UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 17, 2013
WESTERN
ALLIANCE BANCORPORATION
(Exact
name of registrant as specified in its charter)
Arizona |
001-32550 |
88-0365922 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
One E. Washington Street, Phoenix, Arizona 85004
(Address
of principal executive offices) (Zip Code)
(602)389-3500
(Registrant's
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On October 17, 2013, Western Alliance Bancorporation (the “Company”) issued a press release reporting results for the fiscal quarter ended September 30, 2013 and posted on its website its third quarter 2013 Earnings Conference Call Presentation, which contains certain additional historical and forward-looking information relating to the Company. Copies of the press release and presentation slides are attached hereto as Exhibits 99.1 and 99.2, respectively.
The information in this report (including Exhibits 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
99.1 Press Release dated October 17, 2013.
99.2 Third Quarter 2013 Earnings Conference Call dated October 18, 2013.
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTERN ALLIANCE BANCORPORATION |
|
(Registrant) | |
/s/ Dale Gibbons | |
-------------------------------- | |
Dale Gibbons | |
Executive Vice President and | |
Chief Financial Officer | |
Date: October 17, 2013 |
Exhibit 99.1
Western Alliance Reports Third Quarter 2013 Net Income of $28.2 Million, or $0.32 Per Share
PHOENIX--(BUSINESS WIRE)--October 17, 2013--Western Alliance Bancorporation (NYSE:WAL) announced today its financial results for the third quarter 2013.
Third Quarter 2013 Highlights:
Financial Performance
“Once again, Western Alliance delivered strong financial performance with key metrics relating to growth, margin, efficiency and asset quality all improving during the third quarter, resulting in record revenue and operating earnings,” said Robert Sarver, Chairman and Chief Executive Officer of Western Alliance Bancorporation. “Net interest income increased 17% from a year ago, while expense growth was held to 10%. Our asset quality improvement has been notable as net loan losses swung from a $9 million charge in the third quarter of 2012 to net recoveries of $1.5 million this quarter.”
Sarver continued, “As our performance has improved, we’re also resolved to maintain a strong risk discipline. During the third quarter, we successfully completed the conversion of Centennial Bank to our systems, giving us more real-time oversight of its operations. Pending regulatory approval, we also anticipate integrating our three subsidiary banks into one charter at the end of the year, which will enable us to further enhance our risk management architecture.”
Western Alliance Bancorporation reported net income of $28.2 million, or $0.32 per share, in the third quarter 2013, compared to $15.5 million, or $0.18 per share, one year ago. Key drivers of performance improvement include sustained organic balance sheet growth, prudent expense management, and reduced legacy asset costs against the backdrop of improved economic conditions.
Total loans increased $104 million to $6.52 billion at September 30, 2013 from $6.41 billion at June 30, 2013. Loans increased $1.18 billion, or 22.2%, from September 30, 2012. The increase over the past year was primarily driven by the Western Liberty Bancorp and Centennial Bank acquisitions, as well as organic growth in commercial and industrial, commercial real estate, and construction and land development loans.
Total deposits increased $274 million to $7.28 billion at September 30, 2013 from $7.00 billion at June 30, 2013. Deposits increased $1.11 billion from September 30, 2012. The increases in each of these periods were primarily due to growth in time certificates and savings and money market deposits.
Income Statement
Net interest income was $84.6 million in the third quarter 2013, an increase of $2.4 million, or 2.9%, from $82.2 million in the second quarter of 2013 and an increase of $12.7 million, or 17.5%, compared to the third quarter 2012. The Company’s net interest margin increased in the third quarter 2013 to 4.41%, compared to 4.36% in the second quarter 2013. It was 4.41% in the third quarter 2012.
Operating non-interest income was $5.8 million for the third quarter 2013, up from $5.0 million in the second quarter of 2013 and $5.4 million for the third quarter of 2012.1
Net operating revenue was $90.4 million for the third quarter 2013, up from $87.2 million for the second quarter of 2013 and an increase of 17.0% from $77.3 million for the third quarter 2012.1
Operating non-interest expense was $48.3 million for the third quarter 2013, compared to $47.0 million for the second quarter of 2013 and $43.9 million for the third quarter of 2012.1 The Company’s operating efficiency ratio1 on a tax equivalent basis was 51.6% for the third quarter 2013, an improvement from 52.2% for the second quarter 2013 and 54.9% for the third quarter 2012 as the growth rate in revenue continued to outpace that of expense.
The Company had 1,023 full-time equivalent employees and 42 offices at September 30, 2013, compared to 964 employees and 39 offices one year ago.
The Company views its pre-tax, pre-provision operating earnings as a key metric for assessing the Company’s earning power, which it defines as net operating revenue less operating non-interest expense. For the third quarter 2013, the Company’s pre-tax, pre-provision operating earnings were $42.1 million, up from $40.1 million in the second quarter 2013 and up 25.9% from $33.4 million in the third quarter 2012.
There was no provision for credit losses for the third quarter 2013, compared to $3.5 million for the second quarter 2013. The provision for the third quarter of 2012 was $8.9 million. Net loan recoveries in the third quarter 2013 were $1.5 million, or 0.10% of average loans (annualized), compared to 0.17% of net loan charge-offs to average loans (annualized) for the second quarter 2013. Net charge-offs for the third quarter 2012 were $9.0 million or 0.70% of average loans (annualized).
Nonaccrual loans decreased $6.3 million to $76.6 million during the quarter. Loans past due 90 days and still accruing interest totaled $5.5 million at September 30, 2013, compared to $3.9 million at June 30, 2013 and $1.7 million at September 30, 2012. Loans past due 30-89 days, still accruing interest totaled $8.7 million at quarter end, up from $7.3 million at June 30, 2013 and down from $10.2 million at September 30, 2012.
