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| Western Alliance Bancorporation | | |
| One East Washington Street | |
| Phoenix, AZ 85004 | |
| www.westernalliancebancorporation.com | |
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PHOENIX--(BUSINESS WIRE)--January 25, 2018
FOURTH QUARTER AND FULL YEAR 2017 FINANCIAL RESULTS |
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| Net income | | Earnings per share | | Net interest margin | | Efficiency ratio | | Book value per
common share |
| $89.3 million | | $0.85 | | 4.73% | | 40.47% | | $21.13 |
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| CEO COMMENTARY: |
Robert Sarver, Chairman and CEO commented, “The year 2017 ended as expected for Western Alliance with outstanding results for our shareholders. Our performance is underscored by strong organic loan and deposit growth, plus expanding revenue well over the rate of expense growth. Our core EPS2 grew 22% year over year from $2.54 to $3.10. Net income grew 25% from $259.8 million to $325.5 million. |
| For the past three years, we have posted organic annual growth of $1.5 billion to $3.0 billion in total assets. Total loans grew $1.89 billion to $15.09 billion for the year, up $572 million for the quarter. Total deposits grew $2.42 billion to $16.97 billion for the year, up $68 million for the quarter. Our hands-on approach led to strong metrics for asset quality – nonperforming assets to total assets for the year was 0.36% compared to 0.51% in 2016 and net loan losses for the year were 0.01% of total loans. |
| With the benefits of tax reform ahead, coupled with the energy and drive that our bankers bring to clients in our markets, we are well positioned to continue our strong operating performance." |
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| LINKED-QUARTER BASIS | FULL YEAR |
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| FINANCIAL HIGHLIGHTS: |
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| ▪ | Net income and earnings per share of $89.3 million and $0.85 compared to $82.8 million and $0.79, respectively |
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| ▪ | Net operating revenue of $223.3 million constituting growth of $11.6 million compared to an increase in operating non-interest expenses of $6.4 million1 |
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| ▪ | Operating pre-provision net revenue of $127.8 million up $5.2 million from $122.7 million1 |
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| ▪ | Income tax expense includes the effect of the Tax Cut and Jobs Act and related actions, which in aggregate resulted in essentially no change in income performance |
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| ▪ | Net income of $325.5 million and earnings per share of $3.10, compared to $259.8 million and $2.50, respectively |
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| ▪ | Net operating revenue of $827.7 million, constituting year-over-year growth of 18.4%, or $128.6 million, compared to an increase in operating non-interest expenses of 13.3%, or $42.3 million1 |
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| ▪ | Operating pre-provision net revenue of $466.6 million up $86.2 million from $380.4 million 1 |
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| ▪ | Income tax expense increased $24.9 million due to an increase in pre-tax income, while the effective tax rate was stable at 28% |
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| FINANCIAL POSITION RESULTS: |
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| ▪ | Total loans of $15.09 billion, up $572 million |
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| ▪ | Total deposits of $16.97 billion, up $68 million |
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| ▪ | Stockholders' equity of $2.23 billion, up $84 million |
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| ▪ | Increase in total loans of $1.89 billion |
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| ▪ | Increase in total deposits of $2.42 billion |
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| ▪ | Increase in stockholders' equity of $338 million |
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| ▪ | Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.36% compared to 0.42% |
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| ▪ | Annualized net loan charge-offs to average loans outstanding of 0.04%, compared to 0.01% |
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| ▪ | Nonperforming assets to total assets of 0.36%, compared to 0.51% |
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| ▪ | Net loan charge-offs to average loans outstanding of 0.01%, compared to 0.02% |
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| ▪ | Net interest margin of 4.73%, compared to 4.65% |
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| ▪ | Return on average assets and return on tangible common equity1 of 1.79% and 18.80%, compared to 1.71% and 18.18%, respectively |
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| ▪ | Tangible common equity ratio of 9.6%, compared to 9.4% 1 |
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| ▪ | Tangible book value per share, net of tax, of $18.31, an increase from $17.53 1 |
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| ▪ | Operating efficiency ratio of 40.7%, compared to 40.0% 1 |
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| ▪ | Net interest margin of 4.65%, compared to 4.58% |
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| ▪ | Return on average assets and return on tangible common equity1 of 1.72% and 18.32%, compared to 1.61% and 17.71%, respectively |
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| ▪ | Tangible common equity ratio of 9.6%, compared to 9.4% 1 |
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| ▪ | Tangible book value per share, net of tax, of $18.31 an increase of 20.7% from $15.17 1 |
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| ▪ | Operating efficiency ratio of 41.5%, compared to 43.4% 1 |
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1 | See reconciliation of Non-GAAP Financial Measures beginning on page 19. |
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2 | Non-GAAP Financial Measure, excludes acquisition / restructure expense, net of tax. |
Income Statement
Net interest income was $211.0 million in the fourth quarter 2017, an increase of $9.4 million from $201.6 million in the third quarter 2017, and an increase of $35.8 million or 20.4%, compared to the fourth quarter 2016. Net interest income in the fourth quarter 2017 includes $7.1 million of total accretion income from acquired loans, compared to $7.5 million in the third quarter 2017, and $7.0 million in the fourth quarter 2016. For 2017, net interest income was $784.7 million an increase of $127.5 million or 19.4%, from $657.2 million in 2016.
The Company’s net interest margin in the fourth quarter 2017 was 4.73%, an increase from 4.65% the third quarter 2017, and an increase from 4.57% in the fourth quarter 2016. The increase in net interest margin from the third quarter 2017 primarily relates to an increase in yield on most interest-earning asset categories. The increase in net interest margin from the fourth quarter 2016 primarily relates to the rise in short-term interest rates during the year. For 2017, net interest margin was 4.65%, compared to 4.58% in 2016. The increase in net interest margin from the prior year relates primarily to an increase in loan yield resulting from additional income from the Hotel Franchise Finance acquisition, partially offset by higher costs of deposits and qualifying debt.
Operating non-interest income was $12.3 million for the fourth quarter 2017, compared to $10.1 million for the third quarter 2017, and $10.4 million for the fourth quarter 2016.1 Operating non-interest income for the fourth quarter 2017 was elevated as a result of warrant income of $1.4 million and net gains on SBA loan sales of $1.2 million. For 2017, operating non-interest income was $43.0 million an increase of $1.2 million or 2.8%, compared to $41.8 million in 2016.1
Net operating revenue was $223.3 million for the fourth quarter 2017, an increase of $11.6 million, compared to $211.7 million for the third quarter 2017, and an increase of $37.6 million or 20.2%, compared to $185.7 million for the fourth quarter 2016.1 For 2017, net operating revenue was $827.7 million an increase of $128.6 million, or 18.4%, compared to $699.1 million in 2016.1
Operating non-interest expense was $95.4 million for the fourth quarter 2017, compared to $89.0 million for the third quarter 2017, and $82.7 million for the fourth quarter 2016.1 The Company’s operating efficiency ratio1 on a tax equivalent basis was 40.7% for the fourth quarter 2017, compared to 40.0% for the third quarter 2017, and 42.4% for the fourth quarter 2016. For 2017, operating non-interest expense was $361.0 million, an increase of $42.3 million or 13.3%, compared to $318.7 million in 2016.1 This increase was primarily driven by an increase in salaries and benefits, including incentive compensation, to accommodate growth and performance.
Income tax expense was $35.0 million for the fourth quarter 2017, compared to $34.9 million for the third quarter 2017, and $26.4 million for the fourth quarter 2016. Income tax expense for the fourth quarter 2017 is comparable to the prior quarter due to remeasurement of the Company's deferred tax assets and liabilities as a result of the Tax Cut and Jobs Act and related actions. This adjustment to the deferred tax asset is management's best estimate based upon the information available as of this earnings release and is subject to change as final tax related calculations are completed in conjunction with the filing of our Form 10-K and the one-year remeasurement period granted by the SEC.
Net income was $89.3 million for the fourth quarter 2017, an increase of $6.5 million from $82.8 million for the third quarter 2017, and an increase of $19.5 million or 28.0%, from $69.8 million for the fourth quarter 2016. Earnings per share was $0.85 for the fourth quarter 2017, compared to $0.79 for the third quarter 2017, and $0.67 for the fourth quarter 2016. For 2017, net income was $325.5 million an increase of $65.7 million or 25.3%, compared to $259.8 million in 2016. Earnings per share for 2017 was $3.10 an increase of 23.9%, compared to $2.50 in 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 fourth quarter 2017, the Company’s operating PPNR was $127.8 million, up from $122.7 million in the third quarter 2017, and up 24.1% from $103.1 million in the fourth quarter 2016.1 The non-operating items1 for the fourth quarter 2017 consisted primarily of net gains on sales of investment securities of $1.4 million. For 2017, operating PPNR was $466.6 million an increase of $86.2 million or 22.7%, from $380.4 million in 2016.1
The Company had 1,725 full-time equivalent employees and 47 offices at December 31, 2017, compared to 1,673 employees and 47 offices at September 30, 2017, and 1,514 employees and 48 offices at December 31, 2016.
Balance Sheet
Gross loans totaled $15.09 billion at December 31, 2017, an increase of $572 million from $14.52 billion at September 30, 2017, and an increase of $1.89 billion from $13.21 billion at December 31, 2016. The year-over-year increase is due to organic loan growth. At December 31, 2017, the allowance for credit losses to gross loans held for investment was 0.93%, compared to 0.94% at September 30, 2017, and 0.95% at December 31, 2016. At December 31, 2017, the allowance for credit losses to total organic loans was 1.03%, compared to 1.06% at September 30, 2017, and 1.11% at December 31, 2016. The Company defines its organic loans as those loans that have not been acquired in a transaction accounted for as a business combination.
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. Credit discounts on acquired loans are included as a reduction to gross loans. These discounts totaled $27.0 million at December 31, 2017, compared to $32.7 million at September 30, 2017, and $47.3 million at December 31, 2016.
Deposits totaled $16.97 billion at December 31, 2017, an increase of $68 million from $16.90 billion at September 30, 2017, and an increase of $2.42 billion from $14.55 billion at December 31, 2016. The increase from both the prior quarter and from December 31, 2016 is the result of organic deposit growth. Non-interest bearing deposits were $7.43 billion at December 31, 2017, compared to $7.61 billion at September 30, 2017, and $5.63 billion at December 31, 2016. Non-interest bearing deposits comprised 43.8% of total deposits at December 31, 2017, compared to 45.0% at September 30, 2017, and 38.7% at December 31, 2016. The proportion of savings and money market balances to total deposits was 37.3%, compared to 37.3% at September 30, 2017, and 42.1% at December 31, 2016. Certificates of deposit as a percentage of total deposits were 9.6% at December 31, 2017, compared to 9.4% at September 30, 2017, and 10.0% at December 31, 2016. The Company’s ratio of loans to deposits was 88.9% at December 31, 2017, compared to 85.9% at September 30, 2017, and 90.8% at December 31, 2016.
Borrowings totaled $390 million at December 31, 2017, an increase from zero at September 30, 2017, and an increase of $310 million from $80 million at December 31, 2016. The increase in borrowings from both the prior quarter and the prior year is due to an increase in FHLB overnight advances.
Qualifying debt totaled $377 million at December 31, 2017, compared to $373 million at September 30, 2017, and $368 million at December 31, 2016.
