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| Western Alliance Bancorporation | | |
| One East Washington Street | |
| Phoenix, AZ 85004 | |
| www.westernalliancebancorporation.com | |
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PHOENIX--(BUSINESS WIRE)--April 20, 2017
FIRST QUARTER 2017 FINANCIAL RESULTS |
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| Net income | | Earnings per share | | Net interest margin | | Efficiency ratio | | Book value per
common share |
| $73.4 million | | $0.70 | | 4.63% | | 44.0% | | $18.68 |
| | | 4.48%, excluding acquired loan accretion | | 44.4%, excluding non-operating adjustments | | $15.86, excluding intangible
assets |
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| CEO COMMENTARY: |
"Western Alliance is off to a strong start to the year with $73.4 million in net income and $0.70 EPS in Q1 2017,” commented Robert Sarver, Chairman and Chief Executive Officer of Western Alliance Bancorporation. “We are particularly pleased with our loan growth of $454 million to $13.66 billion, up 3.4% over the prior quarter, and our very strong deposit growth of $806 million to $15.36 billion, up 5.5% over the prior quarter. Asset quality remains strong with a net charge-off rate of 0.04% and non-performing assets to total assets of 0.44%. Our return on average assets and tangible common equity1 rose for the quarter to 1.69% and 17.85%, among the highest in the industry. With the quarter’s increase in tangible book value per share to $15.861, Western Alliance continues to deliver to its shareholders superior income, asset, and capital growth and has set a firm foundation for a strong 2017." |
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| LINKED-QUARTER BASIS | YEAR-OVER-YEAR |
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| FINANCIAL HIGHLIGHTS: |
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| ▪ | Net income and earnings per share of $73.4 million and $0.70, compared to $69.8 million and $0.67, respectively |
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| ▪ | Net operating revenue of $189.2 million, constituting growth of $3.4 million, and an increase in operating non-interest expenses of $5.6 million 1 |
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| ▪ | Operating pre-provision net revenue of $100.9 million, down $2.2 million from $103.1 million 1 |
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| ▪ | Net income of $73.4 million and earnings per share of $0.70, compared to $61.3 million and $0.60, respectively |
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| ▪ | Net operating revenue of $189.2 million, constituting year-over-year growth of 19.9%, or $31.4 million, and an increase in operating non-interest expenses of 16.5%, or $12.5 million1 |
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| ▪ | Operating pre-provision net revenue of $100.9 million, up $18.9 million from $82.1 million 1 |
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| FINANCIAL POSITION RESULTS: |
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| ▪ | Total loans of $13.66 billion, up $454 million |
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| ▪ | Total deposits of $15.36 billion, up $806 million |
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| ▪ | Stockholders' equity of $1.97 billion, up $77 million |
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| ▪ | Increase in total loans of $2.42 billion |
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| ▪ | Total deposits increase of $2.27 billion |
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| ▪ | Increase in stockholders' equity of $309 million |
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| ▪ | Nonperforming assets (nonaccrual loans and repossessed assets) decreased to 0.44% of total assets, from 0.51% |
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| ▪ | Annualized net loan charge-offs (recoveries) to average loans outstanding of 0.04%, compared to (0.03)% |
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| ▪ | Nonperforming assets to total assets of 0.44%, compared to 0.57% |
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| ▪ | Annualized net loan charge-offs to average loans outstanding of 0.04%, compared to 0.08% |
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| ▪ | Net interest margin of 4.63%, compared to 4.57% |
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| ▪ | Return on average assets and return on tangible common equity1 of 1.69% and 17.85%, compared to 1.63% and 17.59%, respectively |
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| ▪ | Tangible common equity ratio of 9.4%, compared to 9.4% 1 |
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| ▪ | Tangible book value per share, net of tax, of $15.86, an increase from $15.17 1 |
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| ▪ | Operating efficiency ratio of 44.4%, compared to 42.4% 1 |
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| ▪ | Net interest margin of 4.63%, compared to 4.58% |
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| ▪ | Return on average assets and return on tangible common equity1 of 1.69% and 17.85%, compared to 1.70% and 18.43%, respectively |
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| ▪ | Tangible common equity ratio of 9.4%, compared to 9.1% 1 |
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| ▪ | Tangible book value per share, net of tax, of $15.86, an increase of 20.5% from $13.16 1 |
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| ▪ | Operating efficiency ratio of 44.4%, compared to 45.6% 1 |
1 See reconciliation of Non-GAAP Financial Measures beginning on page 18.
Income Statement
Net interest income was $179.3 million in the first quarter 2017, an increase of $4.0 million from $175.3 million in the fourth quarter 2016, and an increase of $33.6 million, or 23.1%, compared to the first quarter 2016. Net interest income in the first quarter 2017 includes $6.4 million of total accretion income from acquired loans, compared to $7.0 million in the fourth quarter 2016, and $5.3 million in the first quarter 2016.
The Company’s net interest margin in the first quarter 2017 was 4.63%, an increase from 4.57% in the fourth quarter 2016, and from 4.58% in the first quarter 2016. The increase in net interest margin from the fourth quarter 2016 is attributable to higher yields on loans and securities as a result of rising interest rates. The increase in net interest margin from the first quarter 2016 primarily relates to an increase in acquired loan accretion, partially offset by an increase in interest expense resulting from the issuance of long-term subordinated debt in June 2016, as well as an increase in the cost of interest-bearing deposits.
Operating non-interest income was $9.9 million for the first quarter 2017, compared to $10.5 million for the fourth quarter 2016, and $12.1 million for the first quarter 2016.1
Net operating revenue was $189.2 million for the first quarter 2017, an increase of $3.4 million, compared to $185.8 million for the fourth quarter 2016, and an increase of $31.4 million, or 19.9%, compared to $157.8 million for the first quarter 2016.1
Operating non-interest expense was $88.3 million for the first quarter 2017, compared to $82.7 million for the fourth quarter 2016, and $75.8 million for the first quarter 2016.1 The increase in operating non-interest expense from the prior quarter relates to higher professional fees and compensation costs as the Company continues to build out its infrastructure to support growth and also reflects seasonal compensation costs. The Company’s operating efficiency ratio1 on a tax equivalent basis was 44.4% for the first quarter 2017, compared to 42.4% for the fourth quarter 2016, and 45.6% for the first quarter 2016.
Net income was $73.4 million for the first quarter 2017, an increase of $3.6 million from $69.8 million for the fourth quarter 2016, and an increase of $12.1 million, or 19.6%, from $61.3 million for the first quarter 2016. Earnings per share was $0.70 for the first quarter 2017, compared to $0.67 for the fourth quarter 2016, and $0.60 for the first quarter 2016.
The Company views its operating pre-provision net revenue ("PPNR") as a key metric for assessing the Company’s earnings power, which it defines as net operating revenue less operating non-interest expense. For the first quarter 2017, the Company’s operating PPNR was $100.9 million, down from $103.1 million in the fourth quarter 2016, and up 23.0% from $82.1 million in the first quarter 2016.1 The non-operating items1 for the first quarter 2017 consisted primarily of net gains on sales of investment securities of $0.6 million and a net gain on sales / valuations of repossessed and other assets of $0.5 million.
The Company had 1,564 full-time equivalent employees and 45 offices at March 31, 2017, compared to 1,557 employees and 48 offices at December 31, 2016 and 1,464 employees and 47 offices at March 31, 2016.
Balance Sheet
Gross loans totaled $13.66 billion at March 31, 2017, an increase of $454 million from $13.21 billion at December 31, 2016, and an increase of $2.42 billion from $11.24 billion at March 31, 2016. The year-over-year increase is comprised of $1.28 billion from Hotel Franchise Finance ("HFF") acquisition as of April 20, 2016 and the remainder from organic loan growth. Consistent with accounting principles generally accepted in the United States ("GAAP"), the allowance for credit losses is not carried over in an acquisition because acquired loans are recorded at fair value, which discounts the loans based on expected future cash flows. At March 31, 2017, the allowance for credit losses was 0.94% of total loans, compared to 0.95% at December 31, 2016, and 1.06% at March 31, 2016. The allowance for credit losses as a percent of total loans, adjusted to include credit discounts on acquired loans1, was 1.26% at March 31, 2017, compared to 1.30% at December 31, 2016, and 1.21% at March 31, 2016.
Deposits totaled $15.36 billion at March 31, 2017, an increase of $806 million from $14.55 billion at December 31, 2016, and an increase of $2.27 billion from $13.08 billion at March 31, 2016. The increase from both the prior quarter and from March 31, 2016 is the result of organic deposit growth. Non-interest bearing deposits were $6.11 billion at March 31, 2017, compared to $5.63 billion at December 31, 2016, and $4.64 billion at March 31, 2016. Non-interest bearing deposits comprised 39.8% of total deposits at March 31, 2017, compared to 38.7% at December 31, 2016, and 35.4% at March 31, 2016. The proportion of savings and money market balances to total deposits decreased to 40.7% from 42.1% at December 31, 2016, and from 43.2% at March 31, 2016. Certificates of deposit as a percentage of total deposits were 10.0% at March 31, 2017, compared to 10.0% at December 31, 2016, and 13.1% at March 31, 2016. The Company’s ratio of loans to deposits was 89.0% at March 31, 2017, compared to 90.8% at December 31, 2016, and 85.9% at March 31, 2016.
Borrowings decreased to zero at March 31, 2017, from $80.0 million at December 31, 2016, and $0.2 million at March 31, 2016. The decrease from the prior quarter is due to payoff of FHLB overnight advances. The decrease from the prior year is due to the payoff of short-term federal funds purchased.
Qualifying debt totaled $367 million at March 31, 2017, a decrease from $368 million at December 31, 2016, and an increase of $157 million from $210 million at March 31, 2016. The increase from the prior year is primarily related to the issuance of $175 million in subordinated debt in June 2016.
Stockholders’ equity at March 31, 2017 was $1.97 billion, compared to $1.89 billion at December 31, 2016, and $1.66 billion at March 31, 2016. The increase from the prior year relates primarily to at-the-market stock issuances and net income for the respective period, which was partially offset by valuation declines on available-for-sale investment securities.
At March 31, 2017, tangible common equity, net of tax, was 9.4% of tangible assets1 and total capital was 13.2% of risk-weighted assets. The Company’s tangible book value per share1 was $15.86 at March 31, 2017, up 20.5% from March 31, 2016.
Total assets increased to $18.12 billion at March 31, 2017, from $17.20 billion at December 31, 2016, and increased 18.9% from $15.25 billion at March 31, 2016. The increase in total assets from the prior year relates primarily to the HFF acquisition, organic loan growth, and an increase in investment securities resulting from increased deposits.
Asset Quality
The provision for credit losses was $4.3 million for the first quarter 2017, compared to $1.0 million for the fourth quarter 2016, and $2.5 million for the first quarter 2016. Net loan charge-offs (recoveries) in the first quarter 2017 were $1.3 million, or 0.04% of average loans (annualized), compared to $(0.8) million in net recoveries, or (0.03)%, in the fourth quarter 2016 and $2.3 million in net charge-offs, or 0.08%, in the first quarter 2016.