As the Company’s asset quality improved and its capital increased, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, improved to 31% at September 30, 2013 from 39% at September 30, 2012.1
Net loss on sales and valuation of repossessed assets (primarily other real estate) was $0.4 million for the third quarter 2013, compared to a $1.1 million net gain in the second quarter 2013 and a $0.1 million loss in the third quarter 2012. At September 30, 2013 and June 30, 2013, other repossessed assets totaled $77 million, compared to $78 million one year ago.
Balance Sheet
Gross loans totaled $6.52 billion at September 30, 2013, an increase of $104 million from June 30, 2013 and an increase of $1.18 billion from $5.33 billion at September 30, 2012. At September 30, 2013 and June 30, 2013, the allowance for credit losses was 1.50% of total loans, compared to 1.83% at September 30, 2012, reflecting an improvement in the Company’s asset quality.
Deposits totaled $7.28 billion at September 30, 2013, an increase of $274 million from $7.00 billion at June 30, 2013 and an increase of $1.11 billion from $6.16 billion at September 30, 2012. Non-interest bearing deposits were $1.97 billion at September 30, 2013, compared to $1.92 billion at June 30, 2013 and $1.84 billion at September 30, 2012. Non-interest bearing deposits comprised 27.1% of total deposits at September 30, 2013, compared to 29.9% a year ago, while the proportion of savings and money market accounts increased to 41.9% from 41.2% during the same period. Certificates of deposit as a percent of total deposits were 21.7% at September 30, 2013. The Company’s ratio of loans to deposits was 89.6% at September 30, 2013 compared to 91.2% at June 30, 2013 and 86.5% at September 30, 2012.
Stockholders’ equity at September 30, 2013 increased to $826 million from $800 million at June 30, 2013. At September 30, 2013, tangible common equity was 7.4% of tangible assets1 and total risk-based capital was 12.5% of risk-weighted assets. The Company’s tangible book value per share1 was $7.57 at September 30, 2013, up 19.2% during the past year.
Total assets increased to $8.92 billion at September 30, 2013 from $8.59 billion at June 30, 2013, and increased 20.5% from $7.40 billion at September 30, 2012.
Operating Unit Highlights
Western Alliance Bank (doing business as Alliance Bank of Arizona and First Independent Bank in Nevada) reported loan growth of $135 million during the third quarter 2013 and $718 million during the last 12 months to $2.59 billion. Third quarter loan growth came primarily from commercial and industrial, commercial real estate and construction and land development loans. Deposits increased $183 million in the third quarter and $681 million during the last 12 months to $2.83 billion. Net income for Western Alliance Bank was $9.8 million during the third quarter 2013 compared with net income of $20.5 million during the second quarter of 2013 (which includes a bargain purchase gain of $10.0 million from the acquisition of Centennial Bank) and net income of $8.8 million during the third quarter 2012.
Bank of Nevada, which was the recipient of net affiliate loan sales and participations, reported that loans decreased by $29 million during the third quarter of 2013 and increased $326 million during the last 12 months to $2.39 billion at September 30, 2013. The decline in third quarter loans came primarily from a decrease in commercial leases, construction and land development and residential real estate loans. Deposits decreased by $6 million in the third quarter of 2013 and increased $205 million over the last twelve months to $2.61 billion. Net income for Bank of Nevada was $16.3 million for the third quarter 2013, compared with net income of $12.7 million for the second quarter of 2013 and net income of $5.8 million during the third quarter 2012.
The Torrey Pines Bank segment, which excludes the discontinued operations of PartnersFirst, reported that loans increased $2 million during the third quarter 2013 and increased $94 million during the last 12 months to $1.52 billion. The slight third quarter increase in the loan balances were primarily attributable to an increase in construction and land development loans, which were largely offset by a decrease in commercial real estate and commercial and industrial loans. Deposits increased $95 million in the third quarter 2013 and $231 million over the last 12 months to $1.84 billion. Net income for Torrey Pines Bank was $4.6 million during the third quarter 2013, compared with net income of $5.8 million for the second quarter of 2013 and net income of $6.4 million during the third quarter 2012.
Attached to this press release is summarized financial information for the quarter ended September 30, 2013.
Subsequent Event
On October 1, 2013, the Company completed the sale of certain receivables related to its discontinued affinity credit card business, PartnersFirst. These receivables were classified as loans held for sale and totaled $25.4 million as of September 30, 2013.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its third quarter 2013 financial results at 12:00 p.m. ET on Friday, October 18, 2013. Participants may access the call by dialing 1-888-317-6003 and using passcode: 9765434 or via live audio webcast using the website link: https://services.choruscall.com/links/wal131018.html. The webcast is also available via the Company’s website at www.westernalliancebancorp.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 2:00 p.m. ET October 18th through November 1st at 9:00 a.m. ET by dialing 1-877-344-7529 passcode: 10034832.
About Western Alliance Bancorporation
Western Alliance Bancorporation is the parent company of Bank of Nevada, Western Alliance Bank doing business as Alliance Bank of Arizona and First Independent Bank, and Torrey Pines Bank. These organizations provide a broad array of deposit and credit services to clients in Nevada, Arizona and California. Staffed with experienced financial professionals, these organizations deliver a broader product array and larger credit capacity than community banks, yet are empowered to be more responsive to customers' needs than larger institutions. Additional investor information can be accessed on the Investor Relations page of the Company's website, www.westernalliancebancorp.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding guidance or expectations relating to balance sheet growth, interest margin, operating efficiency, asset quality, and regulatory capital. 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: factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.
