Exhibit 99.1
Western Alliance Reports First Quarter 2014 Net Income of $31.1 Million, or $0.35 Per Share
PHOENIX--(BUSINESS WIRE)--April 21, 2014--Western Alliance Bancorporation (NYSE:WAL) announced today its financial results for the first quarter 2014.
First Quarter 2014 Highlights:
- Net income of $31.1 million, compared to $31.4 million for the fourth quarter 2013 and $20.9 million for the first quarter 2013
- Net income of $30.1 million for the first quarter 2014, excluding the following, net of tax effect: $1.6 million net gain on repossessed and other assets and $0.6 million net loss from debt valuation adjustments and securities gains
- Earnings per share of $0.35, compared to $0.36 per share in the fourth quarter 2013 and $0.24 per share in the first quarter 2013
- Earnings per share of $0.34 for the first quarter 2014, excluding the following, net of tax effect: $0.02 net gain on repossessed and other assets and $0.01 net loss from debt valuation adjustments and securities gains
- Pre-tax, pre-provision operating earnings of $44.4 million, up from $43.8 million in the fourth quarter 2013 and up 26.5% from $35.1 million in the first quarter 20131
- Net interest margin of 4.41%, compared to 4.44% in the fourth quarter 2013 and 4.36% in the first quarter 2013
- Total loans of $7.11 billion, up $307 million from December 31, 2013 and up $1.25 billion from March 31, 2013
- Total deposits of $8.15 billion, up $311 million from December 31, 2013 and up $1.41 billion from March 31, 2013
- Nonperforming assets (nonaccrual loans and repossessed assets) decreased to 1.30% of total assets from 1.53% in the fourth quarter 2013 and from 2.10% in the first quarter 2013
- Net loan recoveries (annualized) to average loans outstanding of 0.02%, compared to net loan charge-offs to average loans of 0.13% in the fourth quarter 2013 and 0.38% in the first quarter 2013
- Tier I Leverage Capital of 9.9% and Total Risk-Based Capital ratio of 12.4%, compared to 10.1% and 12.6%, respectively, at March 31, 2013
- Total equity of $895 million, up $39 million from December 31, 2013
Financial Performance
“Our company is off to a strong start for 2014,” said Robert Sarver, Chairman and Chief Executive Officer of Western Alliance Bancorporation. “Loans and deposits each grew over $300 million during the first quarter, driving record net interest income. Asset quality continued to improve with net loan recoveries and a reduction in non-performing assets during the period. For the past four quarters, net loan losses have averaged less than five basis points of total loans.”
Sarver continued, “With WAL's revenue growth rate again exceeding our operating expense growth rate, our efficiency ratio improved by 90 basis points to 51%. The legal merger of our subsidiary banks at the end of last year should enable us make business practice improvements to drive this key metric to under 50% in the near future.”
Income Statement
Net interest income was $90.8 million in the first quarter 2014, an increase of $0.8 million, or 0.9%, from $90.0 million in the fourth quarter of 2013 and an increase of $14.6 million, or 19.1%, compared to the first quarter 2013. The Company’s net interest margin decreased in the first quarter 2014 to 4.41%, compared to 4.44% in the fourth quarter 2013, and increased compared to 4.36% in the first quarter 2013.
Operating non-interest income was $5.7 million for the first quarter 2014, compared to $5.2 million in the fourth quarter of 2013 and $5.1 million for the first quarter of 2013.1
Net operating revenue was $96.5 million for the first quarter 2014, an increase of 1.4% compared to $95.2 million for the fourth quarter of 2013 and an increase of 18.7% compared to $81.3 million for the first quarter 2013.1
Operating non-interest expense was $52.1 million for the first quarter 2014, compared to $51.4 million for the fourth quarter of 2013 and $46.2 million for the first quarter of 2013.1 The Company’s operating efficiency ratio1 on a tax equivalent basis was 51.0% for the first quarter 2014, compared to 51.9% for the fourth quarter 2013 and 54.6% for the first quarter 2013.
The Company had 1,105 full-time equivalent employees and 39 offices at March 31, 2014, compared to 992 full-time equivalent employees and 40 offices at March 31, 2013.
The Company views its pre-tax, pre-provision operating earnings as a key metric for assessing the Company’s earning power, which it defines as net operating revenue less operating non-interest expense. For the first quarter 2014, the Company’s pre-tax, pre-provision operating earnings were $44.4 million, up from $43.8 million in the fourth quarter 2013 and up 26.5% from $35.1 million in the first quarter 2013.1
The following are non-core items, which are discussed below on a pre-tax basis.
Net gain on repossessed and other assets (primarily other real estate) was $2.5 million for the first quarter 2014, which resulted primarily from the sale of two properties, compared to a net gain of $2.2 million in the fourth quarter 2013 and a net loss of $0.5 million in the first quarter 2013. At March 31, 2014, other repossessed assets totaled $56 million, compared to $67 million at December 31, 2013 and $78 million at March 31, 2013.
Net loss from debt valuation adjustments and securities gains were $0.9 million for the first quarter 2014. Securities gains of $0.4 million were offset by a loss on junior subordinated debt resulting from an increase in their fair value.
Effective as of the first quarter 2014, the Company elected early adoption of Accounting Standards Codification 323-740, an amended Financial Accounting Standards Board standard related to accounting for low income housing tax credit investments. Under this amended standard, the amortization of the investment may now be calculated under the proportional amortization method and is included in income tax expense rather than as a separate line item in non-interest income. Prior period amounts have been adjusted to reflect the adoption of this new accounting guidance, which has resulted in an increase in non-interest income and income tax expense. See the supplemental schedule at the end of this press release for additional detail on the impact that adoption of this standard has had on prior period financial information.
Balance Sheet
Gross loans totaled $7.11 billion at March 31, 2014, an increase of $307 million from December 31, 2013 and an increase of $1.25 billion from $5.86 billion at March 31, 2013. At March 31, 2014, the allowance for credit losses was 1.46% of total loans, compared to 1.47% at December 31, 2013 and 1.63% at March 31, 2013, reflecting an improvement in the Company’s asset quality profile.
Deposits totaled $8.15 billion at March 31, 2014, an increase of $311 million from $7.84 billion at December 31, 2013 and an increase of $1.41 billion from $6.73 billion at March 31, 2013. Non-interest bearing deposits were $2.09 billion at March 31, 2014, compared to $2.20 billion at December 31, 2013 and $1.93 billion at March 31, 2013. Non-interest bearing deposits comprised 25.7% of total deposits at March 31, 2014, compared to 28.1% at December 31, 2013 and 28.7% at March 31, 2013, while the proportion of savings and money market accounts increased to 45.1% from approximately 42.0% at December 31, 2013 and March 31, 2013. Certificates of deposit as a percent of total deposits remained consistent at approximately 20.0% at March 31, 2014 and March 31, 2013. The Company’s ratio of loans to deposits was 87.2% at March 31, 2014, compared to 86.8% at December 31, 2013 and 86.9% at March 31, 2013.
Stockholders’ equity at March 31, 2014 increased to $895 million from $856 million at December 31, 2013 and increased $114 million from $781 million at March 31, 2013. At March 31, 2014, tangible common equity was 7.5% of tangible assets1 and total risk-based capital was 12.4% of risk-weighted assets. The Company’s tangible book value per share1 was $8.32 at March 31, 2014, up 18.2% from March 31, 2013.
Total assets increased 4.7% to $9.75 billion at March 31, 2014 from $9.31 billion at December 31, 2013, and increased 19.2% from $8.17 billion at March 31, 2013.
Asset Quality
The provision for credit losses was $3.5 million for the first quarter 2014, compared to $4.3 million in the fourth quarter 2013 and $5.4 million for the first quarter 2013. Net loan recoveries in the first quarter 2014 were $0.3 million, or 0.02% of average loans (annualized), compared to net loan charge-offs to average loans of 0.13% for the fourth quarter 2013. Net charge-offs for the first quarter 2013 were $5.4 million, or 0.38% of average loans (annualized).