Nonaccrual loans decreased $5.8 million to $34.5 million during the quarter. Loans past due 90 days and still accruing interest totaled $3.7 million at March 31, 2017, compared to $1.1 million at December 31, 2016, and $4.5 million at March 31, 2016. Loans past due 30-89 days and still accruing interest totaled $10.8 million at quarter end, an increase from $6.3 million at December 31, 2016, and an increase from $9.2 million at March 31, 2016.
Repossessed assets totaled $45.2 million at quarter end, a decrease of $2.6 million from $47.8 million at December 31, 2016, and a decrease of $7.6 million from $52.8 million at March 31, 2016. Adversely graded loans and non-performing assets totaled $388.3 million at quarter end, an increase of $45.5 million from $342.9 million at December 31, 2016, and an increase of $76.3 million from $312.1 million at March 31, 2016.
As the Company’s asset quality and capital remain strong, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 12.6% at March 31, 2017, compared to 11.8% at December 31, 2016, and 13.0% at March 31, 2016.1
1 See reconciliation of Non-GAAP Financial Measures beginning on page 18.
Segment Highlights
The Company's reportable segments are aggregated primarily based on geographic location, services offered, and markets served. The Company's regional segments, which include, Arizona, Nevada, Southern California, and Northern California provide full service banking and related services to their respective markets. The operations from the regional segments correspond to the following banking divisions: Alliance Bank of Arizona, Bank of Nevada and First Independent Bank, Torrey Pines Bank, and Bridge Bank.
The Company's National Business Lines ("NBL") segment provides specialized banking services to niche markets. The Company's NBL reportable segments include Homeowner Associations ("HOA") Services, HFF, Public & Nonprofit Finance, Technology & Innovation, and Other NBLs. These NBLs are managed centrally and are broader in geographic scope than our other segments, though still predominately located within our core market areas. The HOA Services NBL corresponds to the Alliance Association Bank division. The HFF NBL includes the hotel franchise loan portfolio purchased from GE on April 20, 2016. The operations of Public and Nonprofit Finance are combined into one reportable segment. The Technology & Innovation NBL includes the operations of Equity Fund Resources, the Life Sciences Group, the Renewable Resource Group, and Technology Finance. The Other NBLs segment consists of the operations of Corporate Finance, Mortgage Warehouse Lending, and Resort Finance.
The Corporate & Other segment 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 the Company's Arizona, Nevada, Southern California, Northern California, and NBL segments include loan and deposit growth, asset quality, and pre-tax income.
The regional segments reported gross loan balances of $7.75 billion at March 31, 2017, an increase of $202 million during the quarter, and an increase of $273 million during the last twelve months. All regional segments had loan growth during the quarter with Arizona contributing the largest growth of $84 million, followed by Nevada, Southern California, and Northern California with growth of $44 million, $40 million, and $35 million, respectively. The growth in loans during the last twelve months was primarily driven by increases of $225 million in Arizona and $60 million in Nevada, which were partially offset by a decrease of $19 million in Northern California. Total deposits for the regional segments were $12.01 billion, an increase of $509 million during the quarter, and an increase of $1.54 billion during the last twelve months. Arizona and Nevada generated increased deposits during the quarter of $412 million and $165 million, respectively, which was partially offset by a decrease of $82.3 million in Northern California. With the exception of Northern California, each of the regional segments generated increased deposits during the last twelve months, with Arizona contributing the largest increase of $1.07 billion, followed by Southern California and Nevada with increases of $341 million and $267 million, respectively.
Pre-tax income for the regional segments was $72.4 million for the three months ended March 31, 2017, a decrease of $4.1 million from the three months ended December 31, 2016, and an increase of $6.3 million from the three months ended March 31, 2016. Arizona and Southern California each had a decrease in pre-tax income of $2.7 million. These decreases were partially offset by increases in pre-tax income for Nevada and Northern California of $0.5 million and $1.0 million, respectively, compared to the three months ended December 31, 2016. With the exception of Southern California, which had a decrease in pre-tax income of $0.7 million, each regional segment had increases in pre-tax income from the three months ended March 31, 2016, with Arizona and Nevada contributing the largest increases of $5.5 million and $1.1 million, respectively.
The NBL segments reported gross loan balances of $5.91 billion at March 31, 2017, an increase of $256 million during the quarter, and an increase of $2.17 billion during the last twelve months. The increase in loans for the NBL segments compared to the prior quarter relates primarily to the Other NBLs and Public & Nonprofit Finance segments, which increased loans by $178 million and $74 million, respectively. The increases in loans during the last twelve months were driven by HFF (as a result of the $1.28 billion purchase), Other NBLs, and Technology & Innovation segments, which increased loans by $1.28 billion, $617 million, and $166 million, respectively. Total deposits for the NBL segments were $3.26 billion, an increase of $327 million during the quarter, and an increase of $923 million during the last twelve months. The HOA Services and Technology & Innovation segments increased deposits by $223 million and $104 million, respectively, during the quarter. The increase of $923 million during the last twelve months is the result of growth in the HOA Services and Technology & Innovation segments of $585 million and $339 million, respectively.
Pre-tax income for the NBL segments was $37.5 million for the three months ended March 31, 2017, a decrease of $3.0 million from the three months ended December 31, 2016, and an increase of $11.0 million from the three months ended March 31, 2016. The decrease in pre-tax income from the prior quarter relates primarily to the Other NBLs segment, which decreased $3.7 million. This decrease was offset by increases in pre-tax income from the Public & Nonprofit and HOA Services segments of $0.4 million and $0.5 million, respectively. The HFF and HOA Services segments had the largest increases in pre-tax income of $10.6 million and $2.5 million, respectively, from the three months ended March 31, 2016, which were offset by decreases in pre-tax income of $1.2 million and $1.0 million from the Technology & Innovation and Other NBLs segments, respectively.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its first quarter 2017 financial results at 12:00 p.m. ET on Friday, April 21, 2017. Participants may access the call by dialing 1-888-317-6003 and using passcode 3879324 or via live audio webcast using the website link http://services.choruscall.com/links/wal170421.html. 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 2:00 p.m. ET April 21st through 9:00 a.m. ET May 21st by dialing 1-877-344-7529 passcode: 10103883.
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, and future economic performance, including our recent domestic select-service hotel franchise finance loan portfolio acquisition. 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, 2016 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, 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 $18 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies and is ranked #4 on the Forbes 2017 “Best Banks in America” list. Its primary subsidiary, Western Alliance Bank, is the go-to bank for business and succeeds with local teams of experienced bankers who deliver superior service and a full spectrum of deposit, lending, treasury management, international banking and online banking products and services. Western Alliance Bank operates full-service banking divisions: Alliance Bank of Arizona, Bank of Nevada and First Independent Bank, Torrey Pines Bank and Bridge Bank. The bank also serves business customers through a robust national platform of specialized financial services including Corporate Finance, Equity Fund Resources, Hotel Franchise Finance, Life Sciences Group, Mortgage Warehouse Lending, Public and Nonprofit Finance, Renewable Resource Group, Resort Finance, Technology Finance and Alliance Association Bank. For more information, visit westernalliancebancorporation.com.
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| Western Alliance Bancorporation and Subsidiaries | | | | |
| Summary Consolidated Financial Data | | | | | | |
