Loans

Unaudited

 

 

 

Three Months Ended

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

 

(in millions)

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

340.3

 

 

$

336.7

 

 

$

327.4

 

 

$

321.1

 

 

$

304.7

 

Provision for credit losses (1)

 

 

34.3

 

 

 

13.4

 

 

 

17.8

 

 

 

14.3

 

 

 

23.8

 

Recoveries of loans previously charged-off:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

0.1

 

 

 

0.4

 

 

 

0.7

 

 

 

0.4

 

 

 

0.7

 

Commercial real estate - non-owner occupied

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial real estate - owner occupied

 

 

—

 

 

 

—

 

 

 

0.1

 

 

 

—

 

 

 

—

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential real estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.1

 

 

 

—

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.1

 

Total recoveries

 

 

0.1

 

 

 

0.4

 

 

 

0.8

 

 

 

0.5

 

 

 

0.8

 

Loans charged-off:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

5.3

 

 

 

2.3

 

 

 

9.3

 

 

 

5.5

 

 

 

6.0

 

Commercial real estate - non-owner occupied

 

 

17.6

 

 

 

7.9

 

 

 

—

 

 

 

3.0

 

 

 

2.2

 

Commercial real estate - owner occupied

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential real estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total loans charged-off

 

 

22.9

 

 

 

10.2

 

 

 

9.3

 

 

 

8.5

 

 

 

8.2

 

Net loan charge-offs

 

 

22.8

 

 

 

9.8

 

 

 

8.5

 

 

 

8.0

 

 

 

7.4

 

Balance, end of period

 

$

351.8

 

 

$

340.3

 

 

$

336.7

 

 

$

327.4

 

 

$

321.1

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for unfunded loan commitments

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

33.1

 

 

$

31.6

 

 

$

37.9

 

 

$

41.1

 

 

$

44.8

 

Provision for (recovery of) credit losses (1)

 

 

2.8

 

 

 

1.5

 

 

 

(6.3

)

 

 

(3.2

)

 

 

(3.7

)

Balance, end of period (2)

 

$

35.9

 

 

$

33.1

 

 

$

31.6

 

 

$

37.9

 

 

$

41.1

 

 

 

 

 

 

 

 

 

 

 

 

Components of the allowance for credit losses on loans

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

351.8

 

 

$

340.3

 

 

$

336.7

 

 

$

327.4

 

 

$

321.1

 

Allowance for unfunded loan commitments

 

 

35.9

 

 

 

33.1

 

 

 

31.6

 

 

 

37.9

 

 

 

41.1

 

Total allowance for credit losses on loans

 

$

387.7

 

 

$

373.4

 

 

$

368.3

 

 

$

365.3

 

 

$

362.2

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans - annualized

 

 

0.18

%

 

 

0.08

%

 

 

0.07

%

 

 

0.07

%

 

 

0.06

%

 

 

 

 

 

 

 

 

 

 

 

Allowance ratios

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to funded HFI loans (3)

 

 

0.67

%

 

 

0.67

%

 

 

0.67

%

 

 

0.66

%

 

 

0.67

%

Allowance for credit losses to funded HFI loans (3)

 

 

0.74

 

 

 

0.74

 

 

 

0.73

 

 

 

0.74

 

 

 

0.76

 

Allowance for loan losses to nonaccrual HFI loans

 

 

88

 

 

 

85

 

 

 

123

 

 

 

138

 

 

 

125

 

Allowance for credit losses to nonaccrual HFI loans

 

 

97

 

 

 

94

 

 

 

135

 

 

 

154

 

 

 

141

 

(1)

The above tables reflect the provision for credit losses on funded and unfunded loans. There was a $0.5 million provision release on AFS investment securities and a $0.5 million provision for credit losses on HTM investment securities for the three months ended June 30, 2024. The allowance for credit losses on AFS and HTM investment securities totaled $0.8 million and $8.7 million, respectively, as of June 30, 2024.