Stockholders’ equity at December 31, 2017 was $2.23 billion, compared to $2.15 billion at September 30, 2017, and $1.89 billion at December 31, 2016.
At December 31, 2017, tangible common equity, net of tax, was 9.6% of tangible assets1 and total capital was 13.2% of risk-weighted assets. The Company’s tangible book value per share1 was $18.31 at December 31, 2017, up 20.7% from December 31, 2016.
Total assets increased 2.0% to $20.33 billion at December 31, 2017, from $19.92 billion at September 30, 2017, and increased 18.2% from $17.20 billion at December 31, 2016. The increase in total assets from the prior year relates primarily to organic loan growth and an increase in investment securities resulting from utilized cash from increased deposits.
Asset Quality
The provision for credit losses was $5.0 million for the fourth quarter 2017, consistent with $5.0 million for the third quarter 2017, and compared to $1.0 million for the fourth quarter 2016. Net loan charge-offs (recoveries) in the fourth quarter 2017 were $1.4 million or 0.04% of average loans (annualized), compared to $0.4 million, or 0.01%, in the third quarter 2017, and $(0.8) million, or (0.03)%, in the fourth quarter 2016.
Nonaccrual loans decreased $11.1 million to $43.9 million during the quarter and increased $3.7 million during the year. Loans past due 90 days and still accruing interest totaled $43 thousand at December 31, 2017, compared to $44 thousand at September 30, 2017, and $1.1 million at December 31, 2016. Loans past due 30-89 days and still accruing interest totaled $10.1 million at quarter end, an increase from $5.2 million at September 30, 2017, and an increase from $6.3 million at December 31, 2016.
Repossessed assets totaled $28.5 million at December 31, 2017, a decrease of $0.5 million from $29.0 million at September 30, 2017, and a decrease of $19.3 million from $47.8 million at December 31, 2016. Adversely graded loans and non-performing assets totaled $355.2 million at December 31, 2017, a decrease of $51.0 million from $406.2 million at September 30, 2017, and a decrease of $12.3 million from $342.9 million at December 31, 2016.
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, was 10.3% at December 31, 2017, compared to 10.8% at September 30, 2017, and 11.8% at December 31, 2016.1
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1 | See reconciliation of Non-GAAP Financial Measures beginning on page 19. |
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, Hotel Franchise Finance ("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 Capital 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 $8.38 billion at December 31, 2017, an increase of $428 million during the quarter, and an increase of $835 million during the year. Each of the regional segments had loan growth during the quarter, with Arizona and Nevada contributing the largest increases of $192 million and $159 million, respectively. The growth in loans during the year was primarily driven by an increase of $368 million in Arizona and $180 million in Northern California. Total deposits for the regional segments were $12.94 billion, a decrease of $261 million during the quarter, and an increase of $1.43 billion during the year. Arizona and Southern California had decreases in deposits during the quarter of $357 million and $51 million, respectively, which was partially offset by an increase of $146 million in Northern California. Each of the regional segments generated increased deposits during the year, with Arizona contributing the largest increase of $998 million, followed by Nevada and Northern California with increases of $220 million and $138 million, respectively.
Pre-tax income for the regional segments was $83.5 million for the three months ended December 31, 2017, a decrease of $2.6 million from the three months ended September 30, 2017, and an increase of $7.1 million from the three months ended December 31, 2016. Arizona and Nevada had the largest decreases in pre-tax income of $3.1 million and $2.7 million, respectively, compared to the three months ended September 30, 2017, which were partially offset by an increase of $3.7 million in Northern California. Arizona, Northern California, and Nevada had increases in pre-tax income from the three months ended December 31, 2016 of $3.1 million, $2.9 million, and $2.0 million, respectively, which were partially offset by a decrease of $0.9 million in Southern California. For the year ended December 31, 2017, the regional segments reported total pre-tax income of $327.0 million, an increase of $30.0 million compared to the year ended December 31, 2016. Arizona and Nevada contributed the largest increases of $22.0 million and $8.9 million, respectively, which were partially offset by decreases of $0.5 million and $0.4 million in Northern California and Southern California, respectively.
The NBL segments reported gross loan balances of $6.71 billion at December 31, 2017, an increase of $145 million during the quarter, and an increase of $1.06 billion during the year. The increase in loans for the NBL segments compared to the prior quarter relates primarily to the HFF, Technology & Innovation, and Other NBLs segments, which increased by $55 million, $49 million, and $30 million, respectively. During the year, the increases were driven by the Other NBLs, Public & Nonprofit Finance, and Technology & Innovation, which increased loans by $766 million, $126 million, and $87 million, respectively. Total deposits for the NBL segments were $3.97 billion, an increase of $355 million during the quarter, and an increase of $1.04 billion during the year. The Technology & Innovation and HOA Services segments increased deposits during the quarter by $278 million and $77 million, respectively. The increase of $1.04 billion during the year is the result of growth in the Technology & Innovation and HOA Services of $699 million and $340 million, respectively.
Pre-tax income for the NBL segments was $50.8 million for the three months ended December 31, 2017, an increase of $5.2 million from the three months ended September 30, 2017, and an increase of $10.3 million from the three months ended December 31, 2016. The increase in pre-tax income from the prior quarter relates primarily to the Other NBLs segment, which increased $6.6 million. This increase was offset by decreases in pre-tax income from the HFF and Public & Nonprofit Finance segments of $1.4 million and $0.3 million, respectively. All NBLs had increases in pre-tax income from the prior year, with the Other NBLs and Technology & Innovation segments contributing the largest increases of $3.9 million and $2.2 million, respectively. Pre-tax income for the NBLs for the year ended December 31, 2017 totaled $176.5 million, compared to $140.0 million for the year ended December 31, 2016. All NBL segments had increases in pre-tax income compared to the year ended December 31, 2016, with the largest increases in HFF and HOA Services of $12.3 million, and $8.3 million, respectively.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its fourth quarter 2017 financial results at 12:00 p.m. ET on Friday, January 26, 2018. Participants may access the call by dialing 1-888-317-6003 and using passcode 0958016 or via live audio webcast using the website link https://services.choruscall.com/links/wal180126.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 January 26th through 9:00 a.m. ET February 26th by dialing 1-877-344-7529 passcode: 10115798.
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.
Early Adoption of Accounting Standards
During the fourth quarter 2017, the Company elected to early adopt Accounting Standards Update ("ASU") 2017-12, Targeted Improvements to Accounting for Hedging Activities. The amendments in this ASU simplify the application of hedge accounting by changing how companies assess effectiveness of hedging instruments. The guidance also amends the presentation and disclosure requirements for hedging activities. Under the new accounting guidance, a qualitative hedge effectiveness assessment can be performed after the initial quantitative assessment. In addition, the timing of the completion of the initial quantitative hedge effectiveness assessment may be pushed out to the first quarterly reporting date subsequent to entering into the hedge.
Upon adoption of the new accounting guidance, the Company recorded a cumulative basis adjustment of $0.5 million for its fair value hedges as an adjustment to retained earnings as of January 1, 2017 and, the effects of hedging ineffectiveness previously recognized in each of the quarters of 2017 was reversed, which totaled less than $0.1 million for the year.
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 $20 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies. 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, Bridge Bank, First Independent Bank and Torrey Pines 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 | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Selected Balance Sheet Data: | | | | | | | | | | | | |
| | | As of December 31, | | | | | | |
| | | 2017 | | 2016 | | Change % | | | | | | |