This press release contains both financial measures based on accounting principles generally accepted in the United States (“GAAP”) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Western Alliance Bancorporation’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
1 See Reconciliation of Non-GAAP Financial Measures beginning on page 16
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||||||
Summary Consolidated Financial Data | ||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||
At or for the Three Months | For the Nine Months | |||||||||||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | Change % | 2013 | 2012 | Change % | |||||||||||||||||||||||||||||
Selected Balance Sheet Data: | ||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||
Total assets | $ | 8,921.4 | $ | 7,403.6 |
20.5 |
% |
|
|||||||||||||||||||||||||||
Loans, net of deferred fees | 6,516.3 | 5,332.9 | 22.2 | |||||||||||||||||||||||||||||||
Securities and money market investments | 1,370.8 | 1,338.9 | 2.4 | |||||||||||||||||||||||||||||||
Securities purchased under agreement to resell | 128.1 | 139.8 | (8.4 | ) | ||||||||||||||||||||||||||||||
Total deposits | 7,275.3 | 6,162.0 | 18.1 | |||||||||||||||||||||||||||||||
Borrowings | 394.1 | 223.6 | 76.3 | |||||||||||||||||||||||||||||||
Junior subordinated debt | 39.4 | 36.2 | 8.8 | |||||||||||||||||||||||||||||||
Stockholders' equity | 826.3 | 698.0 | 18.4 | |||||||||||||||||||||||||||||||
Selected Income Statement Data: | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||
Interest income | $ | 92,680 | $ | 78,669 |
17.8 |
% |
|
$ | 265,073 | $ | 233,952 |
13.3 |
% |
|||||||||||||||||||||
Interest expense | 8,121 | 6,723 | 20.8 | 22,159 | 21,144 | 4.8 | ||||||||||||||||||||||||||||
Net interest income | 84,559 | 71,946 | 17.5 | 242,914 | 212,808 | 14.1 | ||||||||||||||||||||||||||||
Provision for loan losses | - | 8,932 | (100.0 | ) | 8,920 | 35,343 | (74.8 | ) | ||||||||||||||||||||||||||
Net interest income after provision for credit losses | 84,559 | 63,014 | 34.2 | 233,994 | 177,465 | 31.9 | ||||||||||||||||||||||||||||
Non-interest income | 2,625 | 6,982 | (62.4 | ) | 17,386 | 20,263 | (14.2 | ) | ||||||||||||||||||||||||||
Non-interest expense | 49,675 | 47,543 | 4.5 | 145,135 | 139,871 | 3.8 | ||||||||||||||||||||||||||||
Income from continuing operations, before income tax expense | 37,509 | 22,453 | 67.1 | 106,245 | 57,857 | 83.6 | ||||||||||||||||||||||||||||
Income tax expense | 9,288 | 6,752 | 37.6 | 22,913 | 16,452 | 39.3 | ||||||||||||||||||||||||||||
Income from continuing operations | 28,221 | 15,701 | 79.7 | 83,332 | 41,405 | 101.3 | ||||||||||||||||||||||||||||
Loss on discontinued operations, net | (29 | ) | (243 | ) | 88.1 | (160 | ) | (686 | ) | (76.7 | ) | |||||||||||||||||||||||
Net income | $ | 28,192 | $ | 15,458 |
82.4 |
% |
|
$ | 83,172 | $ | 40,719 |
104.3 |
% |
|||||||||||||||||||||
Diluted net income per common share from continuing operations | $ | 0.32 | $ | 0.19 |
71.0 |
% |
|
$ | 0.95 | $ | 0.46 |
105.6 |
% |
|||||||||||||||||||||
Diluted net loss per common share from discontinued operations, net of tax |
$ | - | $ | (0.01 | ) | $ | - | $ | (0.01 | ) | ||||||||||||||||||||||||
Diluted net income per common share | $ | 0.32 | $ | 0.18 |
77.8 |
% |
|
$ | 0.95 | $ | 0.45 |
109.4 |
% |
|||||||||||||||||||||
Common Share Data: | ||||||||||||||||||||||||||||||||||
Diluted net income per common share | $ | 0.32 | $ | 0.18 |
77.8 |
% |
|
$ | 0.95 | $ | 0.45 |
109.4 |
% |
|||||||||||||||||||||
Book value per common share | $ | 7.87 | $ | 6.67 |
18.0 |
% |
|
|||||||||||||||||||||||||||
Tangible book value per share, net of tax (1) |
$ | 7.57 | $ | 6.35 |
19.1 |
% |
|
|||||||||||||||||||||||||||
Average shares outstanding (in thousands): | ||||||||||||||||||||||||||||||||||
Basic | 85,799 | 81,712 | 5.0 | 85,596 | 81,555 | 5.0 | ||||||||||||||||||||||||||||
Diluted | 86,769 | 82,254 | 5.5 | 86,428 | 82,000 | 5.4 | ||||||||||||||||||||||||||||
Common shares outstanding | 87,099 | 83,455 | 4.4 | |||||||||||||||||||||||||||||||
(1) See Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Summary Consolidated Financial Data (continued) | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
At or for the Three Months | For the Nine Months | |||||||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||||||
2013 | 2012 | Change % | 2013 | 2012 | Change % | |||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||
Selected Performance Ratios: | ||||||||||||||||||||||||||||||
Return on average assets (1) |
1.30 |
% |
|
0.85 |
% |
|
52.9 |
% |
|
2.03 |