Nonaccrual loans decreased $5.3 million to $70.4 million during the quarter. Loans past due 90 days and still accruing interest totaled $0.2 million at March 31, 2014, down from $1.5 million at December 31, 2013 and $1.6 million at March 31, 2013. Loans past due 30-89 days, still accruing interest totaled $11.1 million at quarter end, down from $13.4 million at December 31, 2013 and $14.8 million at March 31, 2013.
As the Company’s asset quality improved and its capital increased, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, improved to 24% at March 31, 2014 from 30% at March 31, 2013.1
Segment Highlights
On December 31, 2013, the Company consolidated its three bank subsidiaries under one charter, Western Alliance Bank. As a result, the Company has redefined its operating segments to reflect the new organizational and internal reporting structure. Prior year segment information has not been recast to conform to the new segmentation methodology due to the impracticability of restating segments because of the change in legal structure at December 31, 2013. The new operating segments are as follows: Arizona, Nevada, California, Specialty Finance, and Corporate & Other.
The Company's reportable segments are aggregated primarily based on geographic location, services offered and markets served. The Arizona, Nevada and California segments provide full service banking and related services to their respective regions. The Company's Specialty Finance segment provides banking services to niche markets. These Specialty Finance businesses are broader in geographic scope and are managed centrally. Corporate & Other consists of corporate-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 its Arizona, Nevada, California and Specialty Finance segments include loan and deposit growth, asset quality, total revenues1 and pre-tax, pre-provision operating earnings.1
Arizona reported a gross loan balance of $2.03 billion at March 31, 2014, an increase of $8 million during the quarter. Deposits were $2.17 billion at March 31, 2014, an increase of $78 million during the quarter. Net operating revenues were $27.4 million and pre-tax, pre-provision operating earnings were $14.1 million for the first quarter 2014.
Nevada reported a gross loan balance of $1.72 billion at March 31, 2014, a decrease of $31 million during the quarter. Deposits were $3.02 billion at March 31, 2014, an increase of $127 million during the quarter. Net operating revenues were $30.9 million and pre-tax, pre-provision operating earnings were $14.8 million during the first quarter 2014.
California reported a gross loan balance of $1.66 billion at March 31, 2014, an increase of $48 million during the quarter. Deposits were $1.87 billion at March 31, 2014, a decrease of $30 million during the quarter. Net operating revenues were $24.0 million and pre-tax, pre-provision operating earnings were $11.0 million during the first quarter 2014.
Specialty Finance reported a gross loan balance of $1.62 billion at March 31, 2014, an increase of $271 million during the quarter. Deposits were $845 million at March 31, 2014, an increase of $93 million during the quarter. Net operating revenues were $14.4 million and pre-tax, pre-provision operating earnings were $7.9 million during the first quarter 2014.
Attached to this press release is summarized financial information for the quarter ended March 31, 2014.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its first quarter 2014 financial results at 12:00 p.m. ET on Tuesday, April 22, 2014. Participants may access the call by dialing 1-888-317-6003 and using passcode: 4395570 or via live audio webcast using the website link: http://services.choruscall.com/links/wal140422.html. The webcast is also available via the Company’s website at www.westernalliancebancorp.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 2:00 p.m. ET April 22nd through May 6th at 9:00 a.m. ET by dialing 1-877-344-7529 passcode: 10044322.
About Western Alliance Bancorporation
Western Alliance Bancorporation (NYSE:WAL) is a leading bank holding company providing comprehensive business banking and related financial services through its wholly-owned banking subsidiary, Western Alliance Bank (the "Bank"). With local teams of experienced bankers, the Bank provides a superior level of capabilities, products and services, to assist the growth of local businesses and the quality of life in the markets it serves. In addition to a national platform of specialized financial service units, the Bank operates full service banking divisions in its local markets as Alliance Bank of Arizona, Bank of Nevada, First Independent Bank and Torrey Pines Bank. Western Alliance Bancorporation is publicly traded on the New York Stock Exchange. Additional investor information can be accessed on the Investor Relations page of the Company's website, www.westernalliancebancorp.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding guidance, outlook or expectations relating to loan and deposit growth, interest margin, operating efficiency and asset quality. 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, 2013 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.
This press release contains both financial measures based on accounting principles generally accepted in the United States (“GAAP”) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Western Alliance Bancorporation’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the 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.
1 See Reconciliation of Non-GAAP Financial Measures
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| Western Alliance Bancorporation and Subsidiaries |
| Summary Consolidated Financial Data |
| Unaudited |
| | | | | | | | | | | | |
| | | | At or for the Three Months Ended March 31, |
| | | | 2014 | | | | 2013 | | | | Change % |
| | | | | | | | | | | | |
| Selected Balance Sheet Data: | | | | | | | | | | | | |
| (dollars in millions) | | | | | | | | | | | | |
| Total assets | | | | $ | 9,746.6 | | | | | $ | 8,173.8 | | | | | 19.2 | % |
| Loans, net of deferred fees | | | | 7,108.6 | | | | | 5,855.3 | | | | | 21.4 | |
| Securities and money market investments | | | | 1,671.2 | | | | | 1,302.4 | | | | | 28.3 | |
| Securities purchased under agreement to resell | | | | 111.1 | | | | | 134.0 | | | | | (17.1 | ) |
| Total deposits | | | | 8,149.0 | | | | | 6,734.9 | | | | | 21.0 | |
| Borrowings | | | | 342.8 | | | | | 293.8 | | | | | 16.7 | |
| Junior subordinated debt | | | | 42.8 | | | | | 36.7 | | | | | 16.6 | |
| Stockholders' equity | | | | 894.8 | | | | | 781.1 | | | | | 14.6 | |
| | | | | | | | | | | | |
| Selected Income Statement Data: | | | | | | | | | | | | |
| (dollars in thousands) | | | | | | | | | | | | |