(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 $11.7 million as of June 30, 2024 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

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

 

(in millions)

Nonaccrual loans and repossessed assets

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

401

 

 

$

399

 

 

$

273

 

 

$

237

 

 

$

256

 

Nonaccrual loans to funded HFI loans

 

 

0.76

%

 

 

0.79

%

 

 

0.54

%

 

 

0.48

%

 

 

0.53

%

Repossessed assets

 

$

8

 

 

$

8

 

 

$

8

 

 

$

8

 

 

$

11

 

Nonaccrual loans and repossessed assets to total assets

 

 

0.51

%

 

 

0.53

%

 

 

0.40

%

 

 

0.35

%

 

 

0.39

%

 

 

 

 

 

 

 

 

 

 

 

Loans Past Due

 

 

 

 

 

 

 

 

 

 

Loans past due 90 days, still accruing (1)

 

$

—

 

 

$

6

 

 

$

42

 

 

$

—

 

 

$

—

 

Loans past due 90 days, still accruing to funded HFI loans

 

 

—

%

 

 

0.01

%

 

 

0.08

%

 

 

—

%

 

 

—

%

Loans past due 30 to 89 days, still accruing (2)

 

$

83

 

 

$

117

 

 

$

164

 

 

$

189

 

 

$

121

 

Loans past due 30 to 89 days, still accruing to funded HFI loans

 

 

0.16

%

 

 

0.23

%

 

 

0.33

%

 

 

0.38

%

 

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

Other credit quality metrics

 

 

 

 

 

 

 

 

 

 

Special mention loans

 

$

532

 

 

$

394

 

 

$

641

 

 

$

668

 

 

$

694

 

Special mention loans to funded HFI loans

 

 

1.01

%

 

 

0.78

%

 

 

1.27

%

 

 

1.35

%

 

 

1.45

%

 

 

 

 

 

 

 

 

 

 

 

Classified loans on accrual

 

$

328

 

 

$

361

 

 

$

379

 

 

$

381

 

 

$

324

 

Classified loans on accrual to funded HFI loans

 

 

0.63

%

 

 

0.71

%

 

 

0.75

%

 

 

0.77

%

 

 

0.68

%

Classified assets

 

$

748

 

 

$

781

 

 

$

673

 

 

$

639

 

 

$

604

 

Classified assets to total assets

 

 

0.93

%

 

 

1.01

%

 

 

0.95

%

 

 

0.90

%

 

 

0.89

%

(1)

Excludes government guaranteed residential mortgage loans of $330 million, $349 million, $399 million, $439 million, and $481 million as of each respective date in the table above.

(2)

Excludes government guaranteed residential mortgage loans of $221 million, $224 million, $279 million, $261 million, and $289 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

 

 

June 30, 2024

 

March 31, 2024

 

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

 

($ in millions)

Interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

2,860

 

 

$

43.0

 

6.05

%

 

$

2,416

 

 

$

39.1

 

6.51

%

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

19,913

 

 

 

370.1

 

7.54

 

 

 

18,745

 

 

 

345.7

 

7.48

 

CRE - non-owner occupied

 

 

9,680

 

 

 

185.0

 

7.69

 

 

 

9,468

 

 

 

185.1

 

7.87

 

CRE - owner occupied

 

 

1,865

 

 

 

28.5

 

6.24

 

 

 

1,808

 

 

 

26.8

 

6.06

 

Construction and land development

 

 

4,740

 

 

 

112.3

 

9.53

 

 

 

4,922

 

 

 

117.1

 

9.57

 

Residential real estate

 

 

14,531

 

 

 

157.0

 

4.35

 

 

 

14,722

 

 

 

157.0

 

4.29

 

Consumer

 

 

48

 

 

 

0.8

 

6.94

 

 

 

61

 

 

 

1.1

 

7.28

 

Total HFI loans (1), (2), (3)

 

 

50,777

 

 

 

853.7

 

6.79

 

 

 

49,726

 

 

 

832.8

 

6.77

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Securities - taxable

 

 

14,029

 

 

 

166.5

 

4.77

 

 

 

10,717

 

 

 

121.1

 

4.54

 

Securities - tax-exempt

 

 

2,221

 

 

 

24.0

 

5.45

 

 

 

2,205

 

 

 

22.9

 

5.24

 

Total securities (1)

 

 

16,250

 

 

 

190.5

 

4.87

 

 

 

12,922

 

 

 

144.0

 

4.66

 

Cash and other

 

 

3,983

 

 

 

60.3

 

6.09

 

 

 

2,953

 

 

 

39.1

 

5.33

 

Total interest earning assets

 

 

73,870

 

 