% |
|
0.77 |
% |
|
163.6 |
% |
|||||||||||||
Return on tangible common equity (2) |
17.06 | 11.65 | 46.4 | 25.52 | 15.55 | 64.1 | ||||||||||||||||||||||||
Net interest margin (1) |
4.41 | 4.41 | 0.0 | 4.38 | 4.47 | (2.0 | ) | |||||||||||||||||||||||
Net interest spread | 4.25 | 4.24 | 0.2 | 4.22 | 4.29 | (1.6 | ) | |||||||||||||||||||||||
Efficiency ratio - tax equivalent basis (2) |
51.56 | 54.87 | (6.0 | ) | ||||||||||||||||||||||||||
Loan to deposit ratio | 89.57 | 86.54 | 3.5 | |||||||||||||||||||||||||||
Capital Ratios: | ||||||||||||||||||||||||||||||
Tangible equity (2) |
9.0 |
% |
|
9.1 |
% |
|
(1.0 |
)% |
|
|||||||||||||||||||||
Tangible common equity (2) |
7.4 | 7.2 | 3.2 | |||||||||||||||||||||||||||
Tier 1 common equity (2) |
8.8 | 8.1 | 8.2 | |||||||||||||||||||||||||||
Tier 1 Leverage ratio (3) |
10.0 | 9.7 | 2.6 | |||||||||||||||||||||||||||
Tier 1 Risk Based Capital (3) |
11.2 | 11.0 | 2.1 | |||||||||||||||||||||||||||
Total Risk Based Capital (3) |
12.5 | 12.3 | 1.4 | |||||||||||||||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||||||||||
Net charge-offs to average loans outstanding (1) |
(0.10 |
)% |
|
0.70 |
% |
|
(114.3 |
)% |
|
0.04 |
% |
|
0.99 |
% |
|
(96.0 |
)% |
|||||||||||||
Nonaccrual loans to gross loans | 1.20 | 2.27 | (47.1 | ) | ||||||||||||||||||||||||||
Nonaccrual loans and repossessed assets to total assets | 1.72 | 2.69 | (36.1 | ) | ||||||||||||||||||||||||||
Loans past due 90 days and still accruing to total loans | 0.08 | 0.03 | 166.7 | |||||||||||||||||||||||||||
Allowance for credit losses to loans | 1.50 | 1.83 | (18.0 | ) | ||||||||||||||||||||||||||
Allowance for credit losses to nonaccrual loans | 127.67 | 80.35 | 58.9 | |||||||||||||||||||||||||||
(1) Annualized for the three and nine month periods ended September 30, 2013 and 2012. | ||||||||||||||||||||||||||||||
(2) See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||||||
(3) Capital ratios are preliminary until Call Reports are filed. | ||||||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||
Condensed Consolidated Income Statements | ||||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||||
|
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||||
Interest income: |
|
|||||||||||||||||||||||
Loans | $ | 83,994 | $ | 69,580 | $ | 239,812 | $ | 205,682 | ||||||||||||||||
Investment securities | 8,286 | 9,034 | 24,266 | 28,008 | ||||||||||||||||||||
Federal funds sold and other | 400 | 55 | 995 | 262 | ||||||||||||||||||||
Total interest income | 92,680 | 78,669 | 265,073 | 233,952 | ||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Deposits | 4,232 | 3,974 | 11,893 | 12,904 | ||||||||||||||||||||
Borrowings | 3,429 | 2,262 | 8,885 | 6,782 | ||||||||||||||||||||
Junior subordinated debt | 460 | 487 | 1,381 | 1,458 | ||||||||||||||||||||
Total interest expense | 8,121 | 6,723 | 22,159 | 21,144 | ||||||||||||||||||||
Net interest income | 84,559 | 71,946 | 242,914 | 212,808 | ||||||||||||||||||||
Provision for credit losses | - | 8,932 | 8,920 | 35,343 | ||||||||||||||||||||
Net interest income after provision for credit losses | 84,559 | 63,014 | 233,994 | 177,465 | ||||||||||||||||||||
Non-interest income | ||||||||||||||||||||||||
Service charges | 2,425 | 2,412 | 7,408 | 7,014 | ||||||||||||||||||||
Bank owned life insurance | 1,832 | 1,116 | 3,904 | 3,359 | ||||||||||||||||||||
Amortization of affordable housing investments | (1,504 | ) | (651 | ) | (3,304 | ) | (710 | ) | ||||||||||||||||
(Losses) Gains on sales of investment securities, net | (1,679 | ) | 1,031 | (1,537 | ) | 2,502 | ||||||||||||||||||
Unrealized (losses) gains on assets/liabilities measured at fair value, net | (7 | ) | 470 | (3,768 | ) | 701 | ||||||||||||||||||
Bargain purchase gain from acquisition | - | - | 10,044 | - | ||||||||||||||||||||
Other | 1,558 | 2,604 | 4,639 | 7,397 | ||||||||||||||||||||
Total non-interest income | 2,625 | 6,982 | 17,386 | 20,263 | ||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||
Salaries and employee benefits | 28,689 | 25,500 | 83,363 | 78,159 | ||||||||||||||||||||
Occupancy | 4,901 | 4,655 | 14,500 | 14,046 | ||||||||||||||||||||
Legal, professional and directors' fees | 3,006 | 2,291 | 8,017 | 6,380 | ||||||||||||||||||||
Insurance | 1,884 | 2,121 | 6,350 | 6,323 | ||||||||||||||||||||
Data Processing | 1,872 | 1,390 | 5,912 | 3,678 | ||||||||||||||||||||
Marketing | 1,599 | 1,231 | 4,970 | 4,061 | ||||||||||||||||||||
Loan and repossessed asset expenses | 1,136 | 1,236 | 3,453 | 4,573 | ||||||||||||||||||||
Customer service | 677 | 653 | 2,037 | 1,926 | ||||||||||||||||||||