| Unaudited | | | | | | |
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| Selected Balance Sheet Data: | | | | | | |
| | | As of March 31, |
| | | 2017 | | 2016 | | Change % |
| | | (in millions) | | |
| Total assets | | $ | 18,122.5 |
| | $ | 15,248.0 |
| | 18.9 | % |
| Total loans, net of deferred fees | | 13,662.7 |
| | 11,241.4 |
| | 21.5 |
|
| Securities and money market investments | | 2,869.1 |
| | 2,099.9 |
| | 36.6 |
|
| Total deposits | | 15,356.0 |
| | 13,081.7 |
| | 17.4 |
|
| Borrowings | | — |
| | 0.2 |
| | (100.0 | ) |
| Qualifying debt | | 366.9 |
| | 210.4 |
| | 74.4 |
|
| Stockholders' equity | | 1,969.0 |
| | 1,660.2 |
| | 18.6 |
|
| Tangible common equity, net of tax (1) | | 1,671.6 |
| | 1,362.0 |
| | 22.7 |
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| Selected Income Statement Data: | | | | | | |
| | | For the Three Months Ended March 31, |
| | | 2017 | | 2016 | | Change % |
| | | (in thousands, except per share data) | | |
| Interest income | | $ | 192,265 |
| | $ | 154,256 |
| | 24.6 | % |
| Interest expense | | 12,956 |
| | 8,545 |
| | 51.6 |
|
| Net interest income | | 179,309 |
| | 145,711 |
| | 23.1 |
|
| Provision for credit losses | | 4,250 |
| | 2,500 |
| | 70.0 |
|
| Net interest income after provision for credit losses | | 175,059 |
| | 143,211 |
| | 22.2 |
|
| Non-interest income | | 10,544 |
| | 13,133 |
| | (19.7 | ) |
| Non-interest expense | | 87,757 |
| | 75,493 |
| | 16.2 |
|
| Income before income taxes | | 97,846 |
| | 80,851 |
| | 21.0 |
|
| Income tax expense | | 24,489 |
| | 19,519 |
| | 25.5 |
|
| Net income | | $ | 73,357 |
| | $ | 61,332 |
| | 19.6 |
|
| Diluted earnings per share available to common stockholders | | $ | 0.70 |
| | $ | 0.60 |
| | 16.7 |
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| (1) See Reconciliation of Non-GAAP Financial Measures. | | | | |
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| Western Alliance Bancorporation and Subsidiaries | | | | |
| Summary Consolidated Financial Data | | | | | | |
| Unaudited | | | | | | |
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| Common Share Data: | | | | | | |
| | | As of or for the Three Months Ended March 31, |
| | | 2017 | | 2016 | | Change % |
| Diluted earnings per share available to common stockholders | | $ | 0.70 |
| | $ | 0.60 |
| | 16.7 | % |
| Book value per common share | | 18.68 |
| | 16.04 |
| | 16.5 |
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| Tangible book value per share, net of tax (1) | | 15.86 |
| | 13.16 |
| | 20.5 |
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Average shares outstanding
(in thousands): | | | | | | |
| Basic | | 103,987 |
| | 101,895 |
| | 2.1 |
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| Diluted | | 104,836 |
| | 102,538 |
| | 2.2 |
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| Common shares outstanding | | 105,428 |
| | 103,514 |
| | 1.8 |
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| Selected Performance Ratios: | | | | | | |
| Return on average assets (2) | | 1.69 | % | | 1.70 | % | | (0.6 | )% |
| Return on average tangible common equity (1, 2) | | 17.85 |
| | 18.43 |
| | (3.1 | ) |
| Net interest margin (2) | | 4.63 |
| | 4.58 |
| | 1.1 |
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| Net interest spread | | 4.40 |
| | 4.42 |
| | (0.5 | ) |
| Operating efficiency ratio - tax equivalent basis (1) | | 44.40 |
| | 45.58 |
| | (2.6 | ) |
| Loan to deposit ratio | | 88.97 |
| | 85.93 |
| | 3.5 |
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| Asset Quality Ratios: | | | | | | |
| Net charge-offs (recoveries) to average loans outstanding (2) | | 0.04 | % | | 0.08 | % | | (50.0 | )% |
| Nonaccrual loans to gross loans | | 0.25 |
| | 0.30 |
| | (16.7 | ) |
| Nonaccrual loans and repossessed assets to total assets | | 0.44 |
| | 0.57 |
| | (22.8 | ) |
| Loans past due 90 days and still accruing to gross loans | | 0.03 |
| | 0.04 |
| | (25.0 | ) |
| Allowance for credit losses to gross loans | | 0.94 |
| | 1.06 |
| | (11.3 | ) |
| Allowance for credit losses to nonaccrual loans | | 370.45 |
| | 352.72 |
| | 5.0 |
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| Capital Ratios (1): | | | | | | |
| | | Mar 31, 2017 | | Dec 31, 2016 | | Mar 31, 2016 |
| Tangible common equity (1) | | 9.4 | % | | 9.4 | % | | 9.1 | % |
| Common Equity Tier 1 (3) | | 10.1 |
| | 10.0 |
| | 9.9 |
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| Tier 1 Leverage ratio (3) | | 10.2 |
| | 9.9 |
| | 9.9 |
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| Tier 1 Capital (3) | | 10.5 |
| | 10.5 |
| | 10.4 |
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| Total Capital (3) | | 13.2 |
| | 13.2 |
| | 12.3 |
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| (1) | See Reconciliation of Non-GAAP Financial Measures. |
| (2) | Annualized for the three month periods ended March 31, 2017 and 2016. |
| (3) | Capital ratios for March 31, 2017 are preliminary until the Call Report is filed. |
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| Western Alliance Bancorporation and Subsidiaries | | | | |
| Condensed Consolidated Income Statements | | | | |
| Unaudited | | | | |
| | | Three Months Ended March 31, |
| | | 2017 | | 2016 |
| | | (dollars in thousands, except per share data) |
| Interest income: | | | | |
| Loans | | $ | 172,553 |
| | $ | 139,786 |
|
| Investment securities | | 18,114 |
| | 13,508 |
|
| Other | | 1,598 |
| | 962 |
|
| Total interest income | | 192,265 |
| | 154,256 |
|
| Interest expense: | | | | |
| Deposits | | 8,412 |
| | 6,243 |
|
| Qualifying debt | | 4,338 |
| | 2,184 |
|
| Borrowings | | 206 |
| | 118 |
|
| Total interest expense | | 12,956 |
| | 8,545 |
|
| Net interest income | | 179,309 |
| | 145,711 |
|
| Provision for credit losses | | 4,250 |
| | 2,500 |
|
| Net interest income after provision for credit losses | | 175,059 |
| | 143,211 |
|
| Non-interest income: | | | | |
| Service charges | | 4,738 |
| | 4,499 |
|
| Card income | | 1,218 |
| | 1,013 |
|
| Income from bank owned life insurance | | 948 |
| | 930 |
|
| Gain (loss) on sales of investment securities, net | | 635 |
| | 1,001 |
|
| SBA/warrant income | | 516 |
| | 1,006 |
|
| Lending related income and gains (losses) on sale of loans, net | | 492 |
| | 2,935 |
|
| Other | | 1,997 |
| | 1,749 |
|
| Total non-interest income | | 10,544 |
| | 13,133 |
|
| Non-interest expenses: | | | | |
| Salaries and employee benefits | | 51,620 |
| | 44,855 |
|
| Legal, professional and directors' fees | | 8,803 |
| | 5,572 |
|
| Occupancy | | 6,894 |
| | 6,257 |
|
| Data processing | | 5,271 |
| | 4,060 |
|
| Insurance | | 3,228 |
| | 3,323 |
|
| Marketing | | 721 |
| | 657 |
|
| Intangible amortization | | 689 |
| | 697 |
|
| Card expense | | 654 |
| | 887 |
|
| Loan and repossessed asset expenses | | 1,278 |
| | 902 |
|
| Net (gain) loss on sales and valuations of repossessed and other assets | | (543 | ) | | (302 | ) |
| Other | | 9,142 |
| | 8,585 |
|
| Total non-interest expense | | 87,757 |
| | 75,493 |
|
| Income before income taxes | | 97,846 |
| | 80,851 |
|
| Income tax expense | | 24,489 |
| | 19,519 |
|
| Net income available to common stockholders | | $ | 73,357 |
| | $ | 61,332 |
|
| | | | | |
| Earnings per share available to common stockholders: | | | | |
| Diluted shares | | 104,836 |
| | 102,538 |
|
| Diluted earnings per share | | $ | 0.70 |
| | $ | 0.60 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Five Quarter Condensed Consolidated Income Statements | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | | (in thousands, except per share data) |
| Interest income: | | | | | | | | | | |
| Loans | | $ | 172,553 |
| | $ | 168,881 |
| | $ | 167,914 |
| | $ | 160,015 |
| | $ | 139,786 |
|
| Investment securities | | 18,114 |
| | 16,725 |
| | 15,436 |
| | 12,871 |
| | 13,508 |
|
| Other | | 1,598 |
| | 1,805 |
| | 1,400 |
| | 1,203 |
| | 962 |
|
| Total interest income | | 192,265 |
| | 187,411 |
| | 184,750 |
| | 174,089 |
| | 154,256 |
|
| Interest expense: | | | | | | | | | | |
| Deposits | | 8,412 |
| | 7,729 |
| | 8,072 |
| | 7,678 |
| | 6,243 |
|
| Qualifying debt | | 4,338 |
| | 4,252 |
| | 4,048 |
| | 2,514 |
| | 2,184 |
|
| Borrowings | | 206 |
| | 161 |
| | 83 |
| | 211 |
| | 118 |
|
| Total interest expense | | 12,956 |
| | 12,142 |
| | 12,203 |
| | 10,403 |
| | 8,545 |
|
| Net interest income | | 179,309 |
| | 175,269 |
| | 172,547 |
| | 163,686 |
| | 145,711 |
|
| Provision for credit losses | | 4,250 |
| | 1,000 |
| | 2,000 |
| | 2,500 |
| | 2,500 |
|
| Net interest income after provision for credit losses | | 175,059 |
| | 174,269 |
| | 170,547 |
| | 161,186 |
| | 143,211 |
|
| Non-interest income: | | | | | | | | | | |
| Service charges | | 4,738 |
| | 4,865 |
| | 4,916 |
| | 4,544 |
| | 4,499 |
|
| Card income | | 1,218 |
| | 1,170 |
| | 1,177 |
| | 1,078 |
| | 1,013 |
|
| Income from bank owned life insurance | | 948 |
| | 904 |
| | 899 |
| | 1,029 |
| | 930 |
|
| Gains (losses) on sales of investment securities, net | | 635 |
| | 58 |
| | — |
| | — |
| | 1,001 |
|