 

1,147.5

 

6.30

 

 

 

68,017

 

 

 

1,055.0

 

6.29

 

Non-interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

294

 

 

 

 

 

 

 

285

 

 

 

 

 

Allowance for credit losses

 

 

(350

)

 

 

 

 

 

 

(349

)

 

 

 

 

Bank owned life insurance

 

 

187

 

 

 

 

 

 

 

186

 

 

 

 

 

Other assets

 

 

4,554

 

 

 

 

 

 

 

4,542

 

 

 

 

 

Total assets

 

$

78,555

 

 

 

 

 

 

$

72,681

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

17,276

 

 

$

131.2

 

3.05

%

 

$

16,348

 

 

$

122.0

 

3.00

%

Savings and money market

 

 

16,579

 

 

 

146.2

 

3.55

 

 

 

15,247

 

 

 

129.9

 

3.43

 

Certificates of deposit

 

 

10,427

 

 

 

132.9

 

5.12

 

 

 

10,129

 

 

 

128.7

 

5.11

 

Total interest-bearing deposits

 

 

44,282

 

 

 

410.3

 

3.73

 

 

 

41,724

 

 

 

380.6

 

3.67

 

Short-term borrowings

 

 

4,165

 

 

 

58.9

 

5.69

 

 

 

3,715

 

 

 

53.8

 

5.83

 

Long-term debt

 

 

437

 

 

 

12.1

 

11.19

 

 

 

444

 

 

 

12.2

 

11.06

 

Qualifying debt

 

 

896

 

 

 

9.6

 

4.28

 

 

 

895

 

 

 

9.5

 

4.28

 

Total interest-bearing liabilities

 

 

49,780

 

 

 

490.9

 

3.97

 

 

 

46,778

 

 

 

456.1

 

3.92

 

Interest cost of funding earning assets

 

 

 

2.67

 

 

 

 

 

 

2.69

 

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

20,996

 

 

 

 

 

 

 

18,183

 

 

 

 

 

Other liabilities

 

 

1,449

 

 

 

 

 

 

 

1,536

 

 

 

 

 

Stockholders’ equity

 

 

6,330

 

 

 

 

 

 

 

6,184

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

78,555

 

 

 

 

 

 

$

72,681

 

 

 

 

 

Net interest income and margin (4)

 

 

 

$

656.6

 

3.63

%

 

 

 

$

598.9

 

3.60

%

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.9 million and $9.6 million for the three months ended June 30, 2024 and March 31, 2024, respectively.

(2)

Included in the yield computation are net loan fees of $32.1 million and $33.0 million for the three months ended June 30, 2024 and March 31, 2024, 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

 

 

June 30, 2024

 

June 30, 2023

 

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

 

($ in millions)

Interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

2,860

 

 

$

43.0

 

6.05

%

 

$

6,343

 

 

$

105.2

 

6.65

%

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

19,913

 

 

 

370.1

 

7.54

 

 

 

15,712

 

 

 

302.3

 

7.78

 

CRE - non-owner-occupied

 

 

9,680

 

 

 

185.0

 

7.69

 

 

 

9,754

 

 

 

180.7

 

7.44

 

CRE - owner-occupied

 

 

1,865

 

 

 

28.5

 

6.24

 

 

 

1,816

 

 

 

25.1

 

5.66

 

Construction and land development

 

 

4,740

 

 

 

112.3

 

9.53

 

 

 

4,420

 

 

 

103.6

 

9.40

 

Residential real estate

 

 

14,531

 

 

 

157.0

 

4.35

 

 

 

15,006

 

 

 

139.0

 

3.72

 

Consumer

 

 

48

 

 

 

0.8

 

6.94

 

 

 

73

 

 

 

1.3

 

7.15

 

Total loans HFI (1), (2), (3)

 

 

50,777

 

 

 

853.7

 

6.79

 

 

 

46,781

 

 

 

752.0

 

6.48

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Securities - taxable

 

 

14,029

 

 

 

166.5

 

4.77

 

 

 

7,879

 

 

 

91.4

 

4.65

 

Securities - tax-exempt

 

 

2,221

 

 

 

24.0

 

5.45

 

 

 

2,062

 

 

 

21.0

 

5.12

 

Total securities (1)

 

 

16,250

 

 

 

190.5

 