| Interest income | | | | $ | 98,701 | | | | | $ | 83,108 | | | | | 18.8 | % |
| Interest expense | | | | 7,924 | | | | | 6,905 | | | | | 14.8 | |
| Net interest income | | | | 90,777 | | | | | 76,203 | | | | | 19.1 | |
| Provision for loan losses | | | | 3,500 | | | | | 5,439 | | | | | (35.6 | ) |
| Net interest income after provision for credit losses | | | | 87,277 | | | | | 70,764 | | | | | 23.3 | |
| Non-interest income | | | | 4,835 | | | | | 4,799 | | | | | 0.8 | |
| Non-interest expense | | | | 49,749 | | | | | 46,929 | | | | | 6.0 | |
| Income from continuing operations, before income tax expense | | | | 42,363 | | | | | 28,634 | | | | | 47.9 | |
| Income tax expense | | | | 10,624 | | | | | 7,787 | | | | | 36.4 | |
| Income from continuing operations | | | | 31,739 | | | | | 20,847 | | | | | 52.2 | |
| (Loss) income on discontinued operations, net | | | | (654 | ) | | | | 38 | | | | | (1,821.1 | ) |
| Net income | | | | $ | 31,085 | | | | | $ | 20,885 | | | | | 48.8 | % |
| Diluted net income per common share from continuing operations | | | | $ | 0.36 | | | | | $ | 0.24 | | | | | 50.0 | % |
| Diluted net loss per common share from discontinued operations, net of tax | | | | $ | (0.01 | ) | | | | $ | — | | | | | |
| Diluted net income per common share | | | | $ | 0.35 | | | | | $ | 0.24 | | | | | 45.8 | % |
| | | | | | | | | | | | |
| Common Share Data: | | | | | | | | | | | | |
| Diluted net income per common share | | | | $ | 0.35 | | | | | $ | 0.24 | | | | | 45.8 | % |
| Book value per common share | | | | $ | 8.61 | | | | | $ | 7.35 | | | | | 17.1 | % |
| Tangible book value per share, net of tax (1) | | | | $ | 8.32 | | | | | $ | 7.04 | | | | | 18.2 | % |
| Average shares outstanding (in thousands): | | | | | | | | | | | | |
| Basic | | | | 86,256 | | | | | 85,324 | | | | | 1.1 | |
| Diluted | | | | 87,123 | | | | | 85,980 | | | | | 1.3 | |
| Common shares outstanding | | | | 87,554 | | | | | 87,079 | | | | | 0.5 | |
| | | | | | | | | | | | |
| (1) See Reconciliation of Non-GAAP Financial Measures. |
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| Western Alliance Bancorporation and Subsidiaries |
| Summary Consolidated Financial Data (continued) |
| Unaudited |
| | | | | | | | | | | | |
| | | | At or for the Three Months Ended March 31, |
| | | | 2014 | | | | 2013 | | | | Change % |
| | | | | | | | | | | | |
| Selected Performance Ratios: | | | | | | | | | | | | |
| Return on average assets (1) | | | | 1.35 | % | | | | 1.07 | % | | | | 26.2 | % |
| Return on average tangible common equity (2) | | | | 17.55 | | | | | 13.93 | | | | | 26.0 | |
| Net interest margin (1) | | | | 4.41 | | | | | 4.36 | | | | | 1.1 | |
| Net interest spread | | | | 4.27 | | | | | 4.21 | | | | | 1.4 | |
| Efficiency ratio - tax equivalent basis (2) | | | | 51.00 | | | | | 54.58 | | | | | (6.6 | ) |
| Loan to deposit ratio | | | | 87.23 | | | | | 86.94 | | | | | 0.3 | |
| | | | | | | | | | | | |
| Capital Ratios: | | | | | | | | | | | | |
| Tangible equity (2) | | | | 8.9 | % | | | | 9.2 | % | | | | (3.3 | )% |
| Tangible common equity (2) | | | | 7.5 | | | | | 7.5 | | | | | — | |
| Tier 1 common equity (2) | | | | 8.8 | | | | | 8.6 | | | | | 2.3 | |
| Tier 1 Leverage ratio (3) | | | | 9.9 | | | | | 10.1 | | | | | (2.0 | ) |
| Tier 1 Risk Based Capital (3) | | | | 11.1 | | | | | 11.3 | | | | | (1.8 | ) |
| Total Risk Based Capital (3) | | | | 12.4 | | | | | 12.6 | | | | | (1.6 | ) |
| | | | | | | | | | | | |
| Asset Quality Ratios: | | | | | | | | | | | | |
| Net (recoveries) charge-offs to average loans outstanding (1) | | | | (0.02 | )% | | | | 0.38 | % | | | | (105.3 | )% |
| Nonaccrual loans to gross loans | | | | 0.99 | | | | | 1.60 | | | | | (38.1 | ) |
| Nonaccrual loans and repossessed assets to total assets | | | | 1.30 | | | | | 2.10 | | | | | (38.1 | ) |
| Loans past due 90 days and still accruing to total loans | | | | — | | | | | 0.03 | | | | | (100.0 | ) |
| Allowance for credit losses to loans | | | | 1.46 | | | | | 1.63 | | | | | (10.4 | ) |
| Allowance for credit losses to nonaccrual loans | | | | 147.58 | | | | | 101.86 | | | | | 44.9 | |
| | | | | | | | | | | | |
| (1) Annualized for the three month periods ended March 31, 2014 and 2013. |
| (2) See Reconciliation of Non-GAAP Financial Measures. |
| (3) Capital ratios are preliminary until the Call Reports are filed. |
| |
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| | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Condensed Consolidated Income Statements |
| Unaudited |
| | | | Three Months Ended March 31, |
| | | | 2014 | | | | 2013 |
| Interest income: | | | | (dollars in thousands) |
| Loans | | | | $ | 86,804 | | | | | $ | 74,725 | |
| Investment securities | | | | 11,325 | | | | | 8,158 | |
| Federal funds sold and other | | | | 572 | | | | | 225 | |
| Total interest income | | | | 98,701 | | | | | 83,108 | |
| Interest expense: | | | | | | | | |
| Deposits | | | | 4,665 | | | | | 3,732 | |
| Borrowings | | | | 2,838 | | | | | 2,707 | |
| Junior subordinated debt | | | | 421 | | | | | 466 | |
| Total interest expense | | | | 7,924 | | | | | 6,905 | |
| Net interest income | | | | 90,777 | | | | | 76,203 | |
| Provision for credit losses | | | | 3,500 | | | | | 5,439 | |
| Net interest income after provision for credit losses | | | | 87,277 | | | | | 70,764 | |
| Non-interest income: | | | | | | | | |
| Service charges | | | | 2,530 | | | | | 2,534 | |
| Bank owned life insurance | | | | 949 | | | | | 1,036 | |
| Gains on sales of investment securities, net | | | | 366 | | | | | 147 | |
| Unrealized losses on assets/liabilities measured at fair value, net | | | | (1,276 | ) | | | | (471 | ) |
| Other | | | | 2,266 | | | | | 1,553 | |
| Total non-interest income | | | | 4,835 | | | | | 4,799 | |
| Non-interest expenses: | | | | | | | | |
| Salaries and employee benefits | | | | 29,555 | | | | | 26,574 | |
| Occupancy | | | | 4,682 | | | | | 4,846 | |
| Legal, professional and directors' fees | | | | 3,639 | | | | | 3,023 | |
| Insurance | | | | 2,393 | | | | | 2,370 | |
| Data processing | | | | 2,674 | | | | | 1,865 | |
| Marketing | | | | 559 | | | | | 667 | |
| Loan and repossessed asset expenses | | | | 1,234 | | | | | 1,596 | |
| Customer service | | | | 620 | | | | | 643 | |
| Net (gain) loss on sales and valuations of repossessed and other assets | | | | (2,547 | ) | | | | 519 | |
| Intangible amortization | | | | 597 | | | | | 597 | |
| Merger / restructure expense | | | | 157 | | | | | 195 | |
| Other | | | | 6,186 | | | | | 4,034 | |
| Total non-interest expense | | | | 49,749 | | | | | 46,929 | |
| Income from continuing operations before income taxes | | | | 42,363 | | | | | 28,634 | |
| Income tax expense | | | | 10,624 | | | | | 7,787 | |