| SBA/ warrant income | | 516 |
| | 1,353 |
| | 1,457 |
| | 365 |
| | 1,006 |
|
| Lending related income and gains (losses) on sale of loans, net | | 492 |
| | 488 |
| | 459 |
| | (112 | ) | | 2,935 |
|
| Other | | 1,997 |
| | 1,702 |
| | 1,775 |
| | 1,655 |
| | 1,749 |
|
| Total non-interest income | | 10,544 |
| | 10,540 |
| | 10,683 |
| | 8,559 |
| | 13,133 |
|
| Non-interest expenses: | | | | | | | | | | |
| Salaries and employee benefits | | 51,620 |
| | 49,702 |
| | 49,542 |
| | 44,711 |
| | 44,855 |
|
| Legal, professional, and directors' fees | | 8,803 |
| | 7,600 |
| | 5,691 |
| | 5,747 |
| | 5,572 |
|
| Occupancy | | 6,894 |
| | 6,944 |
| | 6,856 |
| | 7,246 |
| | 6,257 |
|
| Data processing | | 5,271 |
| | 4,504 |
| | 4,982 |
| | 5,114 |
| | 4,060 |
|
| Insurance | | 3,228 |
| | 3,468 |
| | 3,144 |
| | 2,963 |
| | 3,323 |
|
| Marketing | | 721 |
| | 1,164 |
| | 678 |
| | 1,097 |
| | 657 |
|
| Intangible amortization | | 689 |
| | 697 |
| | 697 |
| | 697 |
| | 697 |
|
| Card expense | | 654 |
| | 689 |
| | 536 |
| | 824 |
| | 887 |
|
| Loan and repossessed asset expenses | | 1,278 |
| | 477 |
| | 788 |
| | 832 |
| | 902 |
|
| Net (gain) loss on sales and valuations of repossessed and other assets | | (543 | ) | | (34 | ) | | (146 | ) | | 357 |
| | (302 | ) |
| Acquisition / restructure expense | | — |
| | 6,021 |
| | 2,729 |
| | 3,662 |
| | — |
|
| Other | | 9,142 |
| | 7,413 |
| | 9,510 |
| | 8,554 |
| | 8,585 |
|
| Total non-interest expense | | 87,757 |
| | 88,645 |
| | 85,007 |
| | 81,804 |
| | 75,493 |
|
| Income before income taxes | | 97,846 |
| | 96,164 |
| | 96,223 |
| | 87,941 |
| | 80,851 |
|
| Income tax expense | | 24,489 |
| | 26,364 |
| | 29,171 |
| | 26,327 |
| | 19,519 |
|
| Net income available to common stockholders | | $ | 73,357 |
| | $ | 69,800 |
| | $ | 67,052 |
| | $ | 61,614 |
| | $ | 61,332 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Earnings per share available to common stockholders: | | | | | | | | |
| Diluted shares | | 104,836 |
| | 104,765 |
| | 104,564 |
| | 103,472 |
| | 102,538 |
|
| Diluted earnings per share | | $ | 0.70 |
| | $ | 0.67 |
| | $ | 0.64 |
| | $ | 0.60 |
| | $ | 0.60 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Five Quarter Condensed Consolidated Balance Sheets | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | | (in millions, except per share data) |
| Assets: | | | | | | | | | | |
| Cash and due from banks | | $ | 647.0 |
| | $ | 284.5 |
| | $ | 356.1 |
| | $ | 696.2 |
| | $ | 1,031.0 |
|
| Securities and money market investments | | 2,869.1 |
| | 2,767.8 |
| | 2,778.1 |
| | 2,262.6 |
| | 2,099.9 |
|
| Loans held for sale | | 17.8 |
| | 18.9 |
| | 21.3 |
| | 22.3 |
| | 23.6 |
|
| Loans held for investment: | | | | | | | | | | |
| Commercial | | 6,039.1 |
| | 5,855.8 |
| | 5,715.0 |
| | 5,577.6 |
| | 5,378.5 |
|
| Commercial real estate - non-owner occupied | | 3,607.8 |
| | 3,544.0 |
| | 3,623.4 |
| | 3,601.3 |
| | 2,291.0 |
|
| Commercial real estate - owner occupied | | 2,043.4 |
| | 2,013.3 |
| | 1,984.0 |
| | 2,008.3 |
| | 2,032.3 |
|
| Construction and land development | | 1,601.7 |
| | 1,478.1 |
| | 1,379.7 |
| | 1,333.5 |
| | 1,179.9 |
|
| Residential real estate | | 309.9 |
| | 259.4 |
| | 271.8 |
| | 293.0 |
| | 302.4 |
|
| Consumer | | 43.0 |
| | 39.0 |
| | 38.4 |
| | 41.8 |
| | 33.7 |
|
| Gross loans and deferred fees, net | | 13,644.9 |
| | 13,189.6 |
| | 13,012.3 |
| | 12,855.5 |
| | 11,217.8 |
|
| Allowance for credit losses | | (127.6 | ) | | (124.7 | ) | | (122.9 | ) | | (122.1 | ) | | (119.2 | ) |
| Loans, net | | 13,517.3 |
| | 13,064.9 |
| | 12,889.4 |
| | 12,733.4 |
| | 11,098.6 |
|
| Premises and equipment, net | | 120.0 |
| | 119.8 |
| | 121.3 |
| | 120.5 |
| | 119.8 |
|
| Other assets acquired through foreclosure, net | | 45.2 |
| | 47.8 |
| | 49.6 |
| | 49.8 |
| | 52.8 |
|
| Bank owned life insurance | | 165.5 |
| | 164.5 |
| | 163.6 |
| | 164.3 |
| | 163.4 |
|
| Goodwill and other intangibles, net | | 302.1 |
| | 302.9 |
| | 303.6 |
| | 304.3 |
| | 304.0 |
|
| Other assets | | 438.5 |
| | 429.7 |
| | 359.6 |
| | 375.3 |
| | 354.9 |
|
| Total assets | | $ | 18,122.5 |
| | $ | 17,200.8 |
| | $ | 17,042.6 |
| | $ | 16,728.7 |
| | $ | 15,248.0 |
|
| Liabilities and Stockholders' Equity: | | | | | | | | | | |
| Liabilities: | | | | | | | | | | |
| Deposits | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 6,114.1 |
| | $ | 5,632.9 |
| | $ | 5,624.8 |
| | $ | 5,275.1 |
| | $ | 4,635.2 |
|
| Interest bearing: | | | | | | | | | | |
| Demand | | 1,449.3 |
| | 1,346.7 |
| | 1,256.7 |
| | 1,278.1 |
| | 1,088.2 |
|
| Savings and money market | | 6,253.8 |
| | 6,120.9 |
| | 5,969.6 |
| | 6,005.8 |
| | 5,650.9 |
|
| Time certificates | | 1,538.8 |
| | 1,449.3 |
| | 1,592.1 |
| | 1,642.3 |
| | 1,707.4 |
|
| Total deposits | | 15,356.0 |
| | 14,549.8 |
| | 14,443.2 |
| | 14,201.3 |
| | 13,081.7 |
|
| Customer repurchase agreements | | 35.7 |
| | 41.7 |
| | 44.4 |
| | 38.5 |
| | 36.1 |
|
| Total customer funds | | 15,391.7 |
| | 14,591.5 |
| | 14,487.6 |
| | 14,239.8 |
| | 13,117.8 |
|
| Borrowings | | — |
| | 80.0 |
| | — |
| | — |
| | 0.2 |
|
| Qualifying debt | | 366.9 |
| | 367.9 |
| | 382.9 |
| | 382.1 |
| | 210.4 |
|
| Accrued interest payable and other liabilities | | 394.9 |
| | 269.9 |
| | 314.7 |
| | 310.6 |
| | 259.4 |
|
| Total liabilities | | 16,153.5 |
| | 15,309.3 |
| | 15,185.2 |
| | 14,932.5 |
| | 13,587.8 |
|
| Stockholders' Equity: | | | | | | | | | | |
| Common stock and additional paid-in capital | | 1,370.3 |
| | 1,373.8 |
| | 1,368.4 |
| | 1,364.0 |
| | 1,302.9 |
|
| Retained earnings | | 595.8 |
| | 522.4 |
| | 452.6 |
| | 385.6 |
| | 324.0 |
|
| Accumulated other comprehensive income (loss) | | 2.9 |
| | (4.7 | ) | | 36.4 |
| | 46.6 |
| | 33.3 |
|
| Total stockholders' equity | | 1,969.0 |
| | 1,891.5 |
| | 1,857.4 |
| | 1,796.2 |
| | 1,660.2 |
|
| Total liabilities and stockholders' equity | | $ | 18,122.5 |
| | $ | 17,200.8 |
| | $ | 17,042.6 |
| | $ | 16,728.7 |
| | $ | 15,248.0 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Changes in the Allowance For Credit Losses | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | | (in thousands) |
| Balance, beginning of period | | $ | 124,704 |
| | $ | 122,884 |
| | $ | 122,104 |
| | $ | 119,227 |
| | $ | 119,068 |
|
| Provision for credit losses | | 4,250 |
| | 1,000 |
| | 2,000 |
| | 2,500 |
| | 2,500 |
|
| Recoveries of loans previously charged-off: | | | | | | | | | | |
| Commercial and industrial | | 328 |
| | 1,144 |
| | 466 |
| | 804 |
| | 1,576 |
|
| Commercial real estate - non-owner occupied | | 355 |
| | 691 |
| | 230 |
| | 343 |
| | 3,595 |
|
| Commercial real estate - owner occupied | | 178 |
| | 45 |
| | 291 |
| | 427 |
| | 70 |
|
| Construction and land development | | 277 |
| | 30 |
| | 302 |
| | 58 |
| | 95 |
|
| Residential real estate | | 251 |
| | 287 |
| | 179 |
| | 153 |
| | 257 |
|
| Consumer | | 49 |
| | 11 |
| | 21 |
| | 43 |
| | 67 |
|
| Total recoveries | | 1,438 |
| | 2,208 |
| | 1,489 |
| | 1,828 |
| | 5,660 |
|
| Loans charged-off: | | | | | | | | | | |
| Commercial and industrial | | 2,595 |
| | 1,267 |
| | 2,558 |
| | 1,161 |
| | 7,491 |
|
| Commercial real estate - non-owner occupied | | — |
| | 1 |
| | — |
| | — |
| | — |
|
| Commercial real estate - owner occupied | | — |
| | 1 |
| | 72 |
| | 244 |
| | 410 |
|
| Construction and land development | | — |
| | 18 |
| | — |
| | — |
| | — |
|
| Residential real estate | | 115 |
| | 60 |
| | 79 |
| | — |
| | 26 |
|
| Consumer | | 33 |
| | 41 |
| | — |
| | 46 |
| | 74 |
|
| Total loans charged-off | | 2,743 |
| | 1,388 |
| | 2,709 |
| | 1,451 |
| | 8,001 |
|
| Net loan charge-offs (recoveries) | | 1,305 |
| | (820 | ) | | 1,220 |
| | (377 | ) | | 2,341 |
|
| Balance, end of period | | $ | 127,649 |
| | $ | 124,704 |
| | $ | 122,884 |
| | $ | 122,104 |
| | $ | 119,227 |
|
| | | | | | | | | | | |
| Net charge-offs (recoveries) to average loans- annualized | | 0.04 | % | | (0.03 | )% | | 0.04 | % | | (0.01 | )% | | 0.08 | % |
| | | | | | | | | | | |
| Allowance for credit losses to gross loans | | 0.94 | % | | 0.95 | % | | 0.94 | % | | 0.95 | % | | 1.06 | % |
| Allowance for credit losses to gross loans, adjusted for acquisition accounting (1) | | 1.26 |
| | 1.30 |
| | 1.37 |
| | 1.42 |
| | 1.21 |
|
| Allowance for credit losses to nonaccrual loans | | 370.45 |
| | 309.65 |
| | 302.61 |
| | 307.68 |
| | 352.72 |
|
| | | | | | | | | | | |
| Nonaccrual loans | | $ | 34,458 |
| | $ | 40,272 |
| | $ | 40,608 |
| | $ | 39,685 |
| | $ | 33,802 |
|
| Nonaccrual loans to gross loans | | 0.25 | % | | 0.31 | % | | 0.31 | % | | 0.31 | % | | 0.30 | % |
| Repossessed assets | | $ | 45,200 |
| | $ | 47,815 |
| | $ | 49,619 |
| | $ | 49,842 |
| | $ | 52,776 |
|
| Nonaccrual loans and repossessed assets to total assets | | 0.44 | % | | 0.51 | % | | 0.53 | % | | 0.54 | % | | 0.57 | % |
| | | | | | | | | | | |
| Loans past due 90 days, still accruing | | $ | 3,659 |
| | $ | 1,067 |
| | $ | 2,817 |
| | $ | 6,991 |
| | $ | 4,488 |
|
| Loans past due 90 days and still accruing to gross loans | | 0.03 | % | | 0.01 | % | | 0.02 | % | | 0.05 | % | | 0.04 | % |