| | | (in millions) | | | | | | | | |
| Total assets | | $ | 20,329.1 |
| | $ | 17,200.8 |
| | 18.2 | % | | | | | | |
| Total loans, net of deferred fees | | 15,093.9 |
| | 13,208.5 |
| | 14.3 |
| | | | | | |
| Securities and money market investments | | 3,820.4 |
| | 2,767.8 |
| | 38.0 |
| | | | | | |
| Total deposits | | 16,972.5 |
| | 14,549.8 |
| | 16.7 |
| | | | | | |
| Borrowings | | 390.0 |
| | 80.0 |
| | NM |
| | | | | | |
| Qualifying debt | | 376.9 |
| | 367.9 |
| | 2.4 |
| | | | | | |
| Stockholders' equity | | 2,229.2 |
| | 1,891.5 |
| | 17.8 |
| | | | | | |
| Tangible common equity, net of tax (1) | | 1,931.1 |
| | 1,593.6 |
| | 21.2 |
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| Selected Income Statement Data: | | | | | | | | | | | | |
| | | For the Three Months Ended December 31, | | For the Year Ended December 31, |
| | | 2017 | | 2016 | | Change % | | 2017 | | 2016 | | Change % |
| | | (in thousands, except per share data) | | | | (in thousands, except per share data) | | |
| Interest income | | $ | 228,459 |
| | $ | 187,411 |
| | 21.9 | % | | $ | 845,513 |
| | $ | 700,506 |
| | 20.7 | % |
| Interest expense | | 17,430 |
| | 12,142 |
| | 43.6 |
| | 60,849 |
| | 43,293 |
| | 40.6 |
|
| Net interest income | | 211,029 |
| | 175,269 |
| | 20.4 |
| | 784,664 |
| | 657,213 |
| | 19.4 |
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| Provision for credit losses | | 5,000 |
| | 1,000 |
| | NM |
| | 17,250 |
| | 8,000 |
| | NM |
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| Net interest income after provision for credit losses | | 206,029 |
| | 174,269 |
| | 18.2 |
| | 767,414 |
| | 649,213 |
| | 18.2 |
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| Non-interest income | | 13,688 |
| | 10,540 |
| | 29.9 |
| | 45,344 |
| | 42,915 |
| | 5.7 |
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| Non-interest expense | | 95,398 |
| | 88,645 |
| | 7.6 |
| | 360,941 |
| | 330,949 |
| | 9.1 |
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| Income before income taxes | | 124,319 |
| | 96,164 |
| | 29.3 |
| | 451,817 |
| | 361,179 |
| | 25.1 |
|
| Income tax expense | | 34,973 |
| | 26,364 |
| | 32.7 |
| | 126,325 |
| | 101,381 |
| | 24.6 |
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| Net income | | $ | 89,346 |
| | $ | 69,800 |
| | 28.0 |
| | $ | 325,492 |
| | $ | 259,798 |
| | 25.3 |
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| Diluted earnings per share | | $ | 0.85 |
| | $ | 0.67 |
| | 26.9 |
| | $ | 3.10 |
| | $ | 2.50 |
| | 24.0 |
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| | | | | | | | | | | | | |
|
| | | | | | | |
| (1) | See Reconciliation of Non-GAAP Financial Measures. |
| NM | Changes +/- 100% are not meaningful. |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Summary Consolidated Financial Data | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Common Share Data: | | | | | | | | | | | | |
| | | At or for the Three Months Ended December 31, | | For the Year Ended December 31, |
| | | 2017 | | 2016 | | Change % | | 2017 | | 2016 | | Change % |
| Diluted earnings per share | | $ | 0.85 |
| | $ | 0.67 |
| | 26.9 | % | | $ | 3.10 |
| | $ | 2.50 |
| | 24.0 | % |
| Book value per common share | | 21.13 |
| | 18.00 |
| | 17.4 |
| | | | | | |
| Tangible book value per share, net of tax (1) | | 18.31 |
| | 15.17 |
| | 20.7 |
| | | | | | |
Average shares outstanding
(in thousands): | | | | | | | | | | | | |
| Basic | | 104,342 |
| | 103,788 |
| | 0.5 |
| | 104,179 |
| | 103,042 |
| | 1.1 |
|
| Diluted | | 105,164 |
| | 104,765 |
| | 0.4 |
| | 104,997 |
| | 103,843 |
| | 1.1 |
|
| Common shares outstanding | | 105,487 |
| | 105,071 |
| | 0.4 |
| | | | | | |
|
| | | | | | | | | | | | | | | | | | |
| Selected Performance Ratios: | | | | | | | | | | | | |
| Return on average assets (2) | | 1.79 | % | | 1.63 | % | | 9.8 | % | | 1.72 | % | | 1.61 | % | | 6.8 | % |
| Return on average tangible common equity (1, 2) | | 18.80 |
| | 17.59 |
| | 6.9 |
| | 18.32 |
| | 17.71 |
| | 3.4 |
|
| Net interest margin (2) | | 4.73 |
| | 4.57 |
| | 3.5 |
| | 4.65 |
| | 4.58 |
| | 1.5 |
|
| Operating efficiency ratio - tax equivalent basis (1) | | 40.73 |
| | 42.42 |
| | (4.0 | ) | | 41.51 |
| | 43.42 |
| | (4.4 | ) |
| Loan to deposit ratio | | 88.93 |
| | 90.78 |
| | (2.0 | ) | | | | | | |
| | | | | | | | | | | | | |
| Asset Quality Ratios: | | | | | | | | | | | | |
| Net charge-offs (recoveries) to average loans outstanding (2) | | 0.04 | % | | (0.03 | )% | | NM |
| | 0.01 | % | | 0.02 | % | | (50.0 | )% |
| Nonaccrual loans to gross organic loans | | 0.29 |
| | 0.31 |
| | (6.5 | ) | | | | | | |
| Nonaccrual loans and repossessed assets to total assets | | 0.36 |
| | 0.51 |
| | (29.4 | ) | | | | | | |
| Loans past due 90 days and still accruing to gross loans | | 0.00 |
| | 0.01 |
| | (100.0 | ) | | | | | | |
| Allowance for credit losses to gross loans | | 0.93 |
| | 0.95 |
| | (2.1 | ) | | | | | | |
| Allowance for credit losses to nonaccrual loans | | 318.61 |
| | 309.65 |
| | 2.9 |
| | | | | | |
|
| | | | | | | | | |
| Capital Ratios (1): | | | | | | |
| | | December 31, 2017 | | September 30, 2017 | | December 31, 2016 |
| Tangible common equity (1) | | 9.6 | % | | 9.4 | % | | 9.4 | % |
| Common Equity Tier 1 (1), (3) | | 10.4 |
| | 10.4 |
| | 10.0 |
|
| Tier 1 Leverage ratio (1), (3) | | 10.3 |
| | 10.1 |
| | 9.9 |
|
| Tier 1 Capital (1), (3) | | 10.8 |
| | 10.8 |
| | 10.5 |
|
| Total Capital (1), (3) | | 13.2 |
| | 13.3 |
| | 13.2 |
|
|
| | | | | | | |
| (1) | See Reconciliation of Non-GAAP Financial Measures. |
| (2) | Annualized for the three month periods ended December 31, 2017 and 2016. |
| (3) | Capital ratios for December 31, 2017 are preliminary until the Call Report is filed. |
| NM | Changes +/- 100% are not meaningful. |
|
| | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Condensed Consolidated Income Statements | | | | | | | | |
| Unaudited | | | | | | | | |
| | | Three Months Ended December 31, | | For the Year Ended December 31, |
| | | 2017 | | 2016 | | 2017 | | 2016 |
| | | (dollars in thousands, except per share data) |
| Interest income: | | | | | | | | |
| Loans | | $ | 200,204 |
| | $ | 168,881 |
| | $ | 747,510 |
| | $ | 636,596 |
|
| Investment securities | | 26,312 |
| | 16,725 |
| | 88,639 |
| | 58,540 |
|
| Other | | 1,943 |
| | 1,805 |
| | 9,364 |
| | 5,370 |
|
| Total interest income | | 228,459 |
| | 187,411 |
| | 845,513 |
| | 700,506 |
|
| Interest expense: | | | | | | | | |
| Deposits | | 12,459 |
| | 7,729 |
| | 41,965 |
| | 29,722 |
|
| Qualifying debt | | 4,734 |
| | 4,252 |
| | 18,273 |
| | 12,998 |
|
| Borrowings | | 237 |
| | 161 |
| | 611 |
| | 573 |
|
| Total interest expense | | 17,430 |
| | 12,142 |
| | 60,849 |
| | 43,293 |
|
| Net interest income | | 211,029 |
| | 175,269 |
| | 784,664 |
| | 657,213 |
|
| Provision for credit losses | | 5,000 |
| | 1,000 |
| | 17,250 |
| | 8,000 |
|
| Net interest income after provision for credit losses | | 206,029 |
| | 174,269 |
| | 767,414 |
| | 649,213 |
|
| Non-interest income: | | | | | | | | |
| Service charges | | 5,157 |
| | 4,865 |
| | 20,346 |
| | 18,824 |
|
| Income from equity investments | | 1,519 |
| | 1,054 |
| | 4,496 |
| | 2,664 |
|
| Card income | | 1,796 |
| | 1,381 |
| | 6,313 |
| | 5,226 |
|
| Income from bank owned life insurance | | 965 |
| | 904 |
| | 3,861 |
| | 3,762 |
|
| Foreign currency income | | 906 |
| | 747 |
| | 3,536 |
| | 3,419 |
|
| Lending related income and gains (losses) on sale of loans, net | | 1,466 |
| | 488 |
| | 2,212 |
| | 5,295 |
|
| Gain (loss) on sales of investment securities, net | | 1,436 |
| | 58 |
| | 2,343 |
| | 1,059 |
|
| Other | | 443 |
| | 1,043 |
| | 2,237 |
| | 2,666 |
|
| Total non-interest income | | 13,688 |
| | 10,540 |
| | 45,344 |
| | 42,915 |
|
| Non-interest expenses: | | | | | | | | |
| Salaries and employee benefits | | 57,704 |
| | 49,702 |
| | 214,344 |
| | 188,810 |
|
| Legal, professional and directors' fees | | 6,490 |
| | 7,600 |
| | 29,814 |
| | 24,610 |
|
| Occupancy | | 6,532 |
| | 6,944 |
| | 27,860 |
| | 27,303 |
|
| Data processing | | 5,062 |
| | 4,504 |
| | 19,225 |
| | 18,660 |
|
| Insurance | | 3,687 |
| | 3,468 |
| | 14,042 |
| | 12,898 |
|
| Deposit costs | | 2,953 |
| | 1,862 |
| | 9,731 |
| | 4,983 |
|
| Marketing | | 1,176 |
| | 1,164 |
| | 3,804 |
| | 3,596 |
|
| Intangible amortization | | 408 |
| | 697 |
| | 2,074 |
| | 2,788 |
|
| Card expense | | 855 |
| | 689 |
| | 3,413 |
| | 2,936 |
|
| Loan and repossessed asset expenses | | 978 |
| | 477 |
| | 4,617 |
| | 2,999 |
|
| Net (gain) loss on sales and valuations of repossessed and other assets | | (34 | ) | | (34 | ) | | (80 | ) | | (125 | ) |
| Acquisition / restructure expense | | — |
| | 6,021 |
| | — |
| | 12,412 |
|
| Other | | 9,587 |
| | 5,551 |
| | 32,097 |
| | 29,079 |
|
| Total non-interest expense | | 95,398 |
| | 88,645 |
| | 360,941 |
| | 330,949 |
|
| Income before income taxes | | 124,319 |
| | 96,164 |
| | 451,817 |
| | 361,179 |
|
| Income tax expense | | 34,973 |
| | 26,364 |
| | 126,325 |
| | 101,381 |
|
| Net income | | $ | 89,346 |
| | $ | 69,800 |
| | $ | 325,492 |
| | $ | 259,798 |
|
| | | | | | | | | |
| Earnings per share: | | | | | | | | |