4.87

 

 

 

9,941

 

 

 

112.4

 

4.76

 

Cash and other

 

 

3,983

 

 

 

60.3

 

6.09

 

 

 

2,584

 

 

 

31.2

 

4.84

 

Total interest earning assets

 

 

73,870

 

 

 

1,147.5

 

6.30

 

 

 

65,649

 

 

 

1,000.8

 

6.17

 

Non-interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

294

 

 

 

 

 

 

 

259

 

 

 

 

 

Allowance for credit losses

 

 

(350

)

 

 

 

 

 

 

(314

)

 

 

 

 

Bank owned life insurance

 

 

187

 

 

 

 

 

 

 

183

 

 

 

 

 

Other assets

 

 

4,554

 

 

 

 

 

 

 

4,361

 

 

 

 

 

Total assets

 

$

78,555

 

 

 

 

 

 

$

70,138

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

17,276

 

 

$

131.2

 

3.05

%

 

$

11,893

 

 

$

80.2

 

2.71

%

Savings and money market accounts

 

 

16,579

 

 

 

146.2

 

3.55

 

 

 

13,167

 

 

 

87.2

 

2.66

 

Certificates of deposit

 

 

10,427

 

 

 

132.9

 

5.12

 

 

 

7,626

 

 

 

83.7

 

4.40

 

Total interest-bearing deposits

 

 

44,282

 

 

 

410.3

 

3.73

 

 

 

32,686

 

 

 

251.1

 

3.08

 

Short-term borrowings

 

 

4,165

 

 

 

58.9

 

5.69

 

 

 

12,195

 

 

 

170.4

 

5.60

 

Long-term debt

 

 

437

 

 

 

12.1

 

11.19

 

 

 

826

 

 

 

19.5

 

9.45

 

Qualifying debt

 

 

896

 

 

 

9.6

 

4.28

 

 

 

895

 

 

 

9.5

 

4.27

 

Total interest-bearing liabilities

 

 

49,780

 

 

 

490.9

 

3.97

 

 

 

46,602

 

 

 

450.5

 

3.88

 

Interest cost of funding earning assets

 

 

 

2.67

 

 

 

 

 

 

2.75

 

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

20,996

 

 

 

 

 

 

 

16,701

 

 

 

 

 

Other liabilities

 

 

1,449

 

 

 

 

 

 

 

1,183

 

 

 

 

 

Stockholders’ equity

 

 

6,330

 

 

 

 

 

 

 

5,652

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

78,555

 

 

 

 

 

 

$

70,138

 

 

 

 

 

Net interest income and margin (4)

 

 

 

$

656.6

 

3.63

%

 

 

 

$

550.3

 

3.42

%

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.9 million and $8.7 million for the three months ended June 30, 2024 and 2023, respectively.

(2)

Included in the yield computation are net loan fees of $32.1 million and $36.8 million for the three months ended June 30, 2024 and 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

 

 

 

Six Months Ended

 

 

June 30, 2024

 

June 30, 2023

 

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

 

($ in millions)

Interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans HFS

 

$

2,638

 

 

$

82.1

 

6.26

%

 

$

4,260

 

 

$

136.5

 

6.46

%

Loans HFI:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

19,329

 

 

 

715.8

 

7.51

 

 

 

18,083

 

 

 

670.5

 

7.54

 

CRE - non-owner occupied

 

 

9,574

 

 

 

370.1

 

7.78

 

 

 

9,638

 

 

 

350.1

 

7.33

 

CRE - owner occupied

 

 

1,836

 

 

 

55.3

 

6.15

 

 

 

1,812

 

 

 

49.7

 

5.64

 

Construction and land development

 

 

4,831

 

 

 

229.4

 

9.55

 

 

 

4,325

 

 

 

196.8

 

9.18

 

Residential real estate

 

 

14,626

 

 

 

314.0

 

4.32

 

 

 

15,420

 

 

 

283.8

 

3.71

 

Consumer

 

 

55

 

 

 

1.9

 

7.13

 

 

 

73

 

 

 

2.5

 

6.99

 

Total loans HFI (1), (2), (3)

 

 

50,251

 

 

 

1,686.5

 

6.78

 

 

 

49,351

 

 

 

1,553.4

 

6.38

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Securities - taxable

 

 

12,373

 