| Loans past due 30 to 89 days, still accruing | | $ | 10,764 |
| | $ | 6,294 |
| | $ | 18,446 |
| | $ | 3,475 |
| | $ | 9,207 |
|
| Loans past due 30 to 89 days, still accruing to gross loans | | 0.08 | % | | 0.05 | % | | 0.14 | % | | 0.03 | % | | 0.08 | % |
| | | | | | | | | | | |
| Special mention loans | | $ | 175,184 |
| | $ | 148,144 |
| | $ | 134,018 |
| | $ | 154,167 |
| | $ | 133,036 |
|
| Special mention loans to gross loans | | 1.28 | % | | 1.12 | % | | 1.03 | % | | 1.20 | % | | 1.19 | % |
| | | | | | | | | | | |
| Classified loans on accrual | | $ | 133,483 |
| | $ | 106,644 |
| | $ | 110,650 |
| | $ | 119,939 |
| | $ | 92,435 |
|
| Classified loans on accrual to gross loans | | 0.98 | % | | 0.81 | % | | 0.85 | % | | 0.93 | % | | 0.82 | % |
| Classified assets | | $ | 236,786 |
| | $ | 211,782 |
| | $ | 212,286 |
| | $ | 219,319 |
| | $ | 187,929 |
|
| Classified assets to total assets | | 1.31 | % | | 1.23 | % | | 1.25 | % | | 1.31 | % | | 1.23 | % |
| | | | | | | | | | | |
| (1) See Reconciliation of Non-GAAP Financial Measures. | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Analysis of Average Balances, Yields and Rates | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | Three Months Ended |
| | | March 31, 2017 | | December 31, 2016 |
| | | Average
Balance | | Interest | | Average Yield /
Cost | | Average
Balance | | Interest | | Average Yield /
Cost |
| | | ($ in millions) | | ($ in thousands) | | | | ($ in millions) | | ($ in thousands) | | |
| Interest earning assets | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | |
| Commercial | | $ | 5,753.7 |
| | $ | 68,404 |
| | 5.24 | % | | $ | 5,656.4 |
| | $ | 66,674 |
| | 5.19 | % |
| CRE - non-owner occupied | | 3,534.8 |
| | 53,506 |
| | 6.05 |
| | 3,581.1 |
| | 51,565 |
| | 5.76 |
|
| CRE - owner occupied | | 1,998.0 |
| | 24,726 |
| | 4.95 |
| | 1,993.3 |
| | 24,897 |
| | 5.00 |
|
| Construction and land development | | 1,510.8 |
| | 22,102 |
| | 5.85 |
| | 1,431.9 |
| | 22,094 |
| | 6.17 |
|
| Residential real estate | | 271.9 |
| | 3,023 |
| | 4.45 |
| | 264.3 |
| | 2,926 |
| | 4.43 |
|
| Consumer | | 38.5 |
| | 493 |
| | 5.12 |
| | 38.7 |
| | 468 |
| | 4.84 |
|
| Loans held for sale | | 18.8 |
| | 299 |
| | 6.36 |
| | 20.2 |
| | 257 |
| | 5.09 |
|
| Total loans (1), (2), (3) | | 13,126.5 |
| | 172,553 |
| | 5.47 |
| | 12,985.9 |
| | 168,881 |
| | 5.41 |
|
| Securities: | | | | | | | | | | | | |
| Securities - taxable | | 2,105.2 |
| | 12,437 |
| | 2.36 |
| | 2,142.6 |
| | 11,482 |
| | 2.14 |
|
| Securities - tax-exempt | | 604.3 |
| | 5,677 |
| | 5.57 |
| | 591.2 |
| | 5,243 |
| | 5.25 |
|
| Total securities (1) | | 2,709.5 |
| | 18,114 |
| | 3.08 |
| | 2,733.8 |
| | 16,725 |
| | 2.81 |
|
| Other | | 482.0 |
| | 1,598 |
| | 1.33 |
| | 430.0 |
| | 1,805 |
| | 1.68 |
|
| Total interest earning assets | | 16,318.0 |
| | 192,265 |
| | 4.95 |
| | 16,149.7 |
| | 187,411 |
| | 4.87 |
|
| Non-interest earning assets | | | | | | | | | | | | |
| Cash and due from banks | | 142.7 |
| | | | | | 146.0 |
| | | | |
| Allowance for credit losses | | (125.7 | ) | | | | | | (122.7 | ) | | | | |
| Bank owned life insurance | | 164.8 |
| | | | | | 163.9 |
| | | | |
| Other assets | | 900.5 |
| | | | | | 844.0 |
| | | | |
| Total assets | | $ | 17,400.3 |
| | | | | | $ | 17,180.9 |
| | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | $ | 1,434.8 |
| | $ | 805 |
| | 0.22 | % | | $ | 1,295.6 |
| | $ | 660 |
| | 0.20 | % |
| Savings and money market | | 6,069.0 |
| | 5,312 |
| | 0.35 |
| | 6,004.4 |
| | 5,043 |
| | 0.34 |
|
| Time certificates of deposit | | 1,484.9 |
| | 2,295 |
| | 0.62 |
| | 1,507.0 |
| | 2,026 |
| | 0.54 |
|
| Total interest-bearing deposits | | 8,988.7 |
| | 8,412 |
| | 0.37 |
| | 8,807.0 |
| | 7,729 |
| | 0.35 |
|
| Short-term borrowings | | 110.9 |
| | 206 |
| | 0.74 |
| | 73.5 |
| | 161 |
| | 0.88 |
|
| Qualifying debt | | 354.1 |
| | 4,338 |
| | 4.90 |
| | 365.4 |
| | 4,252 |
| | 4.65 |
|
| Total interest-bearing liabilities | | 9,453.7 |
| | 12,956 |
| | 0.55 |
| | 9,245.9 |
| | 12,142 |
| | 0.53 |
|
| Non-interest-bearing liabilities | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | 5,719.2 |
| | | | | | 5,752.0 |
| | | | |
| Other liabilities | | 280.6 |
| | | | | | 292.5 |
| | | | |
| Stockholders’ equity | | 1,946.8 |
| | | | | | 1,890.5 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 17,400.3 |
| | | | | | $ | 17,180.9 |
| | | | |
| Net interest income and margin (4) | | | | $ | 179,309 |
| | 4.63 | % | | | | $ | 175,269 |
| | 4.57 | % |
| Net interest spread (5) | | | | | | 4.40 | % | | | | | | 4.34 | % |
| | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax-equivalent basis. The taxable-equivalent adjustment was $9.7 million and $8.6 million for the three months ended March 31, 2017 and December 31, 2016, respectively. |
| (2) Included in the yield computation are net loan fees of $6.6 million and accretion on acquired loans of $6.4 million for the three months ended March 31, 2017, compared to $8.3 million and $7.0 million for the three months ended December 31 2016, respectively. |
| (3) Includes non-accrual loans. |
| (4) Net interest margin is computed by dividing net interest income by total average earning assets. |
| (5) Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Analysis of Average Balances, Yields and Rates | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2017 | | 2016 |
| | | Average
Balance | | Interest | | Average Yield /
Cost | | Average
Balance | | Interest | | Average Yield /
Cost |
| | | ($ in millions) | | ($ in thousands) | | | | ($ in millions) | | ($ in thousands) | | |
| Interest earning assets | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | |
| Commercial | | $ | 5,753.7 |
| | $ | 68,404 |
| | 5.24 | % | | $ | 5,160.6 |
| | $ | 60,925 |
| | 5.24 | % |
| CRE - non-owner occupied | | 3,534.8 |
| | 53,506 |
| | 6.05 |
| | 2,272.4 |
| | 30,953 |
| | 5.45 |
|
| CRE - owner occupied | | 1,998.0 |
| | 24,726 |
| | 4.95 |
| | 2,061.4 |
| | 26,186 |
| | 5.08 |
|
| Construction and land development | | 1,510.8 |
| | 22,102 |
| | 5.85 |
| | 1,166.1 |
| | 17,496 |
| | 6.00 |
|
| Residential real estate | | 271.9 |
| | 3,023 |
| | 4.45 |
| | 311.5 |
| | 3,509 |
| | 4.51 |
|
| Consumer | | 38.5 |
| | 493 |
| | 5.12 |
| | 28.8 |
| | 366 |
| | 5.08 |
|
| Loans held for sale | | 18.8 |
| | 299 |
| | 6.36 |
| | 24.1 |
| | 351 |
| | 5.82 |
|
| Total loans (1), (2), (3) | | 13,126.5 |
| | 172,553 |
| | 5.47 |
| | 11,024.9 |
| | 139,786 |
| | 5.31 |
|
| Securities: | | | | | | | | | | | | |
| Securities - taxable | | 2,105.2 |
| | 12,437 |
| | 2.36 |
| | 1,568.4 |
| | 9,337 |
| | 2.38 |
|
| Securities - tax-exempt | | 604.3 |
| | 5,677 |
| | 5.57 |
| | 454.7 |
| | 4,171 |
| | 5.23 |
|
| Total securities (1) | | 2,709.5 |
| | 18,114 |
| | 3.08 |
| | 2,023.1 |
| | 13,508 |
| | 3.02 |
|
| Other | | 482.0 |
| | 1,598 |
| | 1.33 |
| | 417.5 |
| | 962 |
| | 0.92 |
|
| Total interest earning assets | | 16,318.0 |
| | 192,265 |
| | 4.95 |
| | 13,465.5 |
| | 154,256 |
| | 4.83 |
|
| Non-interest earning assets | | | | | | | |
| | | | |
| Cash and due from banks | | 142.7 |
| | | | | | 140.8 |
| | | | |
| Allowance for credit losses | | (125.7 | ) | | | | | | (121.5 | ) | | | | |
| Bank owned life insurance | | 164.8 |
| | | | | | 162.8 |
| | | | |
| Other assets | | 900.5 |
| | | | | | 822.5 |
| | | | |
| Total assets | | $ | 17,400.3 |
| | | | | | $ | 14,470.1 |
| | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | $ | 1,434.8 |
| | $ | 805 |
| | 0.22 | % | | $ | 1,091.9 |
| | $ | 455 |
| | 0.17 | % |
| Savings and money market | | 6,069.0 |
| | 5,312 |
| | 0.35 |
| | 5,333.9 |
| | 4,034 |
| | 0.30 |
|
| Time certificates of deposit | | 1,484.9 |
| | 2,295 |
| | 0.62 |
| | 1,561.5 |
| | 1,754 |
| | 0.45 |
|
| Total interest-bearing deposits | | 8,988.7 |
| | 8,412 |
| | 0.37 |
| | 7,987.3 |
| | 6,243 |
| | 0.31 |
|
| Short-term borrowings | | 110.9 |
| | 206 |
| | 0.74 |
| | 52.8 |
| | 118 |
| | 0.89 |
|
| Qualifying debt | | 354.1 |
| | 4,338 |
| | 4.90 |
| | 199.4 |
| | 2,184 |
| | 4.38 |
|
| Total interest-bearing liabilities | | 9,453.7 |
| | 12,956 |
| | 0.55 |
| | 8,239.5 |
| | 8,545 |
| | 0.41 |
|
| Non-interest-bearing liabilities | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | 5,719.2 |
| | | | | | 4,350.1 |
| | | | |
| Other liabilities | | 280.6 |
| | | | | | 244.5 |
| | | | |
| Stockholders’ equity | | 1,946.8 |
| | | | | | 1,636.0 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 17,400.3 |
| | | | | | $ | 14,470.1 |
| | | | |
| Net interest income and margin (4) | | | | $ | 179,309 |
| | 4.63 | % | | | | $ | 145,711 |
| | 4.58 | % |
| Net interest spread (5) | | | | | | 4.40 | % | | | | | | 4.42 | % |
| | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax-equivalent basis. The taxable-equivalent adjustment was $9.7 million and $8.4 million for the three months ended March 31, 2017 and 2016, respectively. |
| (2) Included in the yield computation are net loan fees of $6.6 million and accretion on acquired loans of $6.4 million for the three months ended March 31, 2017, compared to $6.5 million and $5.3 million for the three months ended March 31, 2016, respectively. |