| Diluted shares | | 105,164 |
| | 104,765 |
| | 104,997 |
| | 103,843 |
|
| Diluted earnings per share | | $ | 0.85 |
| | $ | 0.67 |
| | $ | 3.10 |
| | $ | 2.50 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Five Quarter Condensed Consolidated Income Statements | | | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Three Months Ended |
| | | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | | (in thousands, except per share data) |
| Interest income: | | | | | | | | | | |
| Loans | | $ | 200,204 |
| | $ | 191,096 |
| | $ | 183,657 |
| | $ | 172,553 |
| | $ | 168,881 |
|
| Investment securities | | 26,312 |
| | 23,584 |
| | 20,629 |
| | 18,114 |
| | 16,725 |
|
| Other | | 1,943 |
| | 3,156 |
| | 2,667 |
| | 1,598 |
| | 1,805 |
|
| Total interest income | | 228,459 |
| | 217,836 |
| | 206,953 |
| | 192,265 |
| | 187,411 |
|
| Interest expense: | | | | | | | | | | |
| Deposits | | 12,459 |
| | 11,449 |
| | 9,645 |
| | 8,412 |
| | 7,729 |
|
| Qualifying debt | | 4,734 |
| | 4,708 |
| | 4,493 |
| | 4,338 |
| | 4,252 |
|
| Borrowings | | 237 |
| | 96 |
| | 72 |
| | 206 |
| | 161 |
|
| Total interest expense | | 17,430 |
| | 16,253 |
| | 14,210 |
| | 12,956 |
| | 12,142 |
|
| Net interest income | | 211,029 |
| | 201,583 |
| | 192,743 |
| | 179,309 |
| | 175,269 |
|
| Provision for credit losses | | 5,000 |
| | 5,000 |
| | 3,000 |
| | 4,250 |
| | 1,000 |
|
| Net interest income after provision for credit losses | | 206,029 |
| | 196,583 |
| | 189,743 |
| | 175,059 |
| | 174,269 |
|
| Non-interest income: | | | | | | | | | | |
| Service charges and fees | | 5,157 |
| | 5,248 |
| | 5,203 |
| | 4,738 |
| | 4,865 |
|
| Income from equity investments | | 1,519 |
| | 967 |
| | 1,318 |
| | 692 |
| | 1,054 |
|
| Card income | | 1,796 |
| | 1,509 |
| | 1,516 |
| | 1,492 |
| | 1,381 |
|
| Income from bank owned life insurance | | 965 |
| | 975 |
| | 973 |
| | 948 |
| | 904 |
|
| Foreign currency income | | 906 |
| | 756 |
| | 832 |
| | 1,042 |
| | 747 |
|
| Lending related income and gains (losses) on sale of loans, net | | 1,466 |
| | 97 |
| | 227 |
| | 422 |
| | 488 |
|
| Gains (losses) on sales of investment securities, net | | 1,436 |
| | 319 |
| | (47 | ) | | 635 |
| | 58 |
|
| Other | | 443 |
| | 585 |
| | 579 |
| | 630 |
| | 1,043 |
|
| Total non-interest income | | 13,688 |
| | 10,456 |
| | 10,601 |
| | 10,599 |
| | 10,540 |
|
| Non-interest expenses: | | | | | | | | | | |
| Salaries and employee benefits | | 57,704 |
| | 52,747 |
| | 52,273 |
| | 51,620 |
| | 49,702 |
|
| Legal, professional, and directors' fees | | 6,490 |
| | 6,038 |
| | 8,483 |
| | 8,803 |
| | 7,600 |
|
| Occupancy | | 6,532 |
| | 7,507 |
| | 6,927 |
| | 6,894 |
| | 6,944 |
|
| Data processing | | 5,062 |
| | 4,524 |
| | 4,375 |
| | 5,264 |
| | 4,504 |
|
| Insurance | | 3,687 |
| | 3,538 |
| | 3,589 |
| | 3,228 |
| | 3,468 |
|
| Deposit costs | | 2,953 |
| | 2,904 |
| | 2,133 |
| | 1,741 |
| | 1,862 |
|
| Marketing | | 1,176 |
| | 776 |
| | 1,131 |
| | 721 |
| | 1,164 |
|
| Intangible amortization | | 408 |
| | 489 |
| | 488 |
| | 689 |
| | 697 |
|
| Card expense | | 855 |
| | 966 |
| | 861 |
| | 731 |
| | 689 |
|
| Loan and repossessed asset expenses | | 978 |
| | 1,263 |
| | 1,098 |
| | 1,278 |
| | 477 |
|
| Net (gain) loss on sales and valuations of repossessed and other assets | | (34 | ) | | 266 |
| | 231 |
| | (543 | ) | | (34 | ) |
| Acquisition / restructure expense | | — |
| | — |
| | — |
| | — |
| | 6,021 |
|
| Other | | 9,587 |
| | 8,278 |
| | 6,831 |
| | 7,401 |
| | 5,551 |
|
| Total non-interest expense | | 95,398 |
| | 89,296 |
| | 88,420 |
| | 87,827 |
| | 88,645 |
|
| Income before income taxes | | 124,319 |
| | 117,743 |
| | 111,924 |
| | 97,831 |
| | 96,164 |
|
| Income tax expense | | 34,973 |
| | 34,899 |
| | 31,964 |
| | 24,489 |
| | 26,364 |
|
| Net income | | $ | 89,346 |
| | $ | 82,844 |
| | $ | 79,960 |
| | $ | 73,342 |
| | $ | 69,800 |
|
| | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | |
| Diluted shares | | 105,164 |
| | 104,942 |
| | 105,045 |
| | 104,836 |
| | 104,765 |
|
| Diluted earnings per share | | $ | 0.85 |
| | $ | 0.79 |
| | $ | 0.76 |
| | $ | 0.70 |
| | $ | 0.67 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Five Quarter Condensed Consolidated Balance Sheets | | | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | | (in millions, except per share data) |
| Assets: | | | | | | | | | | |
| Cash and due from banks | | $ | 416.8 |
| | $ | 650.4 |
| | $ | 606.7 |
| | $ | 647.0 |
| | $ | 284.5 |
|
| Securities and money market investments | | 3,820.4 |
| | 3,773.6 |
| | 3,283.0 |
| | 2,869.1 |
| | 2,767.8 |
|
| Loans held for sale | | — |
| | 16.3 |
| | 16.7 |
| | 17.8 |
| | 18.9 |
|
| Loans held for investment: | | | | | | | | | | |
| Commercial | | 6,841.4 |
| | 6,735.9 |
| | 6,318.5 |
| | 6,039.1 |
| | 5,855.8 |
|
| Commercial real estate - non-owner occupied | | 3,904.0 |
| | 3,628.4 |
| | 3,649.1 |
| | 3,607.8 |
| | 3,544.0 |
|
| Commercial real estate - owner occupied | | 2,241.6 |
| | 2,047.5 |
| | 2,021.2 |
| | 2,043.4 |
| | 2,013.3 |
|
| Construction and land development | | 1,632.2 |
| | 1,666.4 |
| | 1,601.7 |
| | 1,601.7 |
| | 1,478.1 |
|
| Residential real estate | | 425.9 |
| | 376.7 |
| | 334.8 |
| | 309.9 |
| | 259.4 |
|
| Consumer | | 48.8 |
| | 50.7 |
| | 47.9 |
| | 43.0 |
| | 39.0 |
|
| Gross loans and deferred fees, net | | 15,093.9 |
| | 14,505.6 |
|
| 13,973.2 |
| | 13,644.9 |
| | 13,189.6 |
|
| Allowance for credit losses | | (140.0 | ) | | (136.4 | ) | | (131.8 | ) | | (127.6 | ) | | (124.7 | ) |
| Loans, net | | 14,953.9 |
| | 14,369.2 |
| | 13,841.4 |
| | 13,517.3 |
| | 13,064.9 |
|
| Premises and equipment, net | | 118.7 |
| | 120.1 |
| | 120.5 |
| | 120.0 |
| | 119.8 |
|
| Other assets acquired through foreclosure, net | | 28.5 |
| | 29.0 |
| | 31.0 |
| | 45.2 |
| | 47.8 |
|
| Bank owned life insurance | | 167.8 |
| | 166.8 |
| | 166.4 |
| | 165.5 |
| | 164.5 |
|
| Goodwill and other intangibles, net | | 300.7 |
| | 301.2 |
| | 301.6 |
| | 302.1 |
| | 302.9 |
|
| Other assets | | 522.3 |
| | 495.6 |
| | 477.4 |
| | 438.5 |
| | 429.7 |
|
| Total assets | | $ | 20,329.1 |
| | $ | 19,922.2 |
| | $ | 18,844.7 |
| | $ | 18,122.5 |
| | $ | 17,200.8 |
|
| Liabilities and Stockholders' Equity: | | | | | | | | | | |
| Liabilities: | | | | | | | | | | |
| Deposits | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 7,434.0 |
| | $ | 7,608.7 |
| | $ | 6,859.4 |
| | $ | 6,114.1 |
| | $ | 5,632.9 |
|
| Interest bearing: | | | | | | | | | | |
| Demand | | 1,586.2 |
| | 1,406.4 |
| | 1,480.8 |
| | 1,449.3 |
| | 1,346.7 |
|
| Savings and money market | | 6,330.9 |
| | 6,300.2 |
| | 6,104.0 |
| | 6,253.8 |
| | 6,120.9 |
|
| Time certificates | | 1,621.4 |
| | 1,589.5 |
| | 1,586.9 |
| | 1,538.8 |
| | 1,449.3 |
|
| Total deposits | | 16,972.5 |
| | 16,904.8 |
| | 16,031.1 |
| | 15,356.0 |
| | 14,549.8 |
|
| Customer repurchase agreements | | 26.0 |
| | 26.1 |
| | 32.7 |
| | 35.7 |
| | 41.7 |
|
| Total customer funds | | 16,998.5 |
| | 16,930.9 |
| | 16,063.8 |
| | 15,391.7 |
| | 14,591.5 |
|
| Borrowings | | 390.0 |
| | — |
| | — |
| | — |
| | 80.0 |
|
| Qualifying debt | | 376.9 |
| | 372.9 |
| | 375.4 |
| | 366.9 |
| | 367.9 |
|
| Accrued interest payable and other liabilities | | 334.5 |
| | 472.8 |
| | 346.8 |
| | 394.9 |
| | 269.9 |
|
| Total liabilities | | 18,099.9 |
| | 17,776.6 |
| | 16,786.0 |
| | 16,153.5 |
| | 15,309.3 |
|
| Stockholders' Equity: | | | | | | | | | | |
| Common stock and additional paid-in capital | | 1,384.4 |
| | 1,378.8 |
| | 1,376.4 |
| | 1,370.3 |
| | 1,373.8 |
|
| Retained earnings | | 847.9 |
| | 758.6 |
| | 675.8 |
| | 595.8 |
| | 522.4 |
|
| Accumulated other comprehensive (loss) income | | (3.1 | ) | | 8.2 |
| | 6.5 |
| | 2.9 |
| | (4.7 | ) |
| Total stockholders' equity | | 2,229.2 |
| | 2,145.6 |
| | 2,058.7 |
| | 1,969.0 |
| | 1,891.5 |
|
| Total liabilities and stockholders' equity | | $ | 20,329.1 |
| | $ | 19,922.2 |
| | $ | 18,844.7 |
| | $ | 18,122.5 |
| | $ | 17,200.8 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Changes in the Allowance For Credit Losses | | | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | Three Months Ended |
| | | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | | (in thousands) |
| Balance, beginning of period | | $ | 136,421 |
| | $ | 131,811 |
| | $ | 127,649 |
| | $ | 124,704 |
| | $ | 122,884 |
|
| Provision for credit losses | | 5,000 |
| | 5,000 |
| | 3,000 |
| | 4,250 |
| | 1,000 |
|
| Recoveries of loans previously charged-off: | | | | | | | | | | |
| Commercial and industrial | | 406 |
| | 619 |
| | 1,759 |
| | 328 |
| | 1,144 |
|
| Commercial real estate - non-owner occupied | | 58 |
| | 1,168 |
| | 360 |
| | 355 |
| | 691 |
|
| Commercial real estate - owner occupied | | 119 |
| | 613 |
| | 46 |
| | 178 |
| | 45 |
|
| Construction and land development | | 218 |
| | 226 |
| | 508 |
| | 277 |
| | 30 |
|
| Residential real estate | | 120 |
| | 108 |
| | 1,299 |
| | 251 |
| | 287 |
|
| Consumer | | 3 |
| | 33 |
| | — |
| | 49 |
| | 11 |
|
| Total recoveries | | 924 |
| | 2,767 |
| | 3,972 |
| | 1,438 |
| | 2,208 |
|
| Loans charged-off: | | | | | | | | | | |
| Commercial and industrial | | 2,019 |
| | 2,921 |