Net loss (gain) on sales and valuations of repossessed assets | 371 | 126 | (234 | ) | 3,678 | |||||||||||||||||||
Intangible amortization | 597 | 880 | 1,791 | 2,660 | ||||||||||||||||||||
Merger / restructure expense | 1,018 | 113 | 3,833 | 113 | ||||||||||||||||||||
Goodwill and intangible impairment | - | 3,435 | - | 3,435 | ||||||||||||||||||||
Other | 3,925 | 3,912 | 11,143 | 10,839 | ||||||||||||||||||||
Total non-interest expense | 49,675 | 47,543 | 145,135 | 139,871 | ||||||||||||||||||||
Income from continuing operations before income taxes | 37,509 | 22,453 | 106,245 | 57,857 | ||||||||||||||||||||
Income tax expense | 9,288 | 6,752 | 22,913 | 16,452 | ||||||||||||||||||||
Income from continuing operations | 28,221 | 15,701 | 83,332 | 41,405 | ||||||||||||||||||||
Loss from discontinued operations net of tax benefit | (29 | ) | (243 | ) | (160 | ) | (686 | ) | ||||||||||||||||
Net income | 28,192 | 15,458 | 83,172 | 40,719 | ||||||||||||||||||||
Preferred stock dividends | 353 | 352 | 1,059 | 3,440 | ||||||||||||||||||||
Net income available to common stockholders | $ | 27,839 | $ | 15,106 | $ | 82,113 | $ | 37,279 | ||||||||||||||||
Diluted net income per share | $ | 0.32 | $ | 0.18 | $ | 0.95 | $ | 0.45 | ||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Five Quarter Condensed Consolidated Income Statements | ||||||||||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||||||||||
|
Three Months Ended | |||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||||||||||||||||
Interest income: |
||||||||||||||||||||||||||||||
Loans | $ | 83,994 | $ | 81,093 | $ | 74,725 | $ | 75,303 | $ | 69,580 | ||||||||||||||||||||
Investment securities | 8,286 | 7,822 | 8,158 | 8,794 | 9,034 | |||||||||||||||||||||||||
Federal funds sold and other | 400 | 370 | 225 | 246 | 55 | |||||||||||||||||||||||||
Total interest income |
92,680 | 89,285 | 83,108 | 84,343 | 78,669 | |||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||
Deposits | 4,232 | 3,929 | 3,732 | 3,890 | 3,974 | |||||||||||||||||||||||||
Borrowings | 3,429 | 2,749 | 2,707 | 2,528 | 2,262 | |||||||||||||||||||||||||
Junior subordinated debt | 460 | 455 | 466 | 470 | 487 | |||||||||||||||||||||||||
Total interest expense | 8,121 | 7,133 | 6,905 | 6,888 | 6,723 | |||||||||||||||||||||||||
Net interest income | 84,559 | 82,152 | 76,203 | 77,455 | 71,946 | |||||||||||||||||||||||||
Provision for credit losses | - | 3,481 | 5,439 | 11,501 | 8,932 | |||||||||||||||||||||||||
Net interest income after provision for credit losses | 84,559 | 78,671 | 70,764 | 65,954 | 63,014 | |||||||||||||||||||||||||
Non-interest income | ||||||||||||||||||||||||||||||
Service charges | 2,425 | 2,449 | 2,534 | 2,438 | 2,412 | |||||||||||||||||||||||||
Bank owned life insurance | 1,832 | 1,036 | 1,036 | 1,080 | 1,116 | |||||||||||||||||||||||||
Amortization of affordable housing investments | (1,504 | ) | (900 | ) | (900 | ) | (1,069 | ) | (651 | ) | ||||||||||||||||||||
(Losses) Gains on sales of investment securities, net | (1,679 | ) | (5 | ) | 147 | 1,447 | 1,031 | |||||||||||||||||||||||
Unrealized (losses) gains on assets/liabilities measured at fair value, net | (7 | ) | (3,290 | ) | (471 | ) | (48 | ) | 470 | |||||||||||||||||||||
Bargain purchase gain from acquisition | - | 10,044 | - | 17,562 | - | |||||||||||||||||||||||||
Other | 1,558 | 1,528 | 1,553 | 3,053 | 2,604 | |||||||||||||||||||||||||
Total non-interest income | 2,625 | 10,862 | 3,899 | 24,463 | 6,982 | |||||||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||||||
Salaries and employee benefits | 28,689 | 28,100 | 26,574 | 26,885 | 25,500 | |||||||||||||||||||||||||
Occupancy | 4,901 | 4,753 | 4,846 | 4,769 | 4,655 | |||||||||||||||||||||||||
Legal, professional and directors' fees | 3,006 | 2,227 | 2,784 | 1,849 | 2,291 | |||||||||||||||||||||||||
Insurance | 1,884 | 2,096 | 2,370 | 2,188 | 2,121 | |||||||||||||||||||||||||
Data Processing | 1,872 | 2,175 | 1,865 | 2,071 | 1,390 | |||||||||||||||||||||||||
Marketing | 1,599 | 1,607 | 1,764 | 1,546 | 1,231 | |||||||||||||||||||||||||
Loan and repossessed asset expenses | 1,136 | 721 | 1,596 | 2,102 | 1,236 | |||||||||||||||||||||||||
Customer service | 677 | 717 | 643 | 678 | 653 | |||||||||||||||||||||||||
Net loss (gain) on sales and valuations of repossessed assets | 371 | (1,124 | ) | 519 | 529 | 126 | ||||||||||||||||||||||||
Intangible amortization | 597 | 597 | 597 | 596 | 880 | |||||||||||||||||||||||||
Merger / restructure expense | 1,018 | 2,620 | 195 | 2,706 | 113 | |||||||||||||||||||||||||