| (3) Includes non-accrual loans. |
| (4) Net interest margin is computed by dividing net interest income by total average earning assets. |
| (5) Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest bearing-liabilities. |
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Operating Segment Results | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | | | | | | | | | |
| Balance Sheet: | | | | Regional Segments |
| | | Consolidated Company | | Arizona | | Nevada | | Southern California | | Northern California |
| At March 31, 2017 | | (dollars in millions) |
| Assets: | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | 3,516.1 |
| | $ | 1.8 |
| | $ | 8.9 |
| | $ | 1.9 |
| | $ | 1.7 |
|
| Loans, net of deferred loan fees and costs | | 13,662.7 |
| | 3,039.7 |
| | 1,769.3 |
| | 1,806.7 |
| | 1,130.1 |
|
| Less: allowance for credit losses | | (127.6 | ) | | (30.3 | ) | | (18.7 | ) | | (20.1 | ) | | (9.4 | ) |
| Total loans | | 13,535.1 |
| | 3,009.4 |
| | 1,750.6 |
| | 1,786.6 |
| | 1,120.7 |
|
| Other assets acquired through foreclosure, net | | 45.2 |
| | 5.0 |
| | 17.1 |
| | — |
| | 0.2 |
|
| Goodwill and other intangible assets, net | | 302.1 |
| | — |
| | 23.4 |
| | — |
| | 157.2 |
|
| Other assets | | 724.0 |
| | 42.3 |
| | 58.9 |
| | 13.9 |
| | 13.5 |
|
| Total assets | | $ | 18,122.5 |
| | $ | 3,058.5 |
| | $ | 1,858.9 |
| | $ | 1,802.4 |
| | $ | 1,293.3 |
|
| Liabilities: | | | | | | | | | | |
| Deposits | | $ | 15,356.0 |
| | $ | 4,255.0 |
| | $ | 3,896.1 |
| | $ | 2,397.2 |
| | $ | 1,461.3 |
|
| Borrowings and qualifying debt | | 366.9 |
| | — |
| | — |
| | — |
| | — |
|
| Other liabilities | | 430.6 |
| | 13.4 |
| | 27.4 |
| | 4.5 |
| | 13.6 |
|
| Total liabilities | | 16,153.5 |
| | 4,268.4 |
| | 3,923.5 |
| | 2,401.7 |
| | 1,474.9 |
|
| Allocated equity: | | 1,969.0 |
| | 365.7 |
| | 259.0 |
| | 205.2 |
| | 284.6 |
|
| Total liabilities and stockholders' equity | | $ | 18,122.5 |
| | $ | 4,634.1 |
| | $ | 4,182.5 |
| | $ | 2,606.9 |
| | $ | 1,759.5 |
|
| Excess funds provided (used) | | — |
| | 1,575.6 |
| | 2,323.6 |
| | 804.5 |
| | 466.2 |
|
| | | | | | | | | | | |
| No. of offices | | 45 |
| | 9 |
| | 16 |
| | 9 |
| | 3 |
|
| No. of full-time equivalent employees | | 1,564 |
| | 169 |
| | 227 |
| | 176 |
| | 162 |
|
| | | | | | | | | | | |
| Income Statement: | | | | | | | | | | |
| | | | | | | | | | | |
| Three Months Ended March 31, 2017: | | (in thousands) |
| Net interest income (expense) | | $ | 179,309 |
| | $ | 43,907 |
| | $ | 35,296 |
| | $ | 25,218 |
| | $ | 22,035 |
|
| Provision for credit losses | | 4,250 |
| | 14 |
| | (211 | ) | | 91 |
| | 396 |
|
| Net interest income (expense) after provision for credit losses | | 175,059 |
| | 43,893 |
| | 35,507 |
| | 25,127 |
| | 21,639 |
|
| Non-interest income | | 10,544 |
| | 1,113 |
| | 2,133 |
| | 743 |
| | 2,113 |
|
| Non-interest expense | | (87,757 | ) | | (18,622 | ) | | (15,870 | ) | | (12,703 | ) | | (12,709 | ) |
| Income (loss) before income taxes | | 97,846 |
| | 26,384 |
| | 21,770 |
| | 13,167 |
| | 11,043 |
|
| Income tax expense (benefit) | | 24,489 |
| | 10,350 |
| | 7,620 |
| | 5,537 |
| | 4,643 |
|
| Net income | | $ | 73,357 |
| | $ | 16,034 |
| | $ | 14,150 |
| | $ | 7,630 |
| | $ | 6,400 |
|
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Operating Segment Results | | | |
| Unaudited | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Balance Sheet: | | National Business Lines | | |
| | | HOA
Services | | Public & Nonprofit Finance | | Technology & Innovation | | Hotel Franchise Finance | | Other NBLs | | Corporate & Other |
| At March 31, 2017 | | (dollars in millions) |
| Assets: | | | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 3,501.8 |
|
| Loans, net of deferred loan fees and costs | | 132.7 |
| | 1,528.7 |
| | 1,011.2 |
| | 1,279.6 |
| | 1,955.1 |
| | 9.6 |
|
| Less: allowance for credit losses | | (1.4 | ) | | (16.0 | ) | | (9.7 | ) | | (1.3 | ) | | (20.0 | ) | | (0.7 | ) |
| Total loans | | 131.3 |
| | 1,512.7 |
| | 1,001.5 |
| | 1,278.3 |
| | 1,935.1 |
| | 8.9 |
|
| Other assets acquired through foreclosure, net | | — |
| | — |
| | — |
| | — |
| | — |
| | 22.9 |
|
| Goodwill and other intangible assets, net | | — |
| | — |
| | 121.4 |
| | 0.1 |
| | — |
| | — |
|
| Other assets | | 0.4 |
| | 11.9 |
| | 5.7 |
| | 5.4 |
| | 2.8 |
| | 569.2 |
|
| Total assets | | $ | 131.7 |
| | $ | 1,524.6 |
| | $ | 1,128.6 |
| | $ | 1,283.8 |
| | $ | 1,937.9 |
| | $ | 4,102.8 |
|
| Liabilities: | | | | | | | | | | | | |
| Deposits | | $ | 2,112.8 |
| | $ | — |
| | $ | 1,142.2 |
| | $ | — |
| | $ | — |
| | $ | 91.4 |
|
| Borrowings and qualifying debt | | — |
| | — |
| | — |
| | — |
| | — |
| | 366.9 |
|
| Other liabilities | | 1.8 |
| | 43.1 |
| | 0.8 |
| | 0.6 |
| | 132.6 |
| | 192.8 |
|
| Total liabilities | | 2,114.6 |
| | 43.1 |
| | 1,143.0 |
| | 0.6 |
| | 132.6 |
| | 651.1 |
|
| Allocated equity: | | 72.9 |
| | 122.3 |
| | 225.5 |
| | 105.5 |
| | 162.2 |
| | 166.1 |
|
| Total liabilities and stockholders' equity | | $ | 2,187.5 |
| | $ | 165.4 |
| | $ | 1,368.5 |
| | $ | 106.1 |
| | $ | 294.8 |
| | $ | 817.2 |
|
| Excess funds provided (used) | | 2,055.8 |
| | (1,359.2 | ) | | 239.9 |
| | (1,177.7 | ) | | (1,643.1 | ) | | (3,285.6 | ) |
| | | | | | | | | | | | | |
| No. of offices | | 1 |
| | 1 |
| | 8 |
| | 1 |
| | 4 |
| | (7 | ) |
| No. of full-time equivalent employees | | 62 |
| | 6 |
| | 57 |
| | 20 |
| | 31 |
| | 654 |
|
| | | | | | | | | | | | | |
| Income Statement: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended March 31, 2017: | | (in thousands) |
| Net interest income (expense) | | $ | 12,748 |
| | $ | 6,485 |
| | $ | 18,166 |
| | $ | 13,581 |
| | $ | 14,143 |
| | $ | (12,270 | ) |
| Provision for credit losses | | 127 |
| | 509 |
| | 296 |
| | — |
| | 3,527 |
| | (499 | ) |
| Net interest income (expense) after provision for credit losses | | 12,621 |
| | 5,976 |
| | 17,870 |
| | 13,581 |
| | 10,616 |
| | (11,771 | ) |
| Non-interest income | | 141 |
| | 15 |
| | 1,873 |
| | — |
| | 721 |
| | 1,692 |
|
| Non-interest expense | | (7,147 | ) | | (2,253 | ) | | (8,779 | ) | | (2,988 | ) | | (4,721 | ) | | (1,965 | ) |
| Income (loss) before income taxes | | 5,615 |
| | 3,738 |
| | 10,964 |
| | 10,593 |
| | 6,616 |
| | (12,044 | ) |
| Income tax expense (benefit) | | 2,106 |
| | 1,402 |
| | 4,111 |
| | 3,972 |
| | 2,481 |
| | (17,733 | ) |
| Net income | | $ | 3,509 |
| | $ | 2,336 |
| | $ | 6,853 |
| | $ | 6,621 |
| | $ | 4,135 |
| | $ | 5,689 |
|
| | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Operating Segment Results | | | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | | | | | | | | | |
| Balance Sheet: | | | | Regional Segments |
| | | Consolidated Company | | Arizona | | Nevada | | Southern California | | Northern California |
| At December 31, 2016 | | (dollars in millions) |
| Assets: | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | 3,052.3 |
| | $ | 1.9 |
| | $ | 10.1 |
| | $ | 2.1 |
| | $ | 1.9 |
|
| Loans, net of deferred loan fees and costs | | 13,208.5 |
| | 2,955.9 |
| | 1,725.5 |
| | 1,766.8 |
| | 1,095.4 |
|
| Less: allowance for credit losses | | (124.7 | ) | | (30.1 | ) | | (18.5 | ) | | (19.4 | ) | | (8.8 | ) |
| Total loans | | 13,083.8 |
| | 2,925.8 |
| | 1,707.0 |
| | 1,747.4 |
| | 1,086.6 |
|
| Other assets acquired through foreclosure, net | | 47.8 |
| | 6.2 |
| | 18.0 |
| | — |
| | 0.3 |
|
| Goodwill and other intangible assets, net | | 302.9 |
| | — |
| | 23.7 |
| | — |
| | 157.5 |
|
| Other assets | | 714.0 |
| | 42.9 |
| | 58.8 |
| | 14.5 |
| | 14.3 |
|
| Total assets | | $ | 17,200.8 |
| | $ | 2,976.8 |
| | $ | 1,817.6 |
| | $ | 1,764.0 |
| | $ | 1,260.6 |
|
| Liabilities: | | | | | | | | | | |
| Deposits | | $ | 14,549.8 |
| | $ | 3,843.4 |
| | $ | 3,731.5 |
| | $ | 2,382.6 |
| | $ | 1,543.6 |
|
| Borrowings and qualifying debt | | 447.9 |
| | — |
| | — |
| | — |
| | — |
|
| Other liabilities | | 311.6 |
| | 12.8 |
| | 28.3 |
| | 12.9 |
| | 12.4 |
|
| Total liabilities | | 15,309.3 |
| | 3,856.2 |
| | 3,759.8 |
| | 2,395.5 |
| | 1,556.0 |
|
| Allocated equity: | | 1,891.5 |
| | 346.6 |
| | 250.7 |
| | 201.6 |
| | 283.7 |
|
| Total liabilities and stockholders' equity | | $ | 17,200.8 |
| | $ | 4,202.8 |
| | $ | 4,010.5 |
| | $ | 2,597.1 |
| | $ | 1,839.7 |
|
| Excess funds provided (used) | | — |
| | 1,226.0 |
| | 2,192.9 |
| | 833.1 |
| | 579.1 |
|
| | | | | | | | | | | |
| No. of offices | | 48 |
| | 10 |
| | 18 |
| | 9 |
| | 3 |
|
| No. of full-time equivalent employees | | 1,557 |
| | 168 |
| | 225 |
| | 175 |
| | 167 |
|
| | | | | | | | | | | |
| Income Statements: | | | | | | | | | | |
| | | | | | | | | | | |
| Three Months Ended March 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 145,711 |
| | $ | 38,456 |
| | $ | 32,575 |
| | $ | 24,428 |
| | $ | 23,195 |
|
| Provision for (recovery of) credit losses | | 2,500 |
| | 6,773 |
| | (813 | ) | | 30 |
| | 1,042 |
|
| Net interest income (expense) after provision for credit losses | | 143,211 |