| Income from continuing operations | | | | $ | 31,739 | | | | | $ | 20,847 | |
| (Loss) income from discontinued operations net of tax benefit | | | | (654 | ) | | | | 38 | |
| Net income | | | | $ | 31,085 | | | | | $ | 20,885 | |
| Preferred stock dividends | | | | 353 | | | | | 353 | |
| Net income available to common stockholders | | | | $ | 30,732 | | | | | $ | 20,532 | |
| | | | | | | | |
| Diluted net income per share | | | | $ | 0.35 | | | | | $ | 0.24 | |
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| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Five Quarter Condensed Consolidated Income Statements |
| Unaudited |
| | | | Three Months Ended |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (in thousands, except per share data) |
| Interest income: | | | | | | | | | | | | | | | | |
| Loans | | | | $ | 86,804 | | | | $ | 86,902 | | | | $ | 83,994 | | | | $ | 81,093 | | | | $ | 74,725 | |
| Investment securities | | | | 11,325 | | | | 10,137 | | | | 8,286 | | | | 7,822 | | | | 8,158 | |
| Federal funds sold and other | | | | 572 | | | | 543 | | | | 400 | | | | 370 | | | | 225 | |
| Total interest income | | | | 98,701 | | | | 97,582 | | | | 92,680 | | | | 89,285 | | | | 83,108 | |
| Interest expense: | | | | | | | | | | | | | | | | |
| Deposits | | | | 4,665 | | | | 4,442 | | | | 4,232 | | | | 3,929 | | | | 3,732 | |
| Borrowings | | | | 2,838 | | | | 2,717 | | | | 3,429 | | | | 2,749 | | | | 2,707 | |
| Junior subordinated debt | | | | 421 | | | | 442 | | | | 460 | | | | 455 | | | | 466 | |
| Total interest expense | | | | 7,924 | | | | 7,601 | | | | 8,121 | | | | 7,133 | | | | 6,905 | |
| Net interest income | | | | 90,777 | | | | 89,981 | | | | 84,559 | | | | 82,152 | | | | 76,203 | |
| Provision for credit losses | | | | 3,500 | | | | 4,300 | | | | — | | | | 3,481 | | | | 5,439 | |
| Net interest income after provision for credit losses | | | | 87,277 | | | | 85,681 | | | | 84,559 | | | | 78,671 | | | | 70,764 | |
| Non-interest income: | | | | | | | | | | | | | | | | |
| Service charges | | | | 2,530 | | | | 2,512 | | | | 2,425 | | | | 2,449 | | | | 2,534 | |
| Bank owned life insurance | | | | 949 | | | | 905 | | | | 1,832 | | | | 1,036 | | | | 1,036 | |
| Gains (losses) on sales of investment securities, net | | | | 366 | | | | 342 | | | | (1,679 | ) | | | (5 | ) | | | 147 | |
| Unrealized losses on assets/liabilities measured at fair value, net | | | | (1,276 | ) | | | (2,618 | ) | | | (7 | ) | | | (3,290 | ) | | | (471 | ) |
| Loss on extinguishment of debt | | | | — | | | | (1,387 | ) | | | — | | | | — | | | | — | |
| Bargain purchase gain from acquisition | | | | — | | | | — | | | | — | | | | 10,044 | | | | — | |
| Other | | | | 2,266 | | | | 1,803 | | | | 1,558 | | | | 1,528 | | | | 1,553 | |
| Total non-interest income | | | | 4,835 | | | | 1,557 | | | | 4,129 | | | | 11,762 | | | | 4,799 | |
| Non-interest expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | | 29,555 | | | | 30,071 | | | | 28,689 | | | | 28,100 | | | | 26,574 | |
| Occupancy | | | | 4,682 | | | | 4,626 | | | | 4,901 | | | | 4,753 | | | | 4,846 | |
| Legal, professional and directors' fees | | | | 3,639 | | | | 4,623 | | | | 3,438 | | | | 2,549 | | | | 3,023 | |
| Insurance | | | | 2,393 | | | | 1,744 | | | | 1,884 | | | | 2,096 | | | | 2,370 | |
| Data processing | | | | 2,674 | | | | 2,040 | | | | 1,872 | | | | 2,175 | | | | 1,865 | |
| Marketing | | | | 559 | | | | 619 | | | | 585 | | | | 710 | | | | 667 | |
| Loan and repossessed asset expenses | | | | 1,234 | | | | 793 | | | | 1,136 | | | | 721 | | | | 1,596 | |
| Customer service | | | | 620 | | | | 860 | | | | 677 | | | | 717 | | | | 643 | |
| Net (gain) loss on sales and valuations of repossessed and other assets | | | | (2,547 | ) | | | (2,153 | ) | | | 371 | | | | (1,124 | ) | | | 519 | |
| Intangible amortization | | | | 597 | | | | 597 | | | | 597 | | | | 597 | | | | 597 | |
| Merger / restructure expense | | | | 157 | | | | 1,919 | | | | 1,018 | | | | 2,620 | | | | 195 | |
| Other | | | | 6,186 | | | | 5,392 | | | | 4,507 | | | | 4,617 | | | | 4,034 | |
| Total non-interest expense | | | | 49,749 | | | | 51,131 | | | | 49,675 | | | | 48,531 | | | | 46,929 | |
| Income from continuing operations before income taxes | | | | 42,363 | | | | 36,107 | | | | 39,013 | | | | 41,902 | | | | 28,634 | |
| Income tax expense | | | | 10,624 | | | | 3,992 | | | | 10,390 | | | | 7,661 | | | | 7,787 | |
| Income from continuing operations | | | | $ | 31,739 | | | | $ | 32,115 | | | | $ | 28,623 | | | | $ | 34,241 | | | | $ | 20,847 | |
| (Loss) income from discontinued operations, net of tax | | | | (654 | ) | | | (701 | ) | | | (29 | ) | | | (169 | ) | | | 38 | |
| Net income | | | | $ | 31,085 | | | | $ | 31,414 | | | | $ | 28,594 | | | | $ | 34,072 | | | | $ | 20,885 | |
| Preferred stock dividends | | | | 353 | | | | 352 | | | | 352 | | | | 353 | | | | 353 | |
| Net income available to common stockholders | | | | $ | 30,732 | | | | $ | 31,062 | | | | $ | 28,242 | | | | $ | 33,719 | | | | $ | 20,532 | |
| | | | | | | | | | | | | | | | |
| Diluted net income per share | | | | $ | 0.35 | | | | $ | 0.36 | | | | $ | 0.33 | | | | $ | 0.39 | | | | $ | 0.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Five Quarter Condensed Consolidated Balance Sheets |
| Unaudited |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (in millions) |
| Assets: | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | | $ | 354.8 | | | | $ | 305.5 | | | | $ | 380.9 | | | | $ | 248.9 | | | | $ | 422.3 | |
| Securities purchased under agreement to resell | | | | 111.1 | | | | — | | | | 128.1 | | | | 134.0 | | | | 134.0 | |
| Cash and cash equivalents | | | | 465.9 | | | | 305.5 | | | | 509.0 | | | | 382.9 | | | | 556.3 | |
| | | | | | | | | | | | | | | | |
| Securities and money market investments | | | | 1,671.2 | | | | 1,689.6 | | | | 1,370.8 | | | | 1,313.1 | | | | 1,302.4 | |
| Loans held for sale | | | | — | | | | — | | | | 25.4 | | | | 27.6 | | | | 27.9 | |
| Loans held for investment: | | | | | | | | | | | | | | | | |
| Commercial | | | | 2,723.4 | | | | 2,478.2 | | | | 2,234.9 | | | | 2,174.1 | | | | 2,084.9 | |
| Commercial real estate - non-owner occupied | | | | 1,849.2 | | | | 1,841.1 | | | | 1,864.3 | | | | 1,839.7 | | | | 1,538.4 | |
| Commercial real estate - owner occupied | | | | 1,606.2 | | | | 1,561.9 | | | | 1,551.2 | | | | 1,550.0 | | | | 1,414.3 | |
| Construction and land development | | | | 553.7 | | | | 535.7 | | | | 459.8 | | | | 416.7 | | | | 381.1 | |
| Residential real estate | | | | 344.9 | | | | 350.3 | | | | 359.0 | | | | 381.7 | | | | 388.7 | |
| Consumer | | | | 38.3 | | | | 43.1 | | | | 29.8 | | | | 28.5 | | | | 26.0 | |