Goodwill and intangible impairment | - | - | - | - | 3,435 | |||||||||||||||||||||||||
Other | 3,925 | 4,042 | 3,176 | 3,070 | 3,912 | |||||||||||||||||||||||||
Total non-interest expense | 49,675 | 48,531 | 46,929 | 48,989 | 47,543 | |||||||||||||||||||||||||
Income from continuing operations before income taxes | 37,509 | 41,002 | 27,734 | 41,428 | 22,453 | |||||||||||||||||||||||||
Income tax expense | 9,288 | 6,817 | 6,808 | 7,509 | 6,752 | |||||||||||||||||||||||||
Income from continuing operations | $ | 28,221 | $ | 34,185 | $ | 20,926 | $ | 33,919 | $ | 15,701 | ||||||||||||||||||||
(Loss) Income from discontinued operations, net of tax | (29 | ) | (169 | ) | 38 | (1,804 | ) | (243 | ) | |||||||||||||||||||||
Net income | $ | 28,192 | $ | 34,016 | $ | 20,964 | $ | 32,115 | $ | 15,458 | ||||||||||||||||||||
Preferred stock dividends | 353 | 353 | 353 | 353 | 352 | |||||||||||||||||||||||||
Net Income available to common stockholders | $ | 27,839 | $ | 33,663 | $ | 20,611 | $ | 31,762 | $ | 15,106 | ||||||||||||||||||||
Diluted net income per share | $ | 0.32 | $ | 0.39 | $ | 0.24 | $ | 0.37 | $ | 0.18 | ||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Five Quarter Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||
Assets: |
|
|||||||||||||||||||||||||||||
Cash and due from banks | $ | 380.9 | $ | 248.9 | $ | 422.3 | $ | 204.6 | $ | 168.1 | ||||||||||||||||||||
Securities purchased under agreement to resell | 128.1 | 134.0 | 134.0 | - | 139.8 | |||||||||||||||||||||||||
Cash and cash equivalents | 509.0 | 382.9 | 556.3 | 204.6 |
|
307.9 | ||||||||||||||||||||||||
Securities and money market investments | 1,370.8 | 1,313.1 | 1,302.4 | 1,236.6 | 1,338.9 | |||||||||||||||||||||||||
Loans held for sale | 25.4 | 27.6 | 27.9 | 31.1 | - | |||||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||||||
Commercial | 2,234.9 | 2,174.1 | 2,084.9 | 1,947.8 | 1,756.0 | |||||||||||||||||||||||||
Commercial real estate - non-owner occupied | 1,864.3 | 1,839.7 | 1,538.4 | 1,505.6 | 1,407.1 | |||||||||||||||||||||||||
Commercial real estate - owner occupied | 1,551.2 | 1,550.0 | 1,414.3 | 1,396.8 | 1,331.3 | |||||||||||||||||||||||||
Construction and land development | 459.8 | 416.7 | 381.1 | 394.3 | 379.8 | |||||||||||||||||||||||||
Residential real estate | 359.0 | 381.7 | 388.7 | 407.9 | 408.4 | |||||||||||||||||||||||||
Consumer | 29.8 | 28.5 | 26.0 | 31.8 | 56.6 | |||||||||||||||||||||||||
Deferred fees, net | (8.1 | ) | (6.8 | ) | (6.0 | ) | (6.0 | ) | (6.3 | ) | ||||||||||||||||||||
Gross loans and deferred fees, net | 6,490.9 | 6,383.9 | 5,827.4 | 5,678.2 | 5,332.9 | |||||||||||||||||||||||||
Allowance for credit losses | (97.9 | ) | (96.3 | ) | (95.5 | ) | (95.4 | ) | (97.4 | ) | ||||||||||||||||||||
Loans, net | 6,393.0 | 6,287.6 | 5,731.9 | 5,582.8 | 5,235.5 | |||||||||||||||||||||||||
Premises and equipment, net | 105.9 | 106.1 | 107.1 | 107.9 | 106.9 | |||||||||||||||||||||||||
Other repossessed assets | 76.5 | 76.5 | 77.9 | 77.2 | 78.2 | |||||||||||||||||||||||||
Bank owned life insurance | 139.7 | 140.4 | 139.4 | 138.3 | 137.3 | |||||||||||||||||||||||||
Goodwill and other intangibles | 27.9 | 28.5 | 29.2 | 29.8 | 29.0 | |||||||||||||||||||||||||
Other assets | 273.2 | 231.0 | 202.0 | 214.3 | 169.9 | |||||||||||||||||||||||||
Total assets | $ | 8,921.4 | $ | 8,593.7 | $ | 8,174.1 | $ | 7,622.6 | $ | 7,403.6 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 1,972.5 | $ | 1,919.6 | $ | 1,930.4 | $ | 1,933.2 | $ | 1,840.8 | ||||||||||||||||||||
Interest bearing | ||||||||||||||||||||||||||||||
Demand | 673.7 | 631.3 | 619.7 | 582.3 | 514.7 | |||||||||||||||||||||||||
Savings and money market | 3,050.0 | 2,945.1 | 2,826.7 | 2,573.5 | 2,541.2 | |||||||||||||||||||||||||
Time certificates | 1,579.1 | 1,505.3 | 1,358.1 | 1,366.2 | 1,265.3 | |||||||||||||||||||||||||
Total deposits | 7,275.3 | 7,001.3 | 6,734.9 | 6,455.2 | 6,162.0 | |||||||||||||||||||||||||
Customer repurchase agreements | 55.5 | 51.9 | 64.7 | 79.0 | 73.1 | |||||||||||||||||||||||||
Total customer funds | 7,330.8 | 7,053.2 | 6,799.6 | 6,534.2 | 6,235.1 | |||||||||||||||||||||||||
Securities sold short | 126.6 | 129.5 | 132.6 | - | 138.3 | |||||||||||||||||||||||||
Borrowings | 394.1 | 418.6 | 293.8 | 193.7 | 223.6 | |||||||||||||||||||||||||
Junior subordinated debt | 39.4 | 39.9 | 36.7 | 36.2 | 36.2 | |||||||||||||||||||||||||
Accrued interest payable and other liabilities | 204.2 | 153.0 | 130.1 | 98.9 | 72.4 | |||||||||||||||||||||||||
Total liabilities | 8,095.1 | 7,794.2 | 7,392.8 | 6,863.0 | 6,705.6 | |||||||||||||||||||||||||