 

 

287.6

 

4.67

 

 

 

7,271

 

 

 

166.6

 

4.62

 

Securities - tax-exempt

 

 

2,213

 

 

 

46.9

 

5.34

 

 

 

2,090

 

 

 

41.9

 

5.06

 

Total securities (1)

 

 

14,586

 

 

 

334.5

 

4.78

 

 

 

9,361

 

 

 

208.5

 

4.72

 

Other

 

 

3,468

 

 

 

99.4

 

5.77

 

 

 

2,956

 

 

 

71.3

 

4.86

 

Total interest earning assets

 

 

70,943

 

 

 

2,202.5

 

6.30

 

 

 

65,928

 

 

 

1,969.7

 

6.08

 

Non-interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

289

 

 

 

 

 

 

 

262

 

 

 

 

 

Allowance for credit losses

 

 

(349

)

 

 

 

 

 

 

(314

)

 

 

 

 

Bank owned life insurance

 

 

187

 

 

 

 

 

 

 

183

 

 

 

 

 

Other assets

 

 

4,548

 

 

 

 

 

 

 

4,644

 

 

 

 

 

Total assets

 

$

75,618

 

 

 

 

 

 

$

70,703

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

16,812

 

 

$

253.2

 

3.03

%

 

$

11,217

 

 

$

148.5

 

2.67

%

Savings and money market accounts

 

 

15,913

 

 

 

276.1

 

3.49

 

 

 

15,604

 

 

 

202.7

 

2.62

 

Certificates of deposit

 

 

10,278

 

 

 

261.6

 

5.12

 

 

 

6,578

 

 

 

131.5

 

4.03

 

Total interest-bearing deposits

 

 

43,003

 

 

 

790.9

 

3.70

 

 

 

33,399

 

 

 

482.7

 

2.90

 

Short-term borrowings

 

 

3,940

 

 

 

112.6

 

5.75

 

 

 

9,757

 

 

 

258.0

 

5.33

 

Long-term debt

 

 

441

 

 

 

24.4

 

11.13

 

 

 

1,049

 

 

 

50.0

 

9.62

 

Qualifying debt

 

 

895

 

 

 

19.1

 

4.28

 

 

 

894

 

 

 

18.8

 

4.24

 

Total interest-bearing liabilities

 

 

48,279

 

 

 

947.0

 

3.94

 

 

 

45,099

 

 

 

809.5

 

3.62

 

Interest cost of funding earning assets

 

 

 

2.69

 

 

 

 

 

 

2.48

 

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

19,589

 

 

 

 

 

 

 

18,600

 

 

 

 

 

Other liabilities

 

 

1,493

 

 

 

 

 

 

 

1,384

 

 

 

 

 

Stockholders’ equity

 

 

6,257

 

 

 

 

 

 

 

5,620

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

75,618

 

 

 

 

 

 

$

70,703

 

 

 

 

 

Net interest income and margin (4)

 

 

 

$

1,255.5

 

3.61

%

 

 

 

$

1,160.2

 

3.60

%

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $19.5 million and $17.5 million for the six months ended June 30, 2024 and 2023, respectively.

(2)

Included in the yield computation are net loan fees of $65.2 million and $72.4 million for the six months ended June 30, 2024 and 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

Reportable Segment Results

Unaudited

 

 

 

 

 

 

 

 

 

Balance Sheet:

 

 

 

 

 

 

 

 

 

 

Consolidated Company

 

Commercial

 

Consumer Related

 

Corporate & Other

At June 30, 2024:

 

(dollars in millions)

Assets:

 

 

 

 

 

 

 

 

Cash, cash equivalents, and investments

 

$

21,345

 

 

$

11

 

 

$

—

 

 

$

21,334

 

Loans HFS

 

 

2,007

 

 

 

—

 

 

 

2,007

 

 

 

—

 

Loans HFI, net of deferred fees and costs

 

 

52,430

 

 

 

31,044

 

 

 

21,386

 

 

 

—

 

Less: allowance for credit losses

 

 

(352

)

 

 

(301

)

 

 

(51

)

 

 

—

 

Net loans HFI

 

 

52,078

 

 

 

30,743

 

 

 

21,335

 

 

 

—

 

Other assets acquired through foreclosure, net

 

 

8

 

 

 

8

 

 

 