| Deferred fees, net | | | | (7.1 | ) | | | (8.9 | ) | | | (8.1 | ) | | | (6.8 | ) | | | (6.0 | ) |
| Gross loans and deferred fees, net | | | | 7,108.6 | | | | 6,801.4 | | | | 6,490.9 | | | | 6,383.9 | | | | 5,827.4 | |
| Allowance for credit losses | | | | (103.9 | ) | | | (100.1 | ) | | | (97.9 | ) | | | (96.3 | ) | | | (95.5 | ) |
| Loans, net | | | | 7,004.7 | | | | 6,701.3 | | | | 6,393.0 | | | | 6,287.6 | | | | 5,731.9 | |
| | | | | | | | | | | | | | | | |
| Premises and equipment, net | | | | 106.6 | | | | 105.6 | | | | 105.9 | | | | 106.1 | | | | 107.1 | |
| Other repossessed assets | | | | 56.5 | | | | 66.7 | | | | 76.5 | | | | 76.5 | | | | 77.9 | |
| Bank owned life insurance | | | | 141.5 | | | | 140.6 | | | | 139.7 | | | | 140.4 | | | | 139.4 | |
| Goodwill and other intangibles | | | | 26.8 | | | | 27.4 | | | | 28.0 | | | | 28.6 | | | | 29.2 | |
| Other assets | | | | 273.4 | | | | 270.7 | | | | 272.2 | | | | 229.9 | | | | 201.7 | |
| Total assets | | | | $ | 9,746.6 | | | | $ | 9,307.4 | | | | $ | 8,920.5 | | | | $ | 8,592.7 | | | | $ | 8,173.8 | |
| Liabilities and Stockholders' Equity: | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | | | $ | 2,093.6 | | | | $ | 2,200.0 | | | | $ | 1,972.5 | | | | $ | 1,919.6 | | | | $ | 1,930.4 | |
| Interest bearing: | | | | | | | | | | | | | | | | |
| Demand | | | | 750.4 | | | | 709.8 | | | | 673.7 | | | | 631.3 | | | | 619.7 | |
| Savings and money market | | | | 3,672.3 | | | | 3,310.4 | | | | 3,050.0 | | | | 2,945.1 | | | | 2,826.7 | |
| Time certificates | | | | 1,632.7 | | | | 1,618.0 | | | | 1,579.1 | | | | 1,505.3 | | | | 1,358.1 | |
| Total deposits | | | | 8,149.0 | | | | 7,838.2 | | | | 7,275.3 | | | | 7,001.3 | | | | 6,734.9 | |
| Customer repurchase agreements | | | | 57.4 | | | | 71.2 | | | | 55.5 | | | | 51.9 | | | | 64.7 | |
| Total customer funds | | | | 8,206.4 | | | | 7,909.4 | | | | 7,330.8 | | | | 7,053.2 | | | | 6,799.6 | |
| Securities sold short | | | | 99.1 | | | | — | | | | 126.6 | | | | 129.5 | | | | 132.6 | |
| Borrowings | | | | 342.8 | | | | 341.1 | | | | 394.1 | | | | 418.6 | | | | 293.8 | |
| Junior subordinated debt | | | | 42.8 | | | | 41.9 | | | | 39.4 | | | | 39.9 | | | | 36.7 | |
| Accrued interest payable and other liabilities | | | | 160.7 | | | | 159.5 | | | | 203.1 | | | | 152.2 | | | | 130.0 | |
| Total liabilities | | | | 8,851.8 | | | | 8,451.9 | | | | 8,094.0 | | | | 7,793.4 | | | | 7,392.7 | |
| Stockholders' Equity | | | | | | | | | | | | | | | | |
| Common stock and additional paid-in capital | | | | 795.3 | | | | 797.2 | | | | 792.2 | | | | 789.5 | | | | 786.9 | |
| Preferred stock | | | | 141.0 | | | | 141.0 | | | | 141.0 | | | | 141.0 | | | | 141.0 | |
| Accumulated deficit | | | | (30.4 | ) | | | (61.2 | ) | | | (92.2 | ) | | | (120.4 | ) | | | (154.0 | ) |
| Accumulated other comprehensive (loss) income | | | | (11.1 | ) | | | (21.5 | ) | | | (14.5 | ) | | | (10.8 | ) | | | 7.2 | |
| Total stockholders' equity | | | | 894.8 | | | | 855.5 | | | | 826.5 | | | | 799.3 | | | | 781.1 | |
| Total liabilities and stockholders' equity | | | | $ | 9,746.6 | | | | $ | 9,307.4 | | | | $ | 8,920.5 | | | | $ | 8,592.7 | | | | $ | 8,173.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Changes in the Allowance For Credit Losses |
| Unaudited |
| | | | Three Months Ended |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (in thousands) |
| Balance, beginning of period | | | | $ | 100,050 | | | | $ | 97,851 | | | | $ | 96,323 | | | | $ | 95,494 | | | | $ | 95,427 | |
| Provision for credit losses | | | | 3,500 | | | | 4,300 | | | | — | | | | 3,481 | | | | 5,439 | |
| Recoveries of loans previously charged-off: | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | | 922 | | | | 666 | | | | 2,242 | | | | 1,757 | | | | 441 | |
| Commercial real estate - non-owner occupied | | | | 83 | | | | 395 | | | | 273 | | | | 154 | | | | 440 | |
| Commercial real estate - owner occupied | | | | 477 | | | | 297 | | | | 149 | | | | 479 | | | | 502 | |
| Construction and land development | | | | 211 | | | | 273 | | | | 966 | | | | 120 | | | | 701 | |
| Residential real estate | | | | 553 | | | | 549 | | | | 430 | | | | 549 | | | | 569 | |
| Consumer | | | | 170 | | | | 179 | | | | 726 | | | | 11 | | | | 14 | |
| Total recoveries | | | | 2,416 | | | | 2,359 | | | | 4,786 | | | | 3,070 | | | | 2,667 | |
| Loans charged-off: | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | | 1,478 | | | | 621 | | | | 544 | | | | 1,065 | | | | 1,770 | |
| Commercial real estate - non-owner occupied | | | | 160 | | | | 2,268 | | | | 466 | | | | 1,000 | | | | 1,908 | |
| Commercial real estate - owner occupied | | | | 11 | | | | 238 | | | | 398 | | | | 1,391 | | | | 979 | |
| Construction and land development | | | | — | | | | 686 | | | | — | | | | 238 | | | | 614 | |
| Residential real estate | | | | 406 | | | | 281 | | | | 1,138 | | | | 2,010 | | | | 2,493 | |
| Consumer | | | | 12 | | | | 366 | | | | 712 | | | | 18 | | | | 275 | |
| Total loans charged-off | | | | 2,067 | | | | 4,460 | | | | 3,258 | | | | 5,722 | | | | 8,039 | |
| Net loan (recoveries) charge-offs | | | | (349 | ) | | | 2,101 | | | | (1,528 | ) | | | 2,652 | | | | 5,372 | |
| Balance, end of period | | | | $ | 103,899 | | | | $ | 100,050 | | | | $ | 97,851 | | | | $ | 96,323 | | | | $ | 95,494 | |
| | | | | | | | | | | | | | | | |
| Net (recoveries) charge-offs to average loans outstanding - annualized | | | | (0.02 | )% | | | 0.13 | % | | | (0.10 | )% | | | 0.17 | % | | | 0.38 | % |
| Allowance for credit losses to gross loans | | | | 1.46 | | | | 1.47 | | | | 1.50 | | | | 1.50 | | | | 1.63 | |
| Nonaccrual loans | | | | $ | 70,401 | | | | $ | 75,681 | | | | $ | 76,641 | | | | $ | 82,899 | | | | $ | 93,748 | |
| Repossessed assets | | | | 56,450 | | | | 66,719 | | | | 76,475 | | | | 76,499 | | | | 77,921 | |
| Loans past due 90 days, still accruing | | | | 167 | | | | 1,534 | | | | 5,456 | | | | 3,893 | | | | 1,640 | |
| Loans past due 30 to 89 days, still accruing | | | | 11,087 | | | | 13,425 | | | | 8,689 | | | | 7,341 | | | | 14,795 | |
| Classified loans on accrual | | | | 125,903 | | | | 128,586 | | | | 144,041 | | | | 140,192 | | | | 97,351 | |
| Special mention loans | | | | 117,540 | | | | 129,965 | | | | 137,247 | | | | 162,482 | | | | 125,660 | |
| | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Analysis of Average Balances, Yields and Rates |
| Unaudited |
| | | | Three Months Ended March 31, |
| | | | 2014 | | | | 2013 |
| | | | Average
Balance | | | Interest | | | Average
Yield/ Cost | | | | Average
Balance | | | Interest | | | Average
Yield/ Cost |
| | | | ($ in millions) | | | ($ in thousands) | | | | | | | ($ in millions) | | | ($ in thousands) | | | |
| Interest earning assets | | | | | | | | | | | | | | | | | | | | |