Stockholders' Equity | ||||||||||||||||||||||||||||||
Common stock and additional paid-in capital | 792.2 | 789.5 | 786.9 | 784.9 | 751.1 | |||||||||||||||||||||||||
Preferred Stock | 141.0 | 141.0 | 141.0 | 141.0 | 141.0 | |||||||||||||||||||||||||
Accumulated deficit | (92.4 | ) | (120.2 | ) | (153.8 | ) | (174.5 | ) | (206.2 | ) | ||||||||||||||||||||
Accumulated other comprehensive (loss) income | (14.5 | ) | (10.8 | ) | 7.2 | 8.2 | 12.1 | |||||||||||||||||||||||
Total stockholders' equity | 826.3 | 799.5 | 781.3 | 759.6 | 698.0 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,921.4 | $ | 8,593.7 | $ | 8,174.1 | $ | 7,622.6 | $ | 7,403.6 | ||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Changes in the Allowance For Credit Losses | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 96,323 | $ | 95,494 | $ | 95,427 | $ | 97,410 | $ | 97,512 | ||||||||||||||||||||
Provision for credit losses | - | 3,481 | 5,439 | 11,501 | 8,932 | |||||||||||||||||||||||||
Recoveries of loans previously charged-off: | ||||||||||||||||||||||||||||||
Commercial and industrial | 2,242 | 1,757 | 441 | 372 | 501 | |||||||||||||||||||||||||
Commercial real estate - non-owner occupied | 273 | 154 | 440 | 288 | 27 | |||||||||||||||||||||||||
Commercial real estate - owner occupied | 149 | 479 | 502 | 109 | 606 | |||||||||||||||||||||||||
Construction and land development | 966 | 120 | 701 | 2,033 | 567 | |||||||||||||||||||||||||
Residential real estate | 430 | 549 | 569 | 313 | 153 | |||||||||||||||||||||||||
Consumer | 15 | 11 | 14 | 63 | 38 | |||||||||||||||||||||||||
Total recoveries | 4,075 | 3,070 | 2,667 | 3,178 | 1,892 | |||||||||||||||||||||||||
Loans charged-off: | ||||||||||||||||||||||||||||||
Commercial and industrial | 544 | 1,065 | 1,770 | 4,654 | 4,100 | |||||||||||||||||||||||||
Commercial real estate - non-owner occupied | 466 | 1,000 | 1,908 | 2,673 | 998 | |||||||||||||||||||||||||
Commercial real estate - owner occupied | 399 | 1,391 | 979 | 4,470 | 472 | |||||||||||||||||||||||||
Construction and land development | - | 238 | 614 | 405 | 2,315 | |||||||||||||||||||||||||
Residential real estate | 1,138 | 2,010 | 2,493 | 1,307 | 2,242 | |||||||||||||||||||||||||
Consumer | - | 18 | 275 | 3,153 | 799 | |||||||||||||||||||||||||
Total loans charged-off |
2,547 | 5,722 | 8,039 | 16,662 | 10,926 | |||||||||||||||||||||||||
Net loan (recoveries) charge-offs | (1,528 | ) | 2,652 | 5,372 | 13,484 | 9,034 | ||||||||||||||||||||||||
Balance, end of period | $ | 97,851 | $ | 96,323 | $ | 95,494 | $ | 95,427 | $ | 97,410 | ||||||||||||||||||||
Net charge-offs (recoveries) to average loans outstanding - annualized |
(0.10 |
)% |
|
0.17 | % | 0.38 | % | 0.99 | % | 0.70 | % | |||||||||||||||||||
Allowance for credit losses to gross loans | 1.50 | 1.50 | 1.63 | 1.67 | 1.83 | |||||||||||||||||||||||||
Nonaccrual loans | $ | 76,641 | $ | 82,899 | $ | 93,748 | $ | 104,716 | $ | 121,238 | ||||||||||||||||||||
Repossessed assets | 76,475 | 76,499 | 77,921 | 77,247 | 78,234 | |||||||||||||||||||||||||
Loans past due 90 days, still accruing | 5,456 | 3,893 | 1,640 | 1,388 | 1,710 | |||||||||||||||||||||||||
Loans past due 30 to 89 days, still accruing | 8,689 | 7,341 | 14,795 | 16,565 | 10,181 | |||||||||||||||||||||||||
Classified loans on accrual | 144,041 | 140,192 | 97,351 | 112,637 | 116,841 | |||||||||||||||||||||||||
Special mention loans | 137,247 | 162,482 | 125,660 | 103,550 | 97,681 | |||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | |||||||||||||||||||||||||||
Analysis of Average Balances, Yields and Rates | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
Average Balance |
Interest |
Average Yield/ Cost |
Average Balance |
Interest |
Average Yield/ Cost |
||||||||||||||||||||||
|
($ in millions) | ($ in thousands) | ($ in millions) | ($ in thousands) | |||||||||||||||||||||||
Interest earning assets |
|||||||||||||||||||||||||||
Loans (1) | $ | 6,306.4 | $ | 83,994 | 5.44 | % | $ | 5,191.2 | $ | 69,580 | 5.42 | % | |||||||||||||||
Investment securities (1) | 1,303.4 | 8,286 | 3.01 | % | 1,372.4 | 9,034 | 3.17 | % | |||||||||||||||||||
Federal funds sold and other | 364.6 | 400 | 0.44 | % | 195.4 | 55 | 0.11 | % | |||||||||||||||||||
Total interest earning assets | 7,974.4 | 92,680 | 4.81 | % | 6,759.0 | 78,669 | 4.81 | % | |||||||||||||||||||
Non-interest earning assets | |||||||||||||||||||||||||||
Cash and due from banks | 145.0 | 120.1 | |||||||||||||||||||||||||
Allowance for credit losses | (98.2 | ) | (98.2 | ) | |||||||||||||||||||||||
Bank owned life insurance | 140.6 | 136.5 | |||||||||||||||||||||||||