—

 

 

 

—

 

Goodwill and other intangible assets, net

 

 

664

 

 

 

291

 

 

 

373

 

 

 

—

 

Other assets

 

 

4,479

 

 

 

433

 

 

 

1,892

 

 

 

2,154

 

Total assets

 

$

80,581

 

 

$

31,486

 

 

$

25,607

 

 

$

23,488

 

Liabilities:

 

 

 

 

 

 

 

 

Deposits

 

$

66,244

 

 

$

25,326

 

 

$

34,457

 

 

$

6,461

 

Borrowings and qualifying debt

 

 

6,484

 

 

 

8

 

 

 

43

 

 

 

6,433

 

Other liabilities

 

 

1,519

 

 

 

206

 

 

 

474

 

 

 

839

 

Total liabilities

 

 

74,247

 

 

 

25,540

 

 

 

34,974

 

 

 

13,733

 

Allocated equity:

 

 

6,334

 

 

 

2,702

 

 

 

1,839

 

 

 

1,793

 

Total liabilities and stockholders' equity

 

$

80,581

 

 

$

28,242

 

 

$

36,813

 

 

$

15,526

 

Excess funds provided (used)

 

 

—

 

 

 

(3,244

)

 

 

11,206

 

 

 

(7,962

)

 

 

 

 

 

 

 

 

 

No. of offices

 

 

56

 

 

 

45

 

 

 

8

 

 

 

3

 

No. of full-time equivalent employees

 

 

3,310

 

 

 

580

 

 

 

722

 

 

 

2,008

 

 

 

 

 

 

 

 

 

 

Income Statement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2024:

 

(in millions)

Net interest income

 

$

656.6

 

 

$

292.2

 

 

$

339.0

 

 

$

25.4

 

Provision for (recovery of) credit losses

 

 

37.1

 

 

 

36.1

 

 

 

1.0

 

 

 

—

 

Net interest income after provision for credit losses

 

 

619.5

 

 

 

256.1

 

 

 

338.0

 

 

 

25.4

 

Non-interest income

 

 

115.2

 

 

 

23.1

 

 

 

89.9

 

 

 

2.2

 

Non-interest expense

 

 

486.8

 

 

 

150.8

 

 

 

331.1

 

 

 

4.9

 

Income (loss) before income taxes

 

 

247.9

 

 

 

128.4

 

 

 

96.8

 

 

 

22.7

 

Income tax expense (benefit)

 

 

54.3

 

 

 

28.0

 

 

 

21.5

 

 

 

4.8

 

Net income (loss)

 

$

193.6

 

 

$

100.4

 

 

$

75.3

 

 

$

17.9

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024:

 

(in millions)

Net interest income

 

$

1,255.5

 

 

$

581.1

 

 

$

631.6

 

 

$

42.8

 

Provision for credit losses

 

 

52.3

 

 

 

51.4

 

 

 

0.6

 

 

 

0.3

 

Net interest income after provision for credit losses

 

 

1,203.2

 

 

 

529.7

 

 

 

631.0

 

 

 

42.5

 

Non-interest income

 

 

245.1

 

 

 

49.2

 

 

 

185.6

 

 

 

10.3

 

Non-interest expense

 

 

968.6

 

 

 

306.8

 

 

 

627.0

 

 

 

34.8

 

Income (loss) before provision for income taxes

 

 

479.7

 

 

 

272.1

 

 

 

189.6

 

 

 

18.0

 

Income tax expense (benefit)

 

 

108.7

 

 

 

61.7

 

 

 

43.3

 

 

 

3.7

 

Net income (loss)

 

$

371.0

 

 

$

210.4

 

 

$

146.3

 

 

$

14.3

 

Western Alliance Bancorporation and Subsidiaries

Reportable Segment Results

Unaudited

 

 

 

 

 

 

 

 

 

Balance Sheet:

 

 

 

 

 

 

 

 

 

 

Consolidated Company

 

Commercial

 

Consumer Related

 

Corporate & Other

At December 31, 2023:

 

(dollars in millions)

Assets:

 

 

 

 

 

 

 

 

Cash, cash equivalents, and investments

 

$

14,569

 

 

$

13

 

 

$

125

 

 

$

14,431

 

Loans held for sale

 

 

1,402

 

 

 

—

 

 

 