| | 651 |
| | 2,595 |
| | 1,267 |
|
| Commercial real estate - non-owner occupied | | 275 |
| | 175 |
| | 1,808 |
| | — |
| | 1 |
|
| Commercial real estate - owner occupied | | — |
| | — |
| | 11 |
| | — |
| | 1 |
|
| Construction and land development | | — |
| | — |
| | — |
| | — |
| | 18 |
|
| Residential real estate | | — |
| | — |
| | 332 |
| | 115 |
| | 60 |
|
| Consumer | | 1 |
| | 61 |
| | 8 |
| | 33 |
| | 41 |
|
| Total loans charged-off | | 2,295 |
| | 3,157 |
| | 2,810 |
| | 2,743 |
| | 1,388 |
|
| Net loan charge-offs (recoveries) | | 1,371 |
| | 390 |
| | (1,162 | ) | | 1,305 |
| | (820 | ) |
| Balance, end of period | | $ | 140,050 |
| | $ | 136,421 |
| | $ | 131,811 |
| | $ | 127,649 |
| | $ | 124,704 |
|
| | | | | | | | | | | |
| Net charge-offs (recoveries) to average loans- annualized | | 0.04 | % | | 0.01 | % | | (0.03 | )% | | 0.04 | % | | (0.03 | )% |
| | | | | | | | | | | |
| Allowance for credit losses to gross loans | | 0.93 | % | | 0.94 | % | | 0.94 | % | | 0.94 | % | | 0.95 | % |
| Allowance for credit losses to gross organic loans | | 1.03 |
| | 1.06 |
| | 1.08 |
| | 1.08 |
| | 1.11 |
|
| Allowance for credit losses to nonaccrual loans | | 318.84 |
| | 248.07 |
| | 438.33 |
| | 370.45 |
| | 309.65 |
|
| | | | | | | | | | | |
| Nonaccrual loans | | $ | 43,925 |
| | $ | 54,994 |
| | $ | 30,071 |
| | $ | 34,458 |
| | $ | 40,272 |
|
| Nonaccrual loans to gross loans | | 0.29 | % | | 0.38 | % | | 0.22 | % | | 0.25 | % | | 0.31 | % |
| Repossessed assets | | $ | 28,540 |
| | $ | 28,992 |
| | $ | 30,988 |
| | $ | 45,200 |
| | $ | 47,815 |
|
| Nonaccrual loans and repossessed assets to total assets | | 0.36 | % | | 0.42 | % | | 0.32 | % | | 0.44 | % | | 0.51 | % |
| | | | | | | | | | | |
| Loans past due 90 days, still accruing | | $ | 43 |
| | $ | 44 |
| | $ | 4,021 |
| | $ | 3,659 |
| | $ | 1,067 |
|
| Loans past due 90 days and still accruing to gross loans | | 0.00 | % | | 0.00 | % | | 0.03 | % | | 0.03 | % | | 0.01 | % |
| Loans past due 30 to 89 days, still accruing | | $ | 10,142 |
| | $ | 5,179 |
| | $ | 4,071 |
| | $ | 10,764 |
| | $ | 6,294 |
|
| Loans past due 30 to 89 days, still accruing to gross loans | | 0.07 | % | | 0.04 | % | | 0.03 | % | | 0.08 | % | | 0.05 | % |
| | | | | | | | | | | |
| Special mention loans | | $ | 155,032 |
| | $ | 199,965 |
| | $ | 141,036 |
| | $ | 175,080 |
| | $ | 148,144 |
|
| Special mention loans to gross loans | | 1.03 | % | | 1.38 | % | | 1.01 | % | | 1.28 | % | | 1.12 | % |
| | | | | | | | | | | |
| Classified loans on accrual | | $ | 127,681 |
| | $ | 122,264 |
| | $ | 165,715 |
| | $ | 133,483 |
| | $ | 106,644 |
|
| Classified loans on accrual to gross loans | | 0.85 | % | | 0.84 | % | | 1.19 | % | | 0.98 | % | | 0.81 | % |
| Classified assets | | $ | 222,004 |
| | $ | 221,803 |
| | $ | 249,491 |
| | $ | 236,786 |
| | $ | 211,782 |
|
| Classified assets to total assets | | 1.09 | % | | 1.11 | % | | 1.32 | % | | 1.31 | % | | 1.23 | % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Analysis of Average Balances, Yields and Rates | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31, 2017 | | September 30, 2017 |
| | | 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 | | $ | 6,597.6 |
| | $ | 86,336 |
| | 5.70 | % | | $ | 6,345.0 |
| | $ | 80,831 |
| | 5.59 | % |
| CRE - non-owner occupied | | 3,734.8 |
| | 55,757 |
| | 5.97 |
| | 3,595.3 |
| | 54,250 |
| | 6.04 |
|
| CRE - owner occupied | | 2,084.0 |
| | 26,081 |
| | 5.01 |
| | 2,032.7 |
| | 25,238 |
| | 4.97 |
|
| Construction and land development | | 1,661.6 |
| | 26,463 |
| | 6.37 |
| | 1,633.4 |
| | 25,897 |
| | 6.34 |
|
| Residential real estate | | 409.9 |
| | 4,941 |
| | 4.82 |
| | 351.5 |
| | 4,151 |
| | 4.72 |
|
| Consumer | | 48.6 |
| | 626 |
| | 5.15 |
| | 52.2 |
| | 729 |
| | 5.59 |
|
| Total loans (1), (2), (3) | | 14,536.5 |
| | 200,204 |
| | 5.72 |
| | 14,010.1 |
| | 191,096 |
| | 5.68 |
|
| Securities: | | | | | | | | | | | | |
| Securities - taxable | | 2,975.0 |
| | 19,350 |
| | 2.60 |
| | 2,778.4 |
| | 17,399 |
| | 2.50 |
|
| Securities - tax-exempt | | 791.5 |
| | 6,962 |
| | 5.21 |
| | 657.1 |
| | 6,185 |
| | 5.61 |
|
| Total securities (1) | | 3,766.5 |
| | 26,312 |
| | 3.15 |
| | 3,435.5 |
| | 23,584 |
| | 3.10 |
|
| Cash and other | | 489.0 |
| | 1,943 |
| | 1.59 |
| | 845.8 |
| | 3,156 |
| | 1.49 |
|
| Total interest earning assets | | 18,792.0 |
| | 228,459 |
| | 5.10 |
| | 18,291.4 |
| | 217,836 |
| | 5.00 |
|
| Non-interest earning assets | | | | | | | | | | | | |
| Cash and due from banks | | 135.0 |
| | | | | | 132.3 |
| | | | |
| Allowance for credit losses | | (138.4 | ) | | | | | | (133.6 | ) | | | | |
| Bank owned life insurance | | 167.1 |
| | | | | | 166.4 |
| | | | |
| Other assets | | 956.3 |
| | | | | | 930.7 |
| | | | |
| Total assets | | $ | 19,912.0 |
| | | | | | $ | 19,387.2 |
| | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | $ | 1,464.5 |
| | $ | 1,116 |
| | 0.30 | % | | $ | 1,476.5 |
| | $ | 1,066 |
| | 0.29 | % |
| Savings and money market | | 6,321.4 |
| | 7,810 |
| | 0.49 |
| | 6,282.4 |
| | 7,135 |
| | 0.45 |
|
| Time certificates of deposit | | 1,595.6 |
| | 3,533 |
| | 0.89 |
| | 1,585.7 |
| | 3,248 |
| | 0.82 |
|
| Total interest-bearing deposits | | 9,381.5 |
| | 12,459 |
| | 0.53 |
| | 9,344.6 |
| | 11,449 |
| | 0.49 |
|
| Short-term borrowings | | 78.1 |
| | 237 |
| | 1.21 |
| | 31.7 |
| | 96 |
| | 1.21 |
|
| Qualifying debt | | 372.8 |
| | 4,734 |
| | 5.08 |
| | 375.3 |
| | 4,708 |
| | 5.02 |
|
| Total interest-bearing liabilities | | 9,832.4 |
| | 17,430 |
| | 0.71 |
| | 9,751.6 |
| | 16,253 |
| | 0.67 |
|
| Non-interest-bearing liabilities | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | 7,502.2 |
| | | | | | 7,174.5 |
| | | | |
| Other liabilities | | 375.2 |
| | | | | | 336.9 |
| | | | |
| Stockholders’ equity | | 2,202.2 |
| | | | | | 2,124.2 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 19,912.0 |
| | | | | | $ | 19,387.2 |
| | | | |
| Net interest income and margin (4) | | | | $ | 211,029 |
| | 4.73 | % | | | | $ | 201,583 |
| | 4.65 | % |
| | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $11.0 million and $10.8 million for the three months ended December 31, 2017 and September 30, 2017, respectively. |
| (2) Included in the yield computation are net loan fees of $11.0 million and accretion on acquired loans of $7.1 million for the three months ended December 31, 2017, compared to $9.4 million and $7.5 million for the three months ended September 30, 2017, respectively. |
| (3) Includes non-accrual loans. |
| (4) Net interest margin is computed by dividing net interest income by total average earning assets. |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Analysis of Average Balances, Yields and Rates | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | Three Months Ended December 31, |
| | | 2017 | | 2016 |
| | | Average
Balance | | Interest | | Average Yield /
Cost | | Average
Balance | | Interest | | Average Yield /
Cost |
| | | ($ in millions) | | ($ in thousands) | | | | ($ in millions) | | ($ in thousands) | | |
| Interest earning assets | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | |
| Commercial | | $ | 6,597.6 |
| | $ | 86,336 |
| | 5.70 | % | | $ | 5,676.6 |
| | $ | 66,931 |
| | 5.18 | % |
| CRE - non-owner occupied | | 3,734.8 |
| | 55,757 |
| | 5.97 |
| | 3,581.1 |
| | 51,565 |
| | 5.76 |
|
| CRE - owner occupied | | 2,084.0 |
| | 26,081 |
| | 5.01 |
| | 1,993.3 |
| | 24,897 |
| | 5.00 |
|
| Construction and land development | | 1,661.6 |
| | 26,463 |
| | 6.37 |
| | 1,431.9 |
| | 22,094 |
| | 6.17 |
|
| Residential real estate | | 409.9 |
| | 4,941 |
| | 4.82 |
| | 264.3 |
| | 2,926 |
| | 4.43 |
|
| Consumer | | 48.6 |
| | 626 |
| | 5.15 |
| | 38.7 |
| | 468 |
| | 4.84 |
|
| Total loans (1), (2), (3) | | 14,536.5 |
| | 200,204 |
| | 5.72 |
| | 12,985.9 |
| | 168,881 |
| | 5.41 |
|
| Securities: | | | | | | | | | | | | |
| Securities - taxable | | 2,975.0 |
| | 19,350 |
| | 2.60 |
| | 2,142.6 |
| | 11,482 |
| | 2.14 |
|
| Securities - tax-exempt | | 791.5 |
| | 6,962 |
| | 5.21 |
| | 591.2 |
| | 5,243 |
| | 5.25 |
|
| Total securities (1) | | 3,766.5 |
| | 26,312 |
| | 3.15 |
| | 2,733.8 |
| | 16,725 |
| | 2.81 |
|
| Cash and other | | 489.0 |
| | 1,943 |
| | 1.59 |
| | 430.0 |
| | 1,805 |
| | 1.68 |
|
| Total interest earning assets | | 18,792.0 |
| | 228,459 |
| | 5.10 |
| | 16,149.7 |
| | 187,411 |
| | 4.87 |
|
| Non-interest earning assets | | | | | | | | | | | | |
| Cash and due from banks | | 135.0 |
| | | | | | 146.0 |
| | | | |
| Allowance for credit losses | | (138.4 | ) | | | | | | (122.7 | ) | | | | |
| Bank owned life insurance | | 167.1 |
| | | | | | 163.9 |
| | | | |
| Other assets | | 956.3 |
| | | | | | 844.0 |
| | | | |
| Total assets | | $ | 19,912.0 |
| | | | | | $ | 17,180.9 |
| | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | $ | 1,464.5 |
| | $ | 1,116 |
| | 0.30 | % | | $ | 1,295.6 |
| | $ | 660 |
| | 0.20 | % |
| Savings and money market | | 6,321.4 |
| | 7,810 |
| | 0.49 |
| | 6,004.4 |
| | 5,043 |
| | 0.34 |
|
| Time certificates of deposit | | 1,595.6 |
| | 3,533 |
| | 0.89 |
| | 1,507.0 |
| | 2,026 |
| | 0.54 |
|
| Total interest-bearing deposits | | 9,381.5 |