| | 31,683 |
| | 33,388 |
| | 24,398 |
| | 22,153 |
|
| Non-interest income | | 13,133 |
| | 3,681 |
| | 2,059 |
| | 660 |
| | 2,426 |
|
| Non-interest expense | | (75,493 | ) | | (14,456 | ) | | (14,746 | ) | | (11,234 | ) | | (13,967 | ) |
| Income (loss) before income taxes | | 80,851 |
| | 20,908 |
| | 20,701 |
| | 13,824 |
| | 10,612 |
|
| Income tax expense (benefit) | | 19,519 |
| | 8,202 |
| | 7,245 |
| | 5,813 |
| | 4,463 |
|
| Net income (loss) | | $ | 61,332 |
| | $ | 12,706 |
| | $ | 13,456 |
| | $ | 8,011 |
| | $ | 6,149 |
|
| | | | | | | | | | | |
| Three Months Ended December 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 175,269 |
| | $ | 45,322 |
| | $ | 35,491 |
| | $ | 26,823 |
| | $ | 20,890 |
|
| Provision for (recovery of) credit losses | | 1,000 |
| | (963 | ) | | 189 |
| | (724 | ) | | 475 |
|
| Net interest income (expense) after provision for credit losses | | 174,269 |
| | 46,285 |
| | 35,302 |
| | 27,547 |
| | 20,415 |
|
| Non-interest income | | 10,540 |
| | 1,139 |
| | 2,203 |
| | 643 |
| | 2,564 |
|
| Non-interest expense | | (88,645 | ) | | (18,316 | ) | | (16,199 | ) | | (12,242 | ) | | (12,919 | ) |
| Income (loss) before income taxes | | 96,164 |
| | 29,108 |
| | 21,306 |
| | 15,948 |
| | 10,060 |
|
| Income tax expense (benefit) | | 26,364 |
| | 11,419 |
| | 7,457 |
| | 6,707 |
| | 4,230 |
|
| Net income (loss) | | $ | 69,800 |
| | $ | 17,689 |
| | $ | 13,849 |
| | $ | 9,241 |
| | $ | 5,830 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Operating Segment Results | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Balance Sheet: | | National Business Lines | |
| | | HOA
Services | | Public & Nonprofit Finance | | Technology & Innovation | | Hotel Franchise Finance | | Other NBLs | | Corporate & Other |
| At December 31, 2016 | | (dollars in millions) |
| Assets: | | | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 3,036.3 |
|
| Loans, net of deferred loan fees and costs | | 116.8 |
| | 1,454.3 |
| | 1,011.4 |
| | 1,292.1 |
| | 1,776.9 |
| | 13.4 |
|
| Less: allowance for credit losses | | (1.3 | ) | | (15.6 | ) | | (10.6 | ) | | (0.8 | ) | | (19.0 | ) | | (0.6 | ) |
| Total loans | | 115.5 |
| | 1,438.7 |
| | 1,000.8 |
| | 1,291.3 |
| | 1,757.9 |
| | 12.8 |
|
| Other assets acquired through foreclosure, net | | — |
| | — |
| | — |
| | — |
| | — |
| | 23.3 |
|
| Goodwill and other intangible assets, net | | — |
| | — |
| | 121.5 |
| | 0.2 |
| | — |
| | — |
|
| Other assets | | 0.3 |
| | 15.6 |
| | 7.2 |
| | 5.3 |
| | 11.1 |
| | 544.0 |
|
| Total assets | | $ | 115.8 |
| | $ | 1,454.3 |
| | $ | 1,129.5 |
| | $ | 1,296.8 |
| | $ | 1,769.0 |
| | $ | 3,616.4 |
|
| Liabilities: | | | | | | | | | | | | |
| Deposits | | $ | 1,890.3 |
| | $ | — |
| | $ | 1,038.2 |
| | $ | — |
| | $ | — |
| | $ | 120.2 |
|
| Borrowings and qualifying debt | | — |
| | — |
| | — |
| | — |
| | — |
| | 447.9 |
|
| Other liabilities | | 0.7 |
| | 50.5 |
| | 2.0 |
| | 1.4 |
| | 17.5 |
| | 173.1 |
|
| Total liabilities | | 1,891.0 |
| | 50.5 |
| | 1,040.2 |
| | 1.4 |
| | 17.5 |
| | 741.2 |
|
| Allocated equity: | | 65.6 |
| | 117.1 |
| | 224.1 |
| | 107.1 |
| | 145.5 |
| | 149.5 |
|
| Total liabilities and stockholders' equity | | $ | 1,956.6 |
| | $ | 167.6 |
| | $ | 1,264.3 |
| | $ | 108.5 |
| | $ | 163.0 |
| | $ | 890.7 |
|
| Excess funds provided (used) | | 1,840.8 |
| | (1,286.7 | ) | | 134.8 |
| | (1,188.3 | ) | | (1,606.0 | ) | | (2,725.7 | ) |
| | | | | | | | | | | | | |
| No. of offices | | 1 |
| | 1 |
| | 8 |
| | 1 |
| | 4 |
| | (7 | ) |
| No. of full-time equivalent employees | | 64 |
| | 6 |
| | 57 |
| | 20 |
| | 34 |
| | 641 |
|
| | | | | | | | | | | | | |
| Income Statement: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended March 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 8,632 |
| | $ | 5,221 |
| | $ | 16,309 |
| | $ | — |
| | $ | 10,637 |
| | $ | (13,742 | ) |
| Provision for (recovery of) credit losses | | 78 |
| | (369 | ) | | (1,165 | ) | | — |
| | 238 |
| | (3,314 | ) |
| Net interest income (expense) after provision for credit losses | | 8,554 |
| | 5,590 |
| | 17,474 |
| | — |
| | 10,399 |
| | (10,428 | ) |
| Non-interest income | | 105 |
| | (4 | ) | | 1,637 |
| | — |
| | 635 |
| | 1,934 |
|
| Non-interest expense | | (5,541 | ) | | (2,024 | ) | | (6,906 | ) | | — |
| | (3,437 | ) | | (3,182 | ) |
| Income (loss) before income taxes | | 3,118 |
| | 3,562 |
| | 12,205 |
| | — |
| | 7,597 |
| | (11,676 | ) |
| Income tax expense (benefit) | | 1,169 |
| | 1,336 |
| | 4,577 |
| | — |
| | 2,849 |
| | (16,135 | ) |
| Net income (loss) | | $ | 1,949 |
| | $ | 2,226 |
| | $ | 7,628 |
| | $ | — |
| | $ | 4,748 |
| | $ | 4,459 |
|
| | | | | | | | | | | | | |
| Three Months Ended December 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 11,686 |
| | $ | 5,641 |
| | $ | 18,060 |
| | $ | 13,145 |
| | $ | 14,673 |
| | $ | (16,462 | ) |
| Provision for (recovery of) credit losses | | 96 |
| | 326 |
| | 710 |
| | — |
| | 891 |
| | — |
|
| Net interest income (expense) after provision for credit losses | | 11,590 |
| | 5,315 |
| | 17,350 |
| | 13,145 |
| | 13,782 |
| | (16,462 | ) |
| Non-interest income | | 119 |
| | 37 |
| | 2,105 |
| | — |
| | 717 |
| | 1,013 |
|
| Non-interest expense | | (6,596 | ) | | (2,010 | ) | | (8,094 | ) | | (2,780 | ) | | (4,197 | ) | | (5,292 | ) |
| Income (loss) before income taxes | | 5,113 |
| | 3,342 |
| | 11,361 |
| | 10,365 |
| | 10,302 |
| | (20,741 | ) |
| Income tax expense (benefit) | | 1,918 |
| | 1,253 |
| | 4,261 |
| | 3,887 |
| | 3,864 |
| | (18,632 | ) |
| Net income (loss) | | $ | 3,195 |
| | $ | 2,089 |
| | $ | 7,100 |
| | $ | 6,478 |
| | $ | 6,438 |
| | $ | (2,109 | ) |
| | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Reconciliation of Non-GAAP Financial Measures | | | | | | | | | |
| Unaudited | | | | | | | | | |
| | | | | | | | | | |
| Operating Pre-Provision Net Revenue by Quarter: | | | | | | | | |
| | Three Months Ended |
| | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | (in thousands) |
| Total non-interest income | $ | 10,544 |
| | $ | 10,540 |
| | $ | 10,683 |
| | $ | 8,559 |
| | $ | 13,133 |
|
| Less: | | | | | | | | | |
| Gains (losses) on sales of investment securities, net | 635 |
| | 58 |
| | — |
| | — |
| | 1,001 |
|
| Unrealized gains (losses) on assets and liabilities measured at fair value, net | — |
| | — |
| | 7 |
| | 6 |
| | (5 | ) |
| Total operating non-interest income | 9,909 |
| | 10,482 |
| | 10,676 |
| | 8,553 |
| | 12,137 |
|
| Plus: net interest income | 179,309 |
| | 175,269 |
| | 172,547 |
| | 163,686 |
| | 145,711 |
|
| Net operating revenue (1) | $ | 189,218 |
| | $ | 185,751 |
| | $ | 183,223 |
| | $ | 172,239 |
| | $ | 157,848 |
|
| | | | | | | | | | |
| Total non-interest expense | $ | 87,757 |
| | $ | 88,645 |
| | $ | 85,007 |
| | $ | 81,804 |
| | $ | 75,493 |
|
| Less: | | | | | | | | | |
| Net (gain) loss on sales and valuations of repossessed and other assets | (543 | ) | | (34 | ) | | (146 | ) | | 357 |
| | (302 | ) |
| Acquisition / restructure expense | — |
| | 6,021 |
| | 2,729 |
| | 3,662 |
| | — |
|
| Total operating non-interest expense (1) | $ | 88,300 |
| | $ | 82,658 |
| | $ | 82,424 |
| | $ | 77,785 |
| | $ | 75,795 |
|
| | | | | | | | | | |
| Operating pre-provision net revenue (2) | $ | 100,918 |
| | $ | 103,093 |
| | $ | 100,799 |
| | $ | 94,454 |
| | $ | 82,053 |
|
| | | | | | | | | | |
| Plus: | | | | | | | | | |
| Non-operating revenue adjustments | 635 |
| | 58 |
| | 7 |
| | 6 |
| | 996 |
|
| Less: | | | | | | | | | |
| Provision for credit losses | 4,250 |
| | 1,000 |
| | 2,000 |
| | 2,500 |
| | 2,500 |
|
| Non-operating expense adjustments | (543 | ) | | 5,987 |
| | 2,583 |
| | 4,019 |
| | (302 | ) |
| Income tax expense | 24,489 |
| | 26,364 |
| | 29,171 |
| | 26,327 |
| | 19,519 |
|
| Net income | $ | 73,357 |
| | $ | 69,800 |
| | $ | 67,052 |
| | $ | 61,614 |
| | $ | 61,332 |
|
|
| | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
|
| | | | | | | | | | | | | | | | | | | |
| Tangible Common Equity: | | | | | | | | | |
| | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | (dollars and shares in thousands) |
| Total stockholders' equity | $ | 1,968,992 |
| | $ | 1,891,529 |
| | $ | 1,857,354 |
| | $ | 1,796,210 |
| | $ | 1,660,163 |
|
| Less: goodwill and intangible assets | 302,133 |
| | 302,894 |
| | 303,592 |
| | 304,289 |
| | 303,962 |
|
| Total tangible common equity | 1,666,859 |
| | 1,588,635 |
| | 1,553,762 |
| | 1,491,921 |
| | 1,356,201 |
|
| Plus: deferred tax - attributed to intangible assets | 4,759 |
| | 4,949 |
| | 5,304 |
| | 5,594 |
| | 5,828 |
|
| Total tangible common equity, net of tax | $ | 1,671,618 |
| | $ | 1,593,584 |
| | $ | 1,559,066 |
| | $ | 1,497,515 |
| | $ | 1,362,029 |
|
| Total assets | $ | 18,122,506 |
| | $ | 17,200,842 |
| | $ | 17,042,602 |
| | $ | 16,728,767 |
| | $ | 15,248,039 |
|
| Less: goodwill and intangible assets, net | 302,133 |
| | 302,894 |
| | 303,592 |
| | 304,289 |
| | 303,962 |
|
| Tangible assets | 17,820,373 |
| | 16,897,948 |
| | 16,739,010 |
| | 16,424,478 |
| | 14,944,077 |