| Loans (1) | | | | $ | 6,893.2 | | | | $ | 86,804 | | | | 5.27 | % | | | | $ | 5,610.4 | | | | $ | 74,725 | | | | 5.42 | % |
| Securities (1) | | | | 1,651.6 | | | | 11,325 | | | | 3.15 | | | | | 1,283.4 | | | | 8,158 | | | | 3.21 | |
| Federal funds sold and other | | | | 210.3 | | | | 572 | | | | 1.09 | | | | | 404.8 | | | | 225 | | | | 0.22 | |
| Total interest earning assets | | | | 8,755.1 | | | | 98,701 | | | | 4.77 | | | | | 7,298.6 | | | | 83,108 | | | | 4.74 | |
| Non-interest earning assets | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | | 137.5 | | | | | | | | | | | 126.4 | | | | | | | |
| Allowance for credit losses | | | | (101.2 | ) | | | | | | | | | | (96.9 | ) | | | | | | |
| Bank owned life insurance | | | | 140.9 | | | | | | | | | | | 138.7 | | | | | | | |
| Other assets | | | | 433.1 | | | | | | | | | | | 421.9 | | | | | | | |
| Total assets | | | | $ | 9,365.4 | | | | | | | | | | | $ | 7,888.7 | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | | | $ | 765.0 | | | | $ | 384 | | | | 0.20 | % | | | | $ | 608.7 | | | | $ | 301 | | | | 0.20 | % |
| Savings and money market | | | | 3,452.3 | | | | 2,562 | | | | 0.30 | | | | | 2,620.9 | | | | 1,911 | | | | 0.29 | |
| Time certificates of deposit | | | | 1,619.6 | | | | 1,719 | | | | 0.42 | | | | | 1,449.4 | | | | 1,520 | | | | 0.42 | |
| Total interest-bearing deposits | | | | 5,836.9 | | | | 4,665 | | | | 0.32 | | | | | 4,679.0 | | | | 3,732 | | | | 0.32 | |
| Short-term borrowings | | | | 163.3 | | | | 130 | | | | 0.32 | | | | | 176.4 | | | | 214 | | | | 0.49 | |
| Long-term debt | | | | 301.8 | | | | 2,708 | | | | 3.59 | | | | | 272.9 | | | | 2,493 | | | | 3.65 | |
| Junior subordinated debt | | | | 41.9 | | | | 421 | | | | 4.02 | | | | | 36.2 | | | | 466 | | | | 5.15 | |
| Total interest-bearing liabilities | | | | 6,343.9 | | | | 7,924 | | | | 0.50 | | | | | 5,164.5 | | | | 6,905 | | | | 0.53 | |
| Non-interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | | | 2,054.1 | | | | | | | | | | | 1,855.1 | | | | | | | |
| Other liabilities | | | | 81.1 | | | | | | | | | | | 90.7 | | | | | | | |
| Stockholders’ equity | | | | 886.3 | | | | | | | | | | | 778.4 | | | | | | | |
| Total liabilities and stockholders' equity | | | | $ | 9,365.4 | | | | | | | | | | | $ | 7,888.7 | | | | | | | |
| Net interest income and margin | | | | | | | $ | 90,777 | | | | 4.41 | % | | | | | | | $ | 76,203 | | | | 4.36 | % |
| Net interest spread | | | | | | | | | | 4.27 | % | | | | | | | | | | 4.21 | % |
| | | | | | | | | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $5,705 and $3,382 for the first quarters ended 2014 and 2013, respectively. |
| |
| |
| | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Operating Segment Results |
| Unaudited |
| | | | | | | | | | | | | | | | | | | |
| | | | Arizona | | | Nevada | | | California | | | Specialty
Finance | | | Corporate &
Other | | | Consolidated
Company |
| | | | (dollars in millions) |
| At March 31, 2014 | | | | | | | | | | | | | | | | | | | |
| Assets | | | | $ | 2,054.0 | | | | $ | 1,819.7 | | | | $ | 1,667.2 | | | | $ | 1,616.0 | | | | $ | 2,589.7 | | | | $ | 9,746.6 | |
| Gross loans and deferred fees, net | | | | 2,032.3 | | | | 1,723.8 | | | | 1,663.1 | | | | 1,621.2 | | | | 68.2 | | | | 7,108.6 | |
| Less: Allowance for credit losses | | | | (29.7 | ) | | | (25.2 | ) | | | (24.3 | ) | | | (23.7 | ) | | | (1.0 | ) | | | (103.9 | ) |
| Loans, net | | | | 2,002.6 | | | | 1,698.6 | | | | 1,638.8 | | | | 1,597.5 | | | | 67.2 | | | | 7,004.7 | |
| | | | | | | | | | | | | | | | | | | |
| Goodwill and intangible assets, net | | | | 2.4 | | | | 24.4 | | | | — | | | | — | | | | — | | | | 26.8 | |
| Deposits | | | | 2,166.0 | | | | 3,024.6 | | | | 1,867.3 | | | | 845.1 | | | | 246.0 | | | | 8,149.0 | |
| Borrowings | | | | — | | | | — | | | | — | | | | — | | | | 342.8 | | | | 342.8 | |
| Stockholders' equity | | | | $ | 219.4 | | | | $ | 207.9 | | | | $ | 178.7 | | | | $ | 123.2 | | | | $ | 165.6 | | | | $ | 894.8 | |
| | | | | | | | | | | | | | | | | | | |
| No. of branches | | | | 10 | | | | 18 | | | | 11 | | | | — | | | | — | | | | 39 | |
| No. of full-time equivalent employees | | | | 216 | | | | 326 | | | | 217 | | | | 93 | | | | 253 | | | | 1,105 | |
| | | | | | | | | | | | | | | | | | | |
| | | | (in thousands) |
| Three Months Ended March 31, 2014: | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) | | | | $ | 26,608 | | | | $ | 28,595 | | | | $ | 22,792 | | | | $ | 13,964 | | | | $ | (1,182 | ) | | | $ | 90,777 | |
| Provision for credit losses | | | | 1,558 | | | | (884 | ) | | | 655 | | | | 2,170 | | | | 1 | | | | 3,500 | |
| Net interest income (expense) after provision for credit losses | | | | 25,050 | | | | 29,479 | | | | 22,137 | | | | 11,794 | | | | (1,183 | ) | | | 87,277 | |
| Non-interest income | | | | 820 | | | | 2,289 | | | | 1,250 | | | | 82 | | | | 394 | | | | 4,835 | |
| Non-interest expense | | | | (13,304 | ) | | | (15,236 | ) | | | (13,043 | ) | | | (6,508 | ) | | | (1,658 | ) | | | (49,749 | ) |
| Income (loss) from continuing operations before income taxes | | | | 12,566 | | | | 16,532 | | | | 10,344 | | | | 5,368 | | | | (2,447 | ) | | | 42,363 | |
| Income tax expense (benefit) | | | | 4,929 | | | | 5,787 | | | | 4,350 | | | | 2,013 | | | | (6,455 | ) | | | 10,624 | |
| Income (loss) from continuing operations | | | | 7,637 | | | | 10,745 | | | | 5,994 | | | | 3,355 | | | | 4,008 | | | | 31,739 | |
| Loss from discontinued operations, net | | | | — | | | | — | | | | — | | | | — | | | | (654 | ) | | | (654 | ) |
| Net income (loss) | | | | $ | 7,637 | | | | $ | 10,745 | | | | $ | 5,994 | | | | $ | 3,355 | | | | $ | 3,354 | | | | $ | 31,085 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures (Unaudited) |
| | | | | | | | | | | | | | | | |
| Pre-Tax, Pre-Provision Operating Earnings by Quarter |
| | | | Three Months Ended |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (in thousands) |
| Total non-interest income | | | | $ | 4,835 | | | | $ | 1,557 | | | | $ | 4,129 | | | | $ | 11,762 | | | | $ | 4,799 | |
| Less: | | | | | | | | | | | | | | | | |
Unrealized losses on assets/liabilities measured at fair value, net | | | | (1,276 | ) | | | (2,618 | ) | | | (7 | ) | | | (3,290 | ) | | | (471 | ) |
| Loss on extinguishment of debt | | | | — | | | | (1,387 | ) | | | — | | | | — | | | | — | |
| Bargain purchase gain from acquisitions | | | | — | | | | — | | | | — | | | | 10,044 | | | | — | |
| Legal settlements | | | | — | | | | — | | | | — | | | | — | | | | 38 | |
| Gains (losses) on sales of investment securities, net | | | | 366 | | | | 342 | | | | (1,679 | ) | | | (5 | ) | | | 147 | |
| Total operating non-interest income | | | | 5,745 | | | | 5,220 | | | | 5,815 | | | | 5,013 | | | | 5,085 | |