1,402

 

 

 

—

 

Loans, net of deferred fees and costs

 

 

50,297

 

 

 

29,136

 

 

 

21,161

 

 

 

—

 

Less: allowance for credit losses

 

 

(337

)

 

 

(284

)

 

 

(53

)

 

 

—

 

Total loans

 

 

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

 

 

 

1,790

 

 

 

1,733

 

Total liabilities and stockholders' equity

 

$

70,862

 

 

$

26,568

 

 

$

27,455

 

 

$

16,839

 

Excess funds provided (used)

 

 

—

 

 

 

(2,987

)

 

 

2,617

 

 

 

370

 

 

 

 

 

 

 

 

 

 

No. of offices

 

 

57

 

 

 

46

 

 

 

8

 

 

 

3

 

No. of full-time equivalent employees

 

 

3,260

 

 

 

584

 

 

 

711

 

 

 

1,965

 

 

 

 

 

 

 

 

 

 

Income Statement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023:

 

(in millions)

Net interest income

 

$

550.3

 

 

$

356.5

 

 

$

204.8

 

 

$

(11.0

)

Provision for (recovery of) credit losses

 

 

21.8

 

 

 

18.2

 

 

 

1.9

 

 

 

1.7

 

Net interest income (expense) after provision for credit losses

 

 

528.5

 

 

 

338.3

 

 

 

202.9

 

 

 

(12.7

)

Non-interest income

 

 

119.0

 

 

 

30.8

 

 

 

86.1

 

 

 

2.1

 

Non-interest expense

 

 

387.4

 

 

 

147.7

 

 

 

232.3

 

 

 

7.4

 

Income (loss) before income taxes

 

 

260.1

 

 

 

221.4

 

 

 

56.7

 

 

 

(18.0

)

Income tax expense (benefit)

 

 

44.4

 

 

 

43.4

 

 

 

11.2

 

 

 

(10.2

)

Net income (loss)

 

$

215.7

 

 

$

178.0

 

 

$

45.5

 

 

$

(7.8

)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023:

 

(in millions)

Net interest income

 

$

1,160.2

 

 

$

746.0

 

 

$

404.0

 

 

$

10.2

 

Provision for (recovery of) credit losses

 

 

41.2

 

 

 

15.6

 

 

 

3.4

 

 

 

22.2

 

Net interest income (expense) after provision for credit losses

 

 

1,119.0

 

 

 

730.4

 

 

 

400.6

 

 

 

(12.0

)

Non-interest income

 

 

61.0

 

 

 

(65.9

)

 

 

137.1

 

 

 

(10.2

)

Non-interest expense

 

 

735.3

 

 

 

283.6

 

 

 

424.4

 

 

 

27.3

 

Income (loss) before income taxes

 

 

444.7

 

 

 

380.9

 

 

 

113.3

 

 

 

(49.5

)

Income tax expense (benefit)

 

 

86.8

 

 

 

81.9

 

 

 

24.0

 

 

 

(19.1

)

Net income (loss)

 

$

357.9

 

 

$

299.0

 

 

$

89.3

 

 

$

(30.4

)

Western Alliance Bancorporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Unaudited

 

Pre-Provision Net Revenue by Quarter:

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

(in millions)

Net interest income

$

656.6

 

$

598.9

 

$

591.7

 

$

587.0

 

$

550.3

Total non-interest income

 

115.2

 

 

129.9

 

 

90.5

 

 

129.2

 

 

119.0

Net revenue

$

771.8

 

$

728.8

 

$

682.2

 

$

716.2

 

$

669.3

Total non-interest expense

 

486.8

 

 

481.8

 

 

461.9

 

 

426.2

 

 

387.4

Pre-provision net revenue (1)

$

285.0

 

$

247.0

 

$

220.3

 

$

290.0

 

$

281.9

Adjusted for:

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

37.1

 

 

15.2

 

 

9.3

 

 

12.1

 

 

21.8

Income tax expense

 

54.3

 

 

54.4

 

 

63.1

 

 

61.3

 

 

44.4

Net income

$

193.6

 

$

177.4

 

$

147.9

 

$

216.6

 

$

215.7

Pre-Provision Net Revenue, Excluding FDIC Special Assessment

Three Months Ended

 

Jun 30, 2024

 

Mar 31, 2024

(in millions)