|
| Plus: deferred tax - attributed to intangible assets | 4,759 |
| | 4,949 |
| | 5,304 |
| | 5,594 |
| | 5,828 |
|
| Total tangible assets, net of tax | $ | 17,825,132 |
| | $ | 16,902,897 |
| | $ | 16,744,314 |
| | $ | 16,430,072 |
| | $ | 14,949,905 |
|
| Tangible common equity ratio (3) | 9.4 | % | | 9.4 | % | | 9.3 | % | | 9.1 | % | | 9.1 | % |
| Common shares outstanding | 105,428 |
| | 105,071 |
| | 105,071 |
| | 105,084 |
| | 103,513 |
|
| Tangible book value per share, net of tax (4) | $ | 15.86 |
| | $ | 15.17 |
| | $ | 14.84 |
| | $ | 14.25 |
| | $ | 13.16 |
|
|
| | | | | | | | | | | | | | | | | | | |
| Operating Efficiency Ratio by Quarter: | | | | | | | | | |
| | Three Months Ended |
| | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | (in thousands) |
| Total operating non-interest expense | $ | 88,300 |
| | $ | 82,658 |
| | $ | 82,424 |
| | $ | 77,785 |
| | $ | 75,795 |
|
| Divided by: | | | | | | | | | |
| Total net interest income | 179,309 |
| | 175,269 |
| | 172,547 |
| | 163,686 |
| | 145,711 |
|
| Plus: | | | | | | | | | |
| Tax equivalent interest adjustment | 9,676 |
| | 9,165 |
| | 8,599 |
| | 8,704 |
| | 8,435 |
|
| Operating non-interest income | 9,909 |
| | 10,482 |
| | 10,676 |
| | 8,553 |
| | 12,137 |
|
| | $ | 198,894 |
| | $ | 194,916 |
| | $ | 191,822 |
| | $ | 180,943 |
| | $ | 166,283 |
|
| Operating efficiency ratio - tax equivalent basis (5) | 44.4 | % | | 42.4 | % | | 43.0 | % | | 43.0 | % | | 45.6 | % |
|
| | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
|
| | | | | | | | | | | | | | | | | | | |
| Allowance for Credit Losses, Adjusted for Acquisition Accounting: | | | | | | |
| | | | | | | | | | |
| | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | (in thousands) |
| Allowance for credit losses | $ | 127,649 |
| | $ | 124,704 |
| | $ | 122,884 |
| | $ | 122,104 |
| | $ | 119,227 |
|
| Plus: remaining credit marks | | | | | | | | | |
| Acquired performing loans | 32,781 |
| | 34,392 |
| | 41,020 |
| | 45,225 |
| | 9,646 |
|
| Purchased credit impaired loans | 12,335 |
| | 12,872 |
| | 15,093 |
| | 16,438 |
| | 6,760 |
|
| Adjusted allowance for credit losses | $ | 172,765 |
| | $ | 171,968 |
| | $ | 178,997 |
| | $ | 183,767 |
| | $ | 135,633 |
|
| | | | | | | | | | |
| Gross loans held for investment and deferred fees, net | $ | 13,644,883 |
| | $ | 13,189,527 |
| | $ | 13,012,262 |
| | $ | 12,855,511 |
| | $ | 11,217,860 |
|
| Plus: remaining credit marks | | | | | | | | | |
| Acquired performing loans | 32,781 |
| | 34,392 |
| | 41,020 |
| | 45,225 |
| | 9,646 |
|
| Purchased credit impaired loans | 12,335 |
| | 12,872 |
| | 15,093 |
| | 16,438 |
| | 6,760 |
|
| Adjusted loans, net of deferred fees and costs | $ | 13,689,999 |
| | $ | 13,236,791 |
| | $ | 13,068,375 |
| | $ | 12,917,174 |
| | $ | 11,234,266 |
|
| | | | | | | | | | |
| Allowance for credit losses to gross loans | 0.94 | % | | 0.95 | % | | 0.94 | % | | 0.95 | % | | 1.06 | % |
| Allowance for credit losses to gross loans, adjusted for acquisition accounting (6) | 1.26 |
| | 1.30 |
| | 1.37 |
| | 1.42 |
| | 1.21 |
|
|
| | | | | | | | | | | | | | | | | | | |
| Net Interest Margin, Adjusted for Acquisition Accounting: | | | | | | | | |
| | | | | | | | | | |
| | Mar 31, 2017 | | Dec 31, 2016 | | Sep 30, 2016 | | Jun 30, 2016 | | Mar 31, 2016 |
| | (in thousands) |
| Average interest earning assets | $ | 16,318,000 |
| | $ | 16,149,700 |
| | $ | 15,931,600 |
| | $ | 14,902,300 |
| | $ | 13,465,500 |
|
| Taxable-equivalent adjustment | 9,676 |
| | 9,165 |
| | 8,599 |
| | 8,703 |
| | 8,435 |
|
| | | | | | | | | | |
| Net interest income | $ | 179,309 |
| | $ | 175,269 |
| | $ | 172,547 |
| | $ | 163,686 |
| | $ | 145,711 |
|
| Less: accretion | | | | | | | | | |
| Acquired performing loans | 4,064 |
| | 4,911 |
| | 4,604 |
| | 4,122 |
| | 2,847 |
|
| Purchased credit impaired loans | 2,329 |
| | 2,075 |
| | 4,189 |
| | 4,048 |
| | 2,468 |
|
| Adjusted net interest income | $ | 172,916 |
| | $ | 168,283 |
| | $ | 163,754 |
| | $ | 155,516 |
| | $ | 140,396 |
|
| | | | | | | | | | |
| Net interest margin | 4.63 | % | | 4.57 | % | | 4.55 | % | | 4.63 | % | | 4.58 | % |
| Net interest margin, adjusted for accretion (7) | 4.48 |
| | 4.40 |
| | 4.33 |
| | 4.41 |
| | 4.42 |
|
|
|
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
Regulatory Capital:
|
| | | | | | | |
| | Mar 31, 2017 | | Dec 31, 2016 |
| | (in thousands) |
| Common Equity Tier 1: | | | |
| Common equity | $ | 1,968,992 |
| | $ | 1,891,529 |
|
| Less: | | | |
| Non-qualifying goodwill and intangibles | 295,878 |
| | 294,754 |
|
| Disallowed deferred tax asset | 2,011 |
| | 1,400 |
|
| AOCI related adjustments | (5,875 | ) | | (13,460 | ) |
| Unrealized gain on changes in fair value liabilities | 9,802 |
| | 8,118 |
|
| Common equity Tier 1 (regulatory) (8) (11) | $ | 1,667,176 |
| | $ | 1,600,717 |
|
| Divided by: estimated risk-weighted assets (regulatory) (9) (11) | $ | 16,565,677 |
| | $ | 15,980,092 |
|
| Common equity Tier 1 ratio (9) (11) | 10.1 | % | | 10.0 | % |
| | | | |
| Common equity Tier 1 (regulatory) (8) (11) | 1,667,176 |
| | 1,600,717 |
|
| Plus: | | | |
| Trust preferred securities | 81,500 |
| | 81,500 |
|
| Less: | | | |
| Disallowed deferred tax asset | 503 |
| | 934 |
|
| Unrealized gain on changes in fair value of liabilities | 2,450 |
| | 5,412 |
|
| Tier 1 capital (9) (11) | $ | 1,745,723 |
| | $ | 1,675,871 |
|
| Divided by: Tangible average assets | $ | 17,121,149 |
| | $ | 16,868,674 |
|
| Tier 1 leverage ratio | 10.2 | % | | 9.9 | % |
| | | | |
| Total Capital: | | | |
| Tier 1 capital (regulatory) (8) (11) | $ | 1,745,723 |
| | $ | 1,675,871 |
|
| Plus: | | | |
| Subordinated debt | 300,759 |
| | 299,927 |
|
| Qualifying allowance for credit losses | 127,649 |
| | 124,704 |
|
| Other | 6,367 |
| | 6,978 |
|
| Less: Tier 2 qualifying capital deductions | — |
| | — |
|
| Tier 2 capital | $ | 434,775 |
| | $ | 431,609 |
|
| | | | |
| Total capital | $ | 2,180,498 |
| | $ | 2,107,480 |
|
| | | | |
| Total capital ratio | 13.2 | % | | 13.2 | % |
| | | | |
| Classified assets to Tier 1 capital plus allowance: | | | |
| Classified assets | $ | 236,786 |
| | $ | 211,782 |
|
| Divided by: | | | |
| Tier 1 capital (9) (11) | 1,745,723 |
| | 1,675,871 |
|
| Plus: Allowance for credit losses | 127,649 |
| | 124,704 |
|
| Total Tier 1 capital plus allowance for credit losses | $ | 1,873,372 |
| | $ | 1,800,575 |
|
| | | | |
| Classified assets to Tier 1 capital plus allowance (10) (11) | 12.6 | % | | 11.8 | % |
|
| | | | | | | | |
| (1) | We believe these non-GAAP measurements provide a useful indication of the cash generating capacity of the Company. |
| (2) | We believe this non-GAAP measurement is a key indicator of the earnings power of the Company. |
| (3) | We believe this non-GAAP ratio provides an important metric with which to analyze and evaluate financial condition and capital strength. |
| (4) | We believe this non-GAAP measurement improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. |
| (5) | We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company. |
| (6) | We believe this non-GAAP ratio is a useful metric in understanding the Company's total allowance for credit losses, adjusted for acquisition accounting, because under GAAP, a company's allowance for credit losses is not carried over in an acquisition, but rather these loans are shown as being purchased at a discount that factors in expected future credit losses. |
| (7) | We believe this non-GAAP ratio is a useful metric in understanding the Company's net interest margin, adjusted for acquisition accounting, because under GAAP, interest rate and credit marks on acquired loans are accreted and recognized as part of interest income. By excluding the accretion on acquired loans, management believes this is more indicative of the yield from the Company's loan portfolio and improves comparability to other institutions that have not engaged in acquisitions that resulted in recognition of interest rate and credit marks on acquired loans. |
| (8) | Under the current guidelines of the Federal Reserve and the Federal Deposit Insurance Corporation, common equity Tier 1 capital consists of common stock, retained earnings, and minority interests in certain subsidiaries, less most other intangible assets. |
| (9) | Common equity Tier 1 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 the risk categories defined under new capital guidelines. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each category are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the common equity Tier 1 ratio. Common equity Tier 1 is divided by the risk-weighted assets to determine the common equity Tier 1 ratio. We believe this non-GAAP ratio provides an important metric with which to analyze and evaluate financial condition and capital strength. |
| (10) | We believe this non-GAAP ratio provides an important regulatory metric to analyze asset quality. |
| (11) | Current quarter is preliminary until Call Report is filed. |
CONTACT:
Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