| Add: Net interest income | | | | 90,777 | | | | 89,981 | | | | 84,559 | | | | 82,152 | | | | 76,203 | |
| Net operating revenue (3) | | | | $ | 96,522 | | | | $ | 95,201 | | | | $ | 90,374 | | | | $ | 87,165 | | | | $ | 81,288 | |
| | | | | | | | | | | | | | | | |
| Total non-interest expense | | | | $ | 49,749 | | | | $ | 51,131 | | | | $ | 49,675 | | | | $ | 48,531 | | | | $ | 46,929 | |
| Less: | | | | | | | | | | | | | | | | |
| Net (gain) loss on sales and valuations of repossessed and other assets | | | | (2,547 | ) | | | (2,153 | ) | | | 371 | | | | (1,124 | ) | | | 519 | |
| Merger / restructure expense | | | | 157 | | | | 1,919 | | | | 1,018 | | | | 2,620 | | | | 195 | |
| Total operating non-interest expense (3) | | | | $ | 52,139 | | | | $ | 51,365 | | | | $ | 48,286 | | | | $ | 47,035 | | | | $ | 46,215 | |
| | | | | | | | | | | | | | | | |
| Pre-tax, pre-provision operating earnings (4) | | | | $ | 44,383 | | | | $ | 43,836 | | | | $ | 42,088 | | | | $ | 40,130 | | | | $ | 35,073 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Pre-Tax, Pre-Provision Operating Earnings by Segment |
| | | | Three Months Ended March 31, 2014 |
| | | | Arizona | | | Nevada | | | California | | | Specialty
Finance | | | Corporate &
Other | | | Consolidated
Company |
| | | | (in thousands) | | | |
| Total non-interest income | | | | $ | 820 | | | | $ | 2,289 | | | | $ | 1,250 | | | | $ | 82 | | | | $ | 394 | | | | $ | 4,835 | |
| Less: | | | | | | | | | | | | | | | | | | | |
Unrealized losses on assets/liabilities measured at fair value, net | | | | — | | | | — | | | | — | | | | (364 | ) | | | (912 | ) | | | (1,276 | ) |
| Gains (losses) on sales of investment securities, net | | | | — | | | | — | | | | — | | | | — | | | | 366 | | | | 366 | |
| Total operating non-interest income | | | | 820 | | | | 2,289 | | | | 1,250 | | | | 446 | | | | 940 | | | | 5,745 | |
| Add: Net interest income | | | | 26,608 | | | | 28,595 | | | | 22,792 | | | | 13,964 | | | | (1,182 | ) | | | 90,777 | |
| Net operating revenue (3) | | | | $ | 27,428 | | | | $ | 30,884 | | | | $ | 24,042 | | | | $ | 14,410 | | | | $ | (242 | ) | | | $ | 96,522 | |
| | | | | | | | | | | | | | | | | | | |
| Total non-interest expense | | | | $ | 13,304 | | | | $ | 15,236 | | | | $ | 13,043 | | | | $ | 6,508 | | | | $ | 1,658 | | | | $ | 49,749 | |
| Less: | | | | | | | | | | | | | | | | | | | |
| Net (gain) loss on sales and valuations of repossessed and other assets | | | | (26 | ) | | | (721 | ) | | | (1 | ) | | | (20 | ) | | | (1,779 | ) | | | (2,547 | ) |
| Merger / restructure expense | | | | — | | | | (122 | ) | | | — | | | | — | | | | 279 | | | | 157 | |
| Total operating non-interest expense (3) | | | | $ | 13,330 | | | | $ | 16,079 | | | | $ | 13,044 | | | | $ | 6,528 | | | | $ | 3,158 | | | | $ | 52,139 | |
| | | | | | | | | | | | | | | | | | | |
| Pre-tax, pre-provision operating earnings (losses) (4) | | | | $ | 14,098 | | | | $ | 14,805 | | | | $ | 10,998 | | | | $ | 7,882 | | | | $ | (3,400 | ) | | | $ | 44,383 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures (Unaudited) |
| | | | | | | | | | | | | | | | |
| Tangible Common Equity |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (dollars and shares in thousands) |
| Total stockholders' equity | | | | $ | 894,804 | | | | $ | 855,498 | | | | $ | 826,472 | | | | $ | 799,307 | | | | $ | 781,021 | |
| Less: | | | | | | | | | | | | | | | | |
| Goodwill and intangible assets | | | | 26,777 | | | | 27,374 | | | | 27,970 | | | | 28,568 | | | | 29,166 | |
| Total tangible stockholders' equity | | | | 868,027 | | | | 828,124 | | | | 798,502 | | | | 770,739 | | | | 751,855 | |
| Less: | | | | | | | | | | | | | | | | |
| Preferred stock | | | | 141,000 | | | | 141,000 | | | | 141,000 | | | | 141,000 | | | | 141,000 | |
| Total tangible common equity | | | | 727,027 | | | | 687,124 | | | | 657,502 | | | | 629,739 | | | | 610,855 | |
| Add: | | | | | | | | | | | | | | | | |
| Deferred tax - attributed to intangible assets | | | | 1,243 | | | | 1,452 | | | | 1,661 | | | | 1,870 | | | | 2,080 | |
| Total tangible common equity, net of tax | | | | $ | 728,270 | | | | $ | 688,576 | | | | $ | 659,163 | | | | $ | 631,609 | | | | $ | 612,935 | |
| Total assets | | | | $ | 9,746,623 | | | | $ | 9,307,342 | | | | $ | 8,920,449 | | | | $ | 8,592,692 | | | | $ | 8,173,890 | |
| Less: | | | | | | | | | | | | | | | | |
| Goodwill and intangible assets | | | | 26,777 | | | | 27,374 | | | | 27,970 | | | | 28,568 | | | | 29,166 | |
| Tangible assets | | | | 9,719,846 | | | | 9,279,968 | | | | 8,892,479 | | | | 8,564,124 | | | | 8,144,724 | |
| Add: | | | | | | | | | | | | | | | | |
| Deferred tax - attributed to intangible assets | | | | 1,243 | | | | 1,452 | | | | 1,661 | | | | 1,870 | | | | 2,080 | |
| Total tangible assets, net of tax | | | | $ | 9,721,089 | | | | $ | 9,281,420 | | | | $ | 8,894,140 | | | | $ | 8,565,994 | | | | $ | 8,146,804 | |
| Tangible equity ratio (1) | | | | 8.9 | % | | | 8.9 | % | | | 9.0 | % | | | 9.0 | % | | | 9.2 | % |
| Tangible common equity ratio (1) | | | | 7.5 | % | | | 7.4 | % | | | 7.4 | % | | | 7.4 | % | | | 7.5 | % |
| Common shares outstanding | | | | 87,554 | | | | 87,186 | | | | 87,099 | | | | 86,997 | | | | 87,079 | |
| Tangible book value per share, net of tax (2) | | | | $ | 8.32 | | | | $ | 7.90 | | | | $ | 7.57 | | | | $ | 7.26 | | | | $ | 7.04 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Efficiency Ratio | | | | | | | | | | | | | | | | |
| | | | Three Months Ended |
| | | | Mar 31, 2014 | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 |
| | | | (in thousands) |
| Total operating non-interest expense | | | | $ | 52,139 | | | | $ | 51,365 | | | | $ | 48,286 | | | | $ | 47,035 | | | | $ | 46,215 | |
| Divided by: | | | | | | | | | | | | | | | | |
| Total net interest income | | | | $ | 90,777 | | | | $ | 89,981 | | | | $ | 84,559 | | | | $ | 82,152 | | | | $ | 76,203 | |
| Add: | | | | | | | | | | | | | | | | |
| Tax equivalent interest adjustment | | | | 5,705 | | | | 3,728 | | | | 3,272 | | | | 2,929 | | | | 3,382 | |
| Operating non-interest income | | | | 5,745 | | | | 5,220 | | | | 5,815 | | | | 5,013 | | | | 5,085 | |
| | | | $ | 102,227 | | | | $ | 98,929 | | | | $ | 93,646 | | | | $ | 90,094 | | | | $ | 84,670 | |
| Efficiency ratio - tax equivalent basis (5) | | | | 51.0 | % | | | 51.9 | % | | | 51.6 | % | | | 52.2 | % | | | 54.6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures (Unaudited) |
| | | | | | | | |
| Tier 1 Common Equity |
| | | | Three Months Ended March 31, |
| | | | 2014 | | | | 2013 |
| | | | (in thousands) |
| Stockholders' equity | | | | $ | 894,804 | | | | | $ | 781,021 | |
| Less: | | | | | | | | |