Pre-provision net revenue (1)

$

285.0

 

 

$

247.0

FDIC special assessment

 

(6.0

)

 

 

17.6

Pre-provision net revenue, excluding FDIC special assessment (1)

$

279.0

 

 

$

264.6

Less:

 

 

 

Provision for credit losses

 

37.1

 

 

 

15.2

Income tax expense

 

54.3

 

 

 

54.4

FDIC special assessment

 

(6.0

)

 

 

17.6

Net income

$

193.6

 

 

$

177.4

Efficiency Ratio (Tax Equivalent Basis) by Quarter:

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

(dollars in millions)

Total non-interest expense

$

486.8

 

 

$

481.8

 

 

$

461.9

 

 

$

426.2

 

 

$

387.4

 

Less: Deposit costs

 

173.7

 

 

 

137.0

 

 

 

131.0

 

 

 

127.8

 

 

 

91.0

 

Total non-interest expense, excluding deposit costs

 

313.1

 

 

 

344.8

 

 

 

330.9

 

 

 

298.4

 

 

 

296.4

 

Divided by:

 

 

 

 

 

 

 

 

 

Total net interest income

 

656.6

 

 

 

598.9

 

 

 

591.7

 

 

 

587.0

 

 

 

550.3

 

Plus:

 

 

 

 

 

 

 

 

 

Tax equivalent interest adjustment

 

9.9

 

 

 

9.6

 

 

 

9.1

 

 

 

8.9

 

 

 

8.7

 

Total non-interest income

 

115.2

 

 

 

129.9

 

 

 

90.5

 

 

 

129.2

 

 

 

119.0

 

Less: Deposit costs

 

173.7

 

 

 

137.0

 

 

 

131.0

 

 

 

127.8

 

 

 

91.0

 

 

$

608.0

 

 

$

601.4

 

 

$

560.3

 

 

$

597.3

 

 

$

587.0

 

Efficiency ratio (2)

 

62.3

%

 

 

65.2

%

 

 

66.8

%

 

 

58.8

%

 

 

57.1

%

Efficiency ratio, adjusted for deposit costs (2)

 

51.5

%

 

 

57.3

%

 

 

59.1

%

 

 

50.0

%

 

 

50.5

%

Tangible Common Equity:

 

 

 

 

 

 

 

 

 

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

(dollars and shares in millions)

Total stockholders' equity

$

6,334

 

 

$

6,172

 

 

$

6,078

 

 

$

5,746

 

 

$

5,685

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill and intangible assets

 

664

 

 

 

666

 

 

 

669

 

 

 

672

 

 

 

674

 

Preferred stock

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

Total tangible common equity

 

5,375

 

 

 

5,211

 

 

 

5,114

 

 

 

4,779

 

 

 

4,716

 

Plus: deferred tax - attributed to intangible assets

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Total tangible common equity, net of tax

$

5,377

 

 

$

5,213

 

 

$

5,116

 

 

$

4,781

 

 

$

4,718

 

Total assets

$

80,581

 

 

$

76,989

 

 

$

70,862

 

 

$

70,891

 

 

$

68,160

 

Less: goodwill and intangible assets, net

 

664

 

 

 

666

 

 

 

669

 

 

 

672

 

 

 

674

 

Tangible assets

 

79,917

 

 

 

76,323

 

 

 

70,193

 

 

 

70,219

 

 

 

67,486

 

Plus: deferred tax - attributed to intangible assets

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Total tangible assets, net of tax

$

79,919

 

 

$

76,325

 

 

$

70,195

 

 

$

70,221

 

 

$

67,488

 

Tangible common equity ratio (3)

 

6.7

%

 

 

6.8

%

 

 

7.3

%

 

 

6.8

%

 

 

7.0

%

Common shares outstanding

 

110.2

 

 

 

110.2

 

 

 

109.5

 

 

 

109.5

 

 

 

109.5

 

Tangible book value per share, net of tax (3)

$

48.79

 

 

$

47.30

 

 

$

46.72

 

 

$

43.66

 

 

$

43.09

 

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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717001185/en/

Investors: Miles Pondelik, 602-346-7462 Email: MPondelik@westernalliancebank.com

Media: Stephanie Whitlow, 480-998-6547 Email: SWhitlow@westernalliancebank.com