| | 12,459 |
| | 0.53 |
| | 8,807.0 |
| | 7,729 |
| | 0.35 |
|
| Short-term borrowings | | 78.1 |
| | 237 |
| | 1.21 |
| | 73.5 |
| | 161 |
| | 0.88 |
|
| Qualifying debt | | 372.8 |
| | 4,734 |
| | 5.08 |
| | 365.4 |
| | 4,252 |
| | 4.65 |
|
| Total interest-bearing liabilities | | 9,832.4 |
| | 17,430 |
| | 0.71 |
| | 9,245.9 |
| | 12,142 |
| | 0.53 |
|
| Non-interest-bearing liabilities | |
| | | | | |
| | | | |
| Non-interest-bearing demand deposits | | 7,502.2 |
| | | | | | 5,752.0 |
| | | | |
| Other liabilities | | 375.2 |
| | | | | | 292.5 |
| | | | |
| Stockholders’ equity | | 2,202.2 |
| | | | | | 1,890.5 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 19,912.0 |
| | | | | | $ | 17,180.9 |
| | | | |
| Net interest income and margin (4) | | | | $ | 211,029 |
| | 4.73 | % | | | | $ | 175,269 |
| | 4.57 | % |
| | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $11.0 million and $9.2 million for the three months ended December 31, 2017 and 2016, respectively. |
| (2) Included in the yield computation are net loan fees of $11.0 million and accretion on acquired loans of $7.1 million for the three months ended December 31, 2017, compared to $8.3 million and $7.0 million for the three months ended December 31, 2016, respectively. |
| (3) Includes non-accrual loans. |
| (4) Net interest margin is computed by dividing net interest income by total average earning assets. |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | | |
| Analysis of Average Balances, Yields and Rates | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | |
| | | Year ended December 31, |
| | | 2017 | | 2016 |
| | | Average
Balance | | Interest | | Average Yield /
Cost | | Average
Balance | | Interest | | Average Yield /
Cost |
| | | ($ in millions) | | ($ in thousands) | | | | ($ in millions) | | ($ in thousands) | | |
| Interest earning assets | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | |
| Commercial | | $ | 6,199.7 |
| | $ | 311,869 |
| | 5.51 | % | | $ | 5,444.4 |
| | $ | 253,262 |
| | 5.14 | % |
| CRE - non-owner occupied | | 3,618.4 |
| | 215,929 |
| | 5.97 |
| | 3,194.0 |
| | 181,678 |
| | 5.69 |
|
| CRE - owner occupied | | 2,033.8 |
| | 101,976 |
| | 5.01 |
| | 2,016.6 |
| | 103,418 |
| | 5.13 |
|
| Construction and land development | | 1,603.3 |
| | 99,427 |
| | 6.20 |
| | 1,307.9 |
| | 83,206 |
| | 6.36 |
|
| Residential real estate | | 339.3 |
| | 16,066 |
| | 4.74 |
| | 289.2 |
| | 13,374 |
| | 4.62 |
|
| Consumer | | 46.0 |
| | 2,243 |
| | 4.87 |
| | 35.8 |
| | 1,658 |
| | 4.63 |
|
| Total loans (1), (2), (3) | | 13,840.5 |
| | 747,510 |
| | 5.62 |
| | 12,287.9 |
| | 636,596 |
| | 5.40 |
|
| Securities: | | | | | | | | | | | | |
| Securities - taxable | | 2,579.3 |
| | 64,035 |
| | 2.48 |
| | 1,789.8 |
| | 39,772 |
| | 2.22 |
|
| Securities - tax-exempt | | 670.7 |
| | 24,604 |
| | 5.45 |
| | 507.1 |
| | 18,768 |
| | 5.34 |
|
| Total securities (1) | | 3,250.0 |
| | 88,639 |
| | 3.10 |
| | 2,296.9 |
| | 58,540 |
| | 2.91 |
|
| Cash and other | | 680.5 |
| | 9,364 |
| | 1.38 |
| | 532.5 |
| | 5,370 |
| | 1.01 |
|
| Total interest earning assets | | 17,771.0 |
| | 845,513 |
| | 4.99 |
| | 15,117.3 |
| | 700,506 |
| | 4.86 |
|
| Non-interest earning assets | | | | | | | | | | | | |
| Cash and due from banks | | 137.5 |
| | | | | | 141.8 |
| | | | |
| Allowance for credit losses | | (132.0 | ) | | | | | | (122.0 | ) | | | | |
| Bank owned life insurance | | 166.1 |
| | | | | | 163.6 |
| | | | |
| Other assets | | 927.0 |
| | | | | | 833.6 |
| | | | |
| Total assets | | $ | 18,869.6 |
| | | | | | $ | 16,134.3 |
| | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | | |
| Interest-bearing transaction accounts | | $ | 1,467.2 |
| | $ | 3,974 |
| | 0.27 | % | | $ | 1,217.3 |
| | $ | 2,231 |
| | 0.18 | % |
| Savings and money market | | 6,208.1 |
| | 26,087 |
| | 0.42 |
| | 5,827.5 |
| | 19,368 |
| | 0.33 |
|
| Time certificates of deposit | | 1,560.9 |
| | 11,904 |
| | 0.76 |
| | 1,615.5 |
| | 8,123 |
| | 0.50 |
|
| Total interest-bearing deposits | | 9,236.2 |
| | 41,965 |
| | 0.45 |
| | 8,660.3 |
| | 29,722 |
| | 0.34 |
|
| Short-term borrowings | | 63.6 |
| | 611 |
| | 0.96 |
| | 80.7 |
| | 573 |
| | 0.71 |
|
| Qualifying debt | | 371.3 |
| | 18,273 |
| | 4.92 |
| | 290.8 |
| | 12,998 |
| | 4.47 |
|
| Total interest-bearing liabilities | | 9,671.1 |
| | 60,849 |
| | 0.63 |
| | 9,031.8 |
| | 43,293 |
| | 0.48 |
|
| Non-interest-bearing liabilities | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | 6,788.8 |
| | | | | | 5,062.3 |
| | | | |
| Other liabilities | | 331.0 |
| | | | | | 269.3 |
| | | | |
| Stockholders’ equity | | 2,078.7 |
| | | | | | 1,770.9 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 18,869.6 |
| | | | | | $ | 16,134.3 |
| | | | |
| Net interest income and margin (4) | | | | $ | 784,664 |
| | 4.65 | % | | | | $ | 657,213 |
| | 4.58 | % |
| | | | | | | | | | | | | |
| (1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $42.0 million and $34.9 million for the year ended December 31, 2017 and 2016, respectively. |
| (2) Included in the yield computation are net loan fees of $37.0 million and accretion on acquired loans of $28.2 million for the year ended December 31, 2017, compared to $28.5 million and $29.2 million for the year 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. |
|
| | | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | |
| Operating Segment Results | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | | | | | | | | | |
| Balance Sheet: | | | | Regional Segments |
| | | Consolidated Company | | Arizona | | Nevada | | Southern California | | Northern California |
| At December 31, 2017 | | (dollars in millions) |
| Assets: | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | 4,237.2 |
| | $ | 2.2 |
| | $ | 8.2 |
| | $ | 2.1 |
| | $ | 1.7 |
|
| Loans, net of deferred loan fees and costs | | 15,093.9 |
| | 3,323.7 |
| | 1,844.8 |
| | 1,934.7 |
| | 1,275.5 |
|
| Less: allowance for credit losses | | (140.0 | ) | | (31.5 | ) | | (18.1 | ) | | (19.5 | ) | | (13.2 | ) |
| Total loans | | 14,953.9 |
| | 3,292.2 |
| | 1,826.7 |
| | 1,915.2 |
| | 1,262.3 |
|
| Other assets acquired through foreclosure, net | | 28.5 |
| | 2.3 |
| | 13.3 |
| | — |
| | 0.2 |
|
| Goodwill and other intangible assets, net | | 300.7 |
| | — |
| | 23.2 |
| | — |
| | 156.5 |
|
| Other assets | | 808.8 |
| | 46.3 |
| | 58.8 |
| | 14.3 |
| | 15.1 |
|
| Total assets | | $ | 20,329.1 |
| | $ | 3,343.0 |
| | $ | 1,930.2 |
| | $ | 1,931.6 |
| | $ | 1,435.8 |
|
| Liabilities: | | | | | | | | | | |
| Deposits | | $ | 16,972.5 |
| | $ | 4,841.2 |
| | $ | 3,951.5 |
| | $ | 2,461.1 |
| | $ | 1,681.7 |
|
| Borrowings and qualifying debt | | 766.9 |
| | — |
| | — |
| | — |
| | — |
|
| Other liabilities | | 360.5 |
| | 11.6 |
| | 20.9 |
| | 3.2 |
| | 11.9 |
|
| Total liabilities | | 18,099.9 |
| | 4,852.8 |
| | 3,972.4 |
| | 2,464.3 |
| | 1,693.6 |
|
| Allocated equity: | | 2,229.2 |
| | 396.6 |
| | 263.7 |
| | 221.7 |
| | 303.4 |
|
| Total liabilities and stockholders' equity | | $ | 20,329.1 |
| | $ | 5,249.4 |
| | $ | 4,236.1 |
| | $ | 2,686.0 |
| | $ | 1,997.0 |
|
| Excess funds provided (used) | | — |
| | 1,906.4 |
| | 2,305.9 |
| | 754.4 |
| | 561.2 |
|
| | | | | | | | | | | |
| No. of offices | | 47 |
| | 10 |
| | 16 |
| | 9 |
| | 3 |
|
| No. of full-time equivalent employees | | 1,725 |
| | 175 |
| | 223 |
| | 178 |
| | 166 |
|
| | | | | | | | | | | |
| Income Statement: | | | | | | | | | | |
| | | | | | | | | | | |
| Three Months Ended December 31, 2017: | | (in thousands) |
| Net interest income (expense) | | $ | 211,029 |
| | $ | 52,765 |
| | $ | 36,927 |
| | $ | 28,079 |
| | $ | 21,749 |
|
| Provision for (recovery) credit losses | | 5,000 |
| | 1,044 |
| | 654 |
| | 120 |
| | 337 |
|
| Net interest income (expense) after provision for credit losses | | 206,029 |
| | 51,721 |
| | 36,273 |
| | 27,959 |
| | 21,412 |
|
| Non-interest income | | 13,688 |
| | 1,214 |
| | 2,335 |
| | 836 |
| | 3,725 |
|
| Non-interest expense | | (95,398 | ) | | (20,731 | ) | | (15,333 | ) | | (13,745 | ) | | (12,190 | ) |
| Income (loss) before income taxes | | 124,319 |
| | 32,204 |
| | 23,275 |
| | 15,050 |
| | 12,947 |
|
| Income tax expense (benefit) | | 34,973 |
| | 12,486 |
| | 8,067 |
| | 6,335 |
| | 5,355 |
|
| Net income | | $ | 89,346 |
| | $ | 19,718 |
| | $ | 15,208 |
| | $ | 8,715 |
| | $ | 7,592 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Year Ended December 31, 2017: | �� | (in thousands) |
| Net interest income (expense) | | $ | 784,664 |
| | $ | 198,622 |
| | $ | 145,001 |
| | $ | 109,177 |
| | $ | 85,360 |
|
| Provision for (recovery of) credit losses | | 17,250 |
| | 1,153 |
| | (4,724 | ) | | 100 |
| | 4,575 |
|
| Net interest income (expense) after provision for credit losses | | 767,414 |
| | 197,469 |
| | 149,725 |
| | 109,077 |
| | 80,785 |
|
| Non-interest income | | 45,344 |
| | 4,757 |
| | 9,135 |
| | 3,396 |
| | 10,000 |
|
| Non-interest expense | | (360,941 | ) | | (76,117 | ) | | (61,066 | ) | | (51,808 | ) | | (48,387 | ) |
| Income (loss) before income taxes | | 451,817 |
| | 126,109 |
| | 97,794 |
| | 60,665 |
| | 42,398 |
|
| Income tax expense (benefit) | | 126,325 |
| | 49,317 |