| Accumulated other comprehensive (loss) income | | | | (11,131 | ) | | | | 7,205 | |
| Non-qualifying goodwill and intangibles | | | | 26,008 | | | | | 27,138 | |
| Other non-qualifying assets | | | | — | | | | | 2 | |
| Disallowed unrealized losses on equity securities | | | | 2,550 | | | | | — | |
| Add: | | | | | | | | |
| Qualifying trust preferred securities | | | | 49,120 | | | | | 45,124 | |
| Tier 1 capital (regulatory) (6) (9) | | | | 926,497 | | | | | 791,800 | |
| Less: | | | | | | | | |
| Qualifying trust preferred securities | | | | 49,120 | | | | | 45,124 | |
| Preferred stock | | | | 141,000 | | | | | 141,000 | |
| Estimated Tier 1 common equity (7) (9) | | | | $ | 736,377 | | | | | $ | 605,676 | |
| Divided by: | | | | | | | | |
Estimated risk-weighted assets (regulatory) (7) (9) | | | | $ | 8,336,821 | | | | | $ | 7,011,489 | |
| Tier 1 common equity ratio (7) (9) | | | | 8.8 | % | | | | 8.6 | % |
| | | | | | | | |
| Tier 1 Capital |
| | | | March 31, |
| | | | 2014 | | | | 2013 |
| | | | (in thousands) |
| Classified assets | | | | $ | 251,851 | | | | | $ | 269,434 | |
| Divide: | | | | | | | | |
| Tier 1 capital (regulatory) (6) (9) | | | | 926,497 | | | | | 791,800 | |
| Plus: Allowance for credit losses | | | | 103,899 | | | | | 95,494 | |
| Total Tier 1 capital plus allowance for credit losses | | | | $ | 1,030,396 | | | | | $ | 887,294 | |
| Classified assets to Tier 1 capital plus allowance (8) (9) | | | | 24 | % | | | | 30 | % |
| | | | | | | | | | |
| (1) We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength. |
(2) We believe this non-GAAP ratio improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. |
| (3) We believe these non-GAAP measurements provide a useful indication of the cash generating capacity of the Company. |
| (4) We believe this non-GAAP measurement is a key indicator of the earnings power of the Company. |
| (5) We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company. |
(6) Under the guidelines of the Federal Reserve and the Federal Deposit Insurance Corporation in effect, Tier 1 capital consisted of common stock, retained earnings, non-cumulative perpetual preferred stock, trust preferred securities up to a certain limit, and minority interests in certain subsidiaries, less most other intangible assets. |
(7) Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is divided by the risk-weighted assets to determine the Tier 1 common equity ratio. We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength. |
| (8) We believe this non-GAAP ratio provides a critical regulatory metric in which to analyze asset quality. |
| (9) Current quarter is preliminary until Call Reports are filed. |
| |
| |
Supplemental Schedule
The following table presents the impact of the Company's adoption of an amended accounting standard related to low income housing tax credit investments issued by the FASB on January 15, 2014 and its retrospective application for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | | | Dec 2013 | | | Sep 2013 | | | Jun 2013 | | | Mar 2013 | | | Dec 2012 | | | Sep 2012 | | | Jun 2012 |
| | | | (in millions) |
| Consolidated Balance Sheet: | | | | | | | | | | | | | | | | | | | | | | |
| Other assets | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 270.4 | | | | 273.1 | | | | 230.8 | | | | 202.1 | | | | 214.2 | | | | 169.9 | | | | 161.7 |
| As reported under new guidance | | | | 270.7 | | | | 272.2 | | | | 229.9 | | | | 201.7 | | | | 214.0 | | | | 169.4 | | | | 161.5 |
| Accrued interest payable and other liabilities | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 159.5 | | | | 204.1 | | | | 153.0 | | | | 130.1 | | | | 98.9 | | | | 72.4 | | | | 62.9 |
| As reported under new guidance | | | | 159.5 | | | | 203.1 | | | | 152.2 | | | | 130.0 | | | | 98.9 | | | | 71.8 | | | | 62.8 |
| Stockholders' equity | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 855.3 | | | | 826.3 | | | | 799.5 | | | | 781.3 | | | | 759.6 | | | | 698.0 | | | | 672.1 |
| As reported under new guidance | | | | 855.5 | | | | 826.5 | | | | 799.3 | | | | 781.1 | | | | 759.4 | | | | 698.1 | | | | 672.1 |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | Dec 31, 2013 | | | Sep 30, 2013 | | | Jun 30, 2013 | | | Mar 31, 2013 | | | Dec 31, 2012 | | | Sep 30, 2012 | | | Jun 30, 2012 |
| | | | (in thousands, except per share data) |
| Consolidated Income Statement: | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest income | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | (157 | ) | | | 2,625 | | | | 10,862 | | | | 3,899 | | | | 24,463 | | | | 6,982 | | | | 7,397 |
| As reported under new guidance | | | | 1,557 | | | | 4,129 | | | | 11,762 | | | | 4,799 | | | | 25,532 | | | | 7,692 | | | | 7,397 |
| Income tax expense | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 2,341 | | | | 9,288 | | | | 6,817 | | | | 6,808 | | | | 7,509 | | | | 6,752 | | | | 5,259 |
| As reported under new guidance | | | | 3,992 | | | | 10,390 | | | | 7,661 | | | | 7,787 | | | | 8,866 | | | | 7,323 | | | | 5,305 |
| | | | | | | | | | | | | | | | | | | | | | |
| Income from continuing operations | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 32,052 | | | | 28,221 | | | | 34,185 | | | | 20,926 | | | | 33,919 | | | | 15,701 | | | | 14,182 |
| As reported under new guidance | | | | 32,115 | | | | 28,623 | | | | 34,241 | | | | 20,847 | | | | 33,631 | | | | 15,840 | | | | 14,136 |
| Net income | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 31,351 | | | | 28,192 | | | | 34,016 | | | | 20,964 | | | | 32,115 | | | | 15,458 | | | | 13,961 |
| As reported under new guidance | | | | 31,414 | | | | 28,594 | | | | 34,072 | | | | 20,885 | | | | 31,827 | | | | 15,597 | | | | 13,915 |
| Net income available to common shareholders | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 30,999 | | | | 27,840 | | | | 33,663 | | | | 20,611 | | | | 31,762 | | | | 15,106 | | | | 12,636 |
| As reported under new guidance | | | | 31,062 | | | | 28,242 | | | | 33,719 | | | | 20,532 | | | | 31,474 | | | | 15,245 | | | | 12,590 |
| Earnings per share applicable to common shareholders--basic | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 0.36 | | | | 0.32 | | | | 0.39 | | | | 0.24 | | | | 0.38 | | | | 0.18 | | | | 0.15 |
| As reported under new guidance | | | | 0.36 | | | | 0.33 | | | | 0.39 | | | | 0.24 | | | | 0.38 | | | | 0.19 | | | | 0.15 |
| Earnings per share applicable to common shareholders--diluted | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | | | 0.36 | | | | 0.32 | | | | 0.39 | | | | 0.24 | | | | 0.38 | | | | 0.18 | | | | 0.15 |
| As reported under new guidance | | | | 0.36 | | | | 0.33 | | | | 0.39 | | | | 0.24 | | | | 0.38 | | | | 0.19 | | | | 0.15 |
CONTACT:
Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