| | 34,133 |
| | 25,529 |
| | 17,591 |
|
| Net income (loss) | | $ | 325,492 |
| | $ | 76,792 |
| | $ | 63,661 |
| | $ | 35,136 |
| | $ | 24,807 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| 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, 2017 | | (dollars in millions) |
| Assets: | | | | | | | | | | | | |
| Cash, cash equivalents, and investment securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 4,223.0 |
|
| Loans, net of deferred loan fees and costs | | 162.1 |
| | 1,580.4 |
| | 1,097.9 |
| | 1,327.7 |
| | 2,543.0 |
| | 4.1 |
|
| Less: allowance for credit losses | | (1.6 | ) | | (15.6 | ) | | (11.4 | ) | | (4.0 | ) | | (25.0 | ) | | (0.1 | ) |
| Total loans | | 160.5 |
| | 1,564.8 |
| | 1,086.5 |
| | 1,323.7 |
| | 2,518.0 |
| | 4.0 |
|
| Other assets acquired through foreclosure, net | | — |
| | — |
| | — |
| | — |
| | — |
| | 12.7 |
|
| Goodwill and other intangible assets, net | | — |
| | — |
| | 120.9 |
| | 0.1 |
| | — |
| | — |
|
| Other assets | | 0.9 |
| | 17.9 |
| | 6.0 |
| | 5.9 |
| | 15.5 |
| | 628.1 |
|
| Total assets | | $ | 161.4 |
| | $ | 1,582.7 |
| | $ | 1,213.4 |
| | $ | 1,329.7 |
| | $ | 2,533.5 |
| | $ | 4,867.8 |
|
| Liabilities: | | | | | | | | | | | | |
| Deposits | | $ | 2,230.4 |
| | $ | — |
| | $ | 1,737.6 |
| | $ | — |
| | $ | — |
| | $ | 69.0 |
|
| Borrowings and qualifying debt | | — |
| | — |
| | — |
| | — |
| | — |
| | 766.9 |
|
| Other liabilities | | 1.2 |
| | 42.4 |
| | 0.8 |
| | 0.4 |
| | 5.5 |
| | 262.6 |
|
| Total liabilities | | 2,231.6 |
| | 42.4 |
| | 1,738.4 |
| | 0.4 |
| | 5.5 |
| | 1,098.5 |
|
| Allocated equity: | | 59.4 |
| | 126.5 |
| | 244.1 |
| | 108.3 |
| | 206.0 |
| | 299.5 |
|
| Total liabilities and stockholders' equity | | $ | 2,291.0 |
| | $ | 168.9 |
| | $ | 1,982.5 |
| | $ | 108.7 |
| | $ | 211.5 |
| | $ | 1,398.0 |
|
| Excess funds provided (used) | | 2,129.6 |
| | (1,413.8 | ) | | 769.1 |
| | (1,221.0 | ) | | (2,322.0 | ) | | (3,469.8 | ) |
| | | | | | | | | | | | | |
| No. of offices | | 1 |
| | 1 |
| | 9 |
| | 1 |
| | 4 |
| | (7 | ) |
| No. of full-time equivalent employees | | 66 |
| | 10 |
| | 62 |
| | 12 |
| | 38 |
| | 795 |
|
| | | | | | | | | | | | | |
| Income Statement: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended December 31, 2017: | | (in thousands) |
| Net interest income (expense) | | $ | 13,827 |
| | $ | 7,243 |
| | $ | 22,862 |
| | $ | 14,624 |
| | $ | 19,528 |
| | $ | (6,575 | ) |
| Provision for (recovery) credit losses | | 9 |
| | (202 | ) | | 2,005 |
| | 1,569 |
| | (536 | ) | | — |
|
| Net interest income (expense) after provision for credit losses | | 13,818 |
| | 7,445 |
| | 20,857 |
| | 13,055 |
| | 20,064 |
| | (6,575 | ) |
| Non-interest income | | 140 |
| | — |
| | 2,688 |
| | 52 |
| | 141 |
| | 2,557 |
|
| Non-interest expense | | (6,873 | ) | | (2,415 | ) | | (9,996 | ) | | (2,217 | ) | | (5,978 | ) | | (5,920 | ) |
| Income (loss) before income taxes | | 7,085 |
| | 5,030 |
| | 13,549 |
| | 10,890 |
| | 14,227 |
| | (9,938 | ) |
| Income tax expense (benefit) | | 2,571 |
| | 1,893 |
| | 5,081 |
| | 4,084 |
| | 5,310 |
| | (16,209 | ) |
| Net income | | $ | 4,514 |
| | $ | 3,137 |
| | $ | 8,468 |
| | $ | 6,806 |
| | $ | 8,917 |
| | $ | 6,271 |
|
| | | | | | | | | | | | | |
| Year Ended December 31, 2017: | | (in thousands) |
| Net interest income (expense) | | $ | 54,102 |
| | $ | 28,485 |
| | $ | 82,473 |
| | $ | 56,961 |
| | $ | 65,908 |
| | $ | (41,425 | ) |
| Provision for (recovery of) credit losses | | 341 |
| | 593 |
| | 2,821 |
| | 4,493 |
| | 9,729 |
| | (1,831 | ) |
| Net interest income (expense) after provision for credit losses | | 53,761 |
| | 27,892 |
| | 79,652 |
| | 52,468 |
| | 56,179 |
| | (39,594 | ) |
| Non-interest income | | 558 |
| | — |
| | 8,422 |
| | 52 |
| | 1,772 |
| | 7,252 |
|
| Non-interest expense | | (28,289 | ) | | (8,522 | ) | | (36,726 | ) | | (10,166 | ) | | (20,551 | ) | | (19,309 | ) |
| Income (loss) before income taxes | | 26,030 |
| | 19,370 |
| | 51,348 |
| | 42,354 |
| | 37,400 |
| | (51,651 | ) |
| Income tax expense (benefit) | | 9,676 |
| | 6,317 |
| | 19,255 |
| | 15,883 |
| | 14,000 |
| | (65,376 | ) |
| Net income (loss) | | $ | 16,354 |
| | $ | 13,053 |
| | $ | 32,093 |
| | $ | 26,471 |
| | $ | 23,400 |
| | $ | 13,725 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| 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 | | 1,514 |
| | 169 |
| | 228 |
| | 57 |
| | 275 |
|
| | | | | | | | | | | |
| Income Statements: | | | | | | | | | | |
| | | | | | | | | | | |
| 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 |
|
| | | | | | | | | | | |
| Year Ended December 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 657,213 |
| | $ | 170,513 |
| | $ | 137,507 |
| | $ | 103,542 |
| | $ | 88,162 |
|
| Provision for (recovery of) credit losses | | 8,000 |
| | 9,912 |
| | (3,337 | ) | | (580 | ) | | 2,587 |
|
| Net interest income (expense) after provision for credit losses | | 649,213 |
| | 160,601 |
| | 140,844 |
| | 104,122 |
| | 85,575 |
|
| Non-interest income | | 42,915 |
| | 6,887 |
| | 8,622 |
| | 2,550 |
| | 10,422 |
|
| Non-interest expense | | (330,949 | ) | | (63,406 | ) | | (60,570 | ) | | (45,643 | ) | | (53,073 | ) |
| Income (loss) before income taxes | | 361,179 |
| | 104,082 |
| | 88,896 |
| | 61,029 |
| | 42,924 |
|
| Income tax expense (benefit) | | 101,381 |
| | 40,832 |
| | 31,113 |
| | 25,663 |
| | 18,049 |
|
| Net income (loss) | | $ | 259,798 |
| | $ | 63,250 |
| | $ | 57,783 |
| | $ | 35,366 |
| | $ | 24,875 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| 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 | | 55 |
| | 7 |
| | 59 |
| | 21 |
| | 32 |
| | 611 |
|
| | | | | | | | | | | | | |
| Income Statement: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| 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 | ) |
| | | | | | | | | | | | | |
| Year Ended December 31, 2016: | | (in thousands) |
| Net interest income (expense) | | $ | 41,539 |
| | $ | 20,900 |
| | $ | 69,143 |
| | $ | 38,583 |
| | $ | 49,893 |
| | $ | (62,569 | ) |
| Provision for (recovery of) credit losses | | 256 |
| | (183 | ) | | (1,626 | ) | | — |
| | 4,200 |
| | (3,229 | ) |
| Net interest income (expense) after provision for credit losses | | 41,283 |
| | 21,083 |
| | 70,769 |
| | 38,583 |
| | 45,693 |
| | (59,340 | ) |
| Non-interest income | | 460 |
| | 59 |
| | 6,728 |
| | — |
| | 2,315 |
| | 4,872 |
|
| Non-interest expense | | (24,019 | ) | | (7,936 | ) | | (31,271 | ) | | (8,544 | ) | | (15,204 | ) | | (21,283 | ) |
| Income (loss) before income taxes | | 17,724 |
| | 13,206 |
| | 46,226 |
| | 30,039 |
| | 32,804 |
| | (75,751 | ) |
| Income tax expense (benefit) | | 6,647 |
| | 4,952 |
| | 17,335 |
| | 11,265 |
| | 12,302 |
| | (66,777 | ) |
| Net income (loss) | | $ | 11,077 |
| | $ | 8,254 |
| | $ | 28,891 |
| | $ | 18,774 |
| | $ | 20,502 |
| | $ | (8,974 | ) |
|
| | | | | | | | | | | | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries | | | | | | | | | |
| Reconciliation of Non-GAAP Financial Measures | | | | | | | | | |
| Unaudited | | | | | | | | | |
| | | | | | | | | | |
| Operating Pre-Provision Net Revenue by Quarter: | | | | | | | | |
| | Three Months Ended |
| | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | (in thousands) |
| Total non-interest income | $ | 13,688 |
| | $ | 10,456 |
| | $ | 10,601 |
| | $ | 10,599 |
| | $ | 10,540 |
|
| Less: | | | | | | | | | |
| Gains (losses) on sales of investment securities, net | 1,436 |
| | 319 |
| | (47 | ) | | 635 |
| | 58 |
|
| Unrealized gains (losses) on assets and liabilities measured at fair value, net | — |
| | — |
| | — |
| | (1 | ) | | 37 |
|
| Total operating non-interest income | 12,252 |
| | 10,137 |
| | 10,648 |
| | 9,965 |
| | 10,445 |
|
| Plus: net interest income | 211,029 |
| | 201,583 |
| | 192,743 |
| | 179,309 |
| | 175,269 |
|
Net operating revenue (1) | $ | 223,281 |
| | $ | 211,720 |
| | $ | 203,391 |
| | $ | 189,274 |
| | $ | 185,714 |
|
| | | | | | | | | | |
| Total non-interest expense | $ | 95,398 |
| | $ | 89,296 |
| | $ | 88,420 |
| | $ | 87,827 |
| | $ | 88,645 |
|
| Less: | | | | | | | | | |
| Net (gain) loss on sales and valuations of repossessed and other assets | (34 | ) | | 266 |
| | 231 |
| | (543 | ) | | (34 | ) |
| Acquisition / restructure expense | — |
| | — |
| | — |
| | — |
| | 6,021 |
|
Total operating non-interest expense (1) | $ | 95,432 |
| | $ | 89,030 |
| | $ | 88,189 |
| | $ | 88,370 |
| | $ | 82,658 |
|
| | | | | | | | | | |
Operating pre-provision net revenue (2) | $ | 127,849 |
| | $ | 122,690 |
| | $ | 115,202 |
| | $ | 100,904 |
| | $ | 103,056 |
|
| | | | | | | | | | |
| Plus: | | | | | | | | | |
| Non-operating revenue adjustments | 1,436 |
| | 319 |
| | (47 | ) | | 634 |
| | 95 |
|
| Less: | | | | | | | | | |
| Provision for credit losses | 5,000 |
| | 5,000 |
| | 3,000 |
| | 4,250 |
| | 1,000 |
|
| Non-operating expense adjustments | (34 | ) | | 266 |
| | 231 |
| | (543 | ) | | 5,987 |
|
| Income tax expense | 34,973 |
| | 34,899 |
| | 31,964 |
| | 24,489 |
| | 26,364 |
|
| Net income | $ | 89,346 |
| | $ | 82,844 |
| | $ | 79,960 |
| | $ | 73,342 |
| | $ | 69,800 |
|
(1), (2) See Non-GAAP Financial Measures footnotes on page 23.
|
| | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
|
| | | | | | | |
| Operating Pre-Provision Net Revenue by Year: | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 |
| Total non-interest income | $ | 45,344 |
| | $ | 42,915 |
|
| Less: | | | |
| Gains (losses) on sales of investment securities, net | 2,343 |
| | 1,059 |
|
| Unrealized gains (losses) on assets and liabilities measured at fair value, net | (1 | ) | | 8 |
|
| Total operating non-interest income | 43,002 |
| | 41,848 |
|
| Plus: net interest income | 784,664 |
| | 657,213 |
|
Net operating revenue (1) | $ | 827,666 |
| | $ | 699,061 |
|
| | | | |
| Total non-interest expense | $ | 360,941 |
| | $ | 330,949 |
|
| Less: | | | |
| Net (gain) loss on sales and valuations of repossessed and other assets | (80 | ) | | (125 | ) |
| Acquisition / restructure expense | — |
| | 12,412 |
|
Total operating non-interest expense (1) | $ | 361,021 |
| | $ | 318,662 |
|
| | | | |
Operating pre-provision net revenue (2) | $ | 466,645 |
| | $ | 380,399 |
|
| | | | |
| Plus: | | | |
| Non-operating revenue adjustments | 2,342 |
| | 1,067 |
|
| Less: | | | |
| Provision for credit losses | 17,250 |
| | 8,000 |
|
| Non-operating expense adjustments | (80 | ) | | 12,287 |
|
| Income tax expense | 126,325 |
| | 101,381 |
|
| Net income | $ | 325,492 |
| | $ | 259,798 |
|
|
| | | | | | | | | | | | | | | | | | | |
| Tangible Common Equity: | | | | | | | | | |
| | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | (dollars and shares in thousands) |
| Total stockholders' equity | $ | 2,229,160 |
| | $ | 2,145,627 |
| | $ | 2,058,674 |
| | $ | 1,968,992 |
| | $ | 1,891,529 |
|
| Less: goodwill and intangible assets | 300,748 |
| | 301,157 |
| | 301,645 |
| | 302,133 |
| | 302,894 |
|
| Total tangible common equity | 1,928,412 |
| | 1,844,470 |
| | 1,757,029 |
| | 1,666,859 |
| | 1,588,635 |
|
| Plus: deferred tax - attributed to intangible assets | 2,698 |
| | 4,341 |
| | 4,550 |
| | 4,759 |
| | 4,949 |
|
| Total tangible common equity, net of tax | $ | 1,931,110 |
| | $ | 1,848,811 |
| | $ | 1,761,579 |
| | $ | 1,671,618 |
| | $ | 1,593,584 |
|
| Total assets | $ | 20,329,085 |
| | $ | 19,922,221 |
| | $ | 18,844,745 |
| | $ | 18,122,506 |
| | $ | 17,200,842 |
|
| Less: goodwill and intangible assets, net | 300,748 |
| | 301,157 |
| | 301,645 |
| | 302,133 |
| | 302,894 |
|
| Tangible assets | 20,028,337 |
| | 19,621,064 |
| | 18,543,100 |
| | 17,820,373 |
| | 16,897,948 |
|
| Plus: deferred tax - attributed to intangible assets | 2,698 |
| | 4,341 |
| | 4,550 |
| | 4,759 |
| | 4,949 |
|
| Total tangible assets, net of tax | $ | 20,031,035 |
| | $ | 19,625,405 |
| | $ | 18,547,650 |
| | $ | 17,825,132 |
| | $ | 16,902,897 |
|
Tangible common equity ratio (3) | 9.6 | % | | 9.4 | % | | 9.5 | % | | 9.4 | % | | 9.4 | % |
| Common shares outstanding | 105,487 |
| | 105,493 |
| | 105,429 |
| | 105,428 |
| | 105,071 |
|
Tangible book value per share, net of tax (4) | $ | 18.31 |
| | $ | 17.53 |
| | $ | 16.71 |
| | $ | 15.86 |
| | $ | 15.17 |
|
| | | | | | | | | | |
(1), (2), (3), (4) See Non-GAAP Financial Measures footnotes on page 23. |
|
| | | | | | | | | |
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
|
| | | | | | | | | | | | | | | | | | | |
| Operating Efficiency Ratio by Quarter: | | | | | | | | | |
| | Three Months Ended |
| | Dec 31, 2017 | | Sep 30, 2017 | | Jun 30, 2017 | | Mar 31, 2017 | | Dec 31, 2016 |
| | (in thousands) |
| Total operating non-interest expense | $ | 95,432 |
| | $ | 89,030 |
| | $ | 88,189 |
| | $ | 88,370 |
| | $ | 82,658 |
|
| Divided by: | | | | | | | | | |
| Total net interest income | 211,029 |
| | 201,583 |
| | 192,743 |
| | 179,309 |
| | 175,269 |
|
| Plus: | | | | | | | | | |
| Tax equivalent interest adjustment | 11,023 |
| | 10,837 |
| | 10,453 |
| | 9,676 |
| | 9,165 |
|
| Operating non-interest income | 12,252 |
| | 10,137 |
| | 10,648 |
| | 9,965 |
| | 10,445 |
|
| | $ | 234,304 |
| | $ | 222,557 |
| | $ | 213,844 |
| | $ | 198,950 |
| | $ | 194,879 |
|
Operating efficiency ratio - tax equivalent basis (5) | 40.7 | % | | 40.0 | % | | 41.2 | % | | 44.4 | % | | 42.4 | % |
|
| | | | | | | |
| Operating Efficiency Ratio: | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 |
| | (in thousands) |
| Total operating non-interest expense | $ | 361,021 |
| | $ | 318,662 |
|
| Divided by: | | | |
| Total net interest income | 784,664 |
| | 657,213 |
|
| Plus: | | | |
| Tax equivalent interest adjustment | 41,989 |
| | 34,902 |
|
| Operating non-interest income | 43,002 |
| | 41,848 |
|
| | $ | 869,655 |
| | $ | 733,963 |
|
Operating efficiency ratio - tax equivalent basis (5) | 41.5 | % | | 43.4 | % |
(5) See Non-GAAP Financial Measures footnotes on page 23.
|
|
| Western Alliance Bancorporation and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| Unaudited |
Regulatory Capital:
|
| | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
| | (in thousands) |
| Common Equity Tier 1: | | | |
| Common equity | $ | 2,229,160 |
| | $ | 1,891,529 |
|
| Less: | | | |
| Non-qualifying goodwill and intangibles | 296,420 |
| | 294,754 |
|
| Disallowed deferred tax asset | 638 |
| | 1,400 |
|
| AOCI related adjustments | (9,496 | ) | | (13,460 | ) |
| Unrealized gain on changes in fair value liabilities | 7,786 |
| | 8,118 |
|
Common equity Tier 1 (regulatory) (6) (9) | $ | 1,933,812 |
| | $ | 1,600,717 |
|
Divided by: estimated risk-weighted assets (regulatory (7) (9) | $ | 18,570,922 |
| | $ | 15,980,092 |
|
Common equity Tier 1 ratio (7) (9) | 10.4 | % | | 10.0 | % |
| | | | |
Common equity Tier 1 (regulatory) (6)(9) | 1,933,812 |
| | 1,600,717 |
|
| Plus: | | | |
| Trust preferred securities | 81,500 |
| | 81,500 |
|
| Less: | | | |
| Disallowed deferred tax asset | — |
| | 934 |
|
| Unrealized gain on changes in fair value of liabilities | 2,106 |
| | 5,412 |
|
Tier 1 capital (7) (9) | $ | 2,013,206 |
| | $ | 1,675,871 |
|
| Divided by: Tangible average assets | $ | 19,624,519 |
| | $ | 16,868,674 |
|
| Tier 1 leverage ratio | 10.3 | % | | 9.9 | % |
| | | | |
| Total Capital: | | | |
Tier 1 capital (regulatory) (6) (9) | $ | 2,013,206 |
| | $ | 1,675,871 |
|
| Plus: | | | |
| Subordinated debt | 300,745 |
| | 299,927 |
|
| Qualifying allowance for credit losses | 140,050 |
| | 124,704 |
|
| Other | 6,174 |
| | 6,978 |
|
| Less: Tier 2 qualifying capital deductions | — |
| | — |
|
| Tier 2 capital | $ | 446,969 |
| | $ | 431,609 |
|
| | | | |
| Total capital | $ | 2,460,175 |
| | $ | 2,107,480 |
|
| | | | |
| Total capital ratio | 13.2 | % | | 13.2 | % |
| | | | |
| Classified assets to Tier 1 capital plus allowance for credit losses: | | | |
| Classified assets | $ | 222,004 |
| | $ | 211,782 |
|
| Divided by: | | | |
Tier 1 capital (7) (9) | 2,013,206 |
| | 1,675,871 |
|
| Plus: Allowance for credit losses | 140,050 |
| | 124,704 |
|
| Total Tier 1 capital plus allowance for credit losses | $ | 2,153,256 |
| | $ | 1,800,575 |
|
| | | | |
Classified assets to Tier 1 capital plus allowance (8) (9) | 10.3 | % | | 11.8 | % |
| | | | |
(6), (7), (8), (9) See Non-GAAP Financial Measures footnotes on page 23. | | | |
|
| | | | | | | | |
| Non-GAAP Financial Measures Footnotes |
| | | | | | | | | |
| (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) | 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. |
| (7) | 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) of 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. |
| (8) | We believe this non-GAAP ratio provides an important regulatory metric to analyze asset quality. |
| (9) | Current quarter is preliminary until Call Report is filed. |
CONTACT:
Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