Other assets | 466.9 | 356.6 | |||||||||||||||||||||||||
Total assets | $ | 8,628.6 | $ | 7,274.0 | |||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 641.7 | $ | 376 | 0.23 | % | $ | 510.5 | $ | 296 | 0.23 | % | |||||||||||||||
Savings and money market | 2,828.1 | 2,172 | 0.31 | % | 2,414.2 | 1,990 | 0.33 | % | |||||||||||||||||||
Time certificates of deposit | 1,675.5 | 1,685 | 0.40 | % | 1,286.5 | 1,688 | 0.52 | % | |||||||||||||||||||
Total interest-bearing deposits | 5,145.3 | 4,232 | 0.33 | % | 4,211.2 | 3,974 | 0.38 | % | |||||||||||||||||||
Borrowings | 574.8 | 3,429 | 2.39 | % | 455.6 | 2,262 | 1.99 | % | |||||||||||||||||||
Junior subordinated debt | 39.9 | 460 | 4.61 | % | 36.7 | 487 | 5.31 | % | |||||||||||||||||||
Total interest-bearing liabilities | 5,760.0 | 8,121 | 0.56 | % | 4,703.5 | 6,723 | 0.57 | % | |||||||||||||||||||
Noninterest-bearing liabilities | |||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 1,931.1 | 1,813.0 | |||||||||||||||||||||||||
Other liabilities | 114.7 | 70.7 | |||||||||||||||||||||||||
Stockholders’ equity | 822.8 | 686.8 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,628.6 | $ | 7,274.0 | |||||||||||||||||||||||
Net interest income and margin | $ | 84,559 | 4.41 | % | $ | 71,946 | 4.41 | % | |||||||||||||||||||
Net interest spread | 4.25 | % | 4.24 | % | |||||||||||||||||||||||
(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $3,272 and $2,655 for the third quarter ended 2013 and 2012, respectively. |
|||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | |||||||||||||||||||||||||||
Analysis of Average Balances, Yields and Rates | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
Average Balance |
Interest |
Average Yield/ Cost |
Average Balance |
Interest |
Average Yield/ Cost |
||||||||||||||||||||||
|
($ in millions) | ($ in thousands) | ($ in millions) | ($ in thousands) | |||||||||||||||||||||||
Interest earning Assets |
|||||||||||||||||||||||||||
Loans (1) | $ | 6,008.4 | $ | 239,812 | 5.42 | % | $ | 4,996.8 | $ | 205,682 | 5.53 | % | |||||||||||||||
Investment securities (1) | 1,294.3 | 24,266 | 3.05 | % | 1,404.2 | 28,008 | 3.15 | % | |||||||||||||||||||
Federal funds sold & other | 392.2 | 995 | 0.34 | % | 153.5 | 262 | 0.23 | % | |||||||||||||||||||
Total interest earnings assets | 7,694.9 | 265,073 | 4.76 | % | 6,554.5 | 233,952 | 4.90 | % | |||||||||||||||||||
Non-interest earning assets | |||||||||||||||||||||||||||
Cash and due from banks | 130.3 | 115.7 | |||||||||||||||||||||||||
Allowance for credit losses | (97.2 | ) | (98.8 | ) | |||||||||||||||||||||||
Bank owned life insurance | 139.7 | 135.4 | |||||||||||||||||||||||||
Other assets | 440.6 | 353.7 | |||||||||||||||||||||||||
Total assets | $ | 8,308.3 | $ | 7,060.5 | |||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||
Interest bearing transaction accounts | $ | 625.8 | $ | 1,047 | 0.22 | % | $ | 511.0 | $ | 920 | 0.24 | % | |||||||||||||||
Savings and money market | 2,740.0 | 6,090 | 0.30 | % | 2,314.9 | 6,114 | 0.35 | % | |||||||||||||||||||
Time certificates of deposits | 1,570.5 | 4,756 | 0.40 | % | 1,343.7 | 5,870 | 0.58 | % | |||||||||||||||||||
Total interest-bearing deposits | 4,936.3 | 11,893 | 0.32 | % | 4,169.6 | 12,904 | 0.42 | % | |||||||||||||||||||
Borrowings | 526.0 | 8,885 | 2.25 | % | 392.3 | 6,782 | 2.31 | % | |||||||||||||||||||
Junior subordinated debt | 37.6 | 1,381 | 4.90 | % | 37.0 | 1,458 | 5.26 | % | |||||||||||||||||||
Total interest-bearing liabilities | $ | 5,499.9 | $ | 22,159 | 0.54 | % | $ | 4,598.9 | $ | 21,144 | 0.61 | % | |||||||||||||||
Noninterest-bearing liabilities | |||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 1,895.1 | 1,734.6 | |||||||||||||||||||||||||
Other liabilities | 110.8 | 56.1 | |||||||||||||||||||||||||
Stockholders’ equity | 802.5 | 670.9 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,308.3 | $ | 7,060.5 | |||||||||||||||||||||||
Net interest income and margin | $ | 242,914 | 4.38 | % | $ | 212,808 | 4.47 | % | |||||||||||||||||||
Net interest spread | 4.22 | % | 4.29 | % | |||||||||||||||||||||||
(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $9,583 and $6,726 for the nine months September 30, 2013 and 2012, respectively. |
|||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | |||||||||||||||||||||||||||||||
Operating Segment Results | |||||||||||||||||||||||||||||||
Unaudited |
|||||||||||||||||||||||||||||||
|
Inter- | ||||||||||||||||||||||||||||||
segment | Consoli- | ||||||||||||||||||||||||||||||
Western | Bank | Torrey | elimi- | dated | |||||||||||||||||||||||||||
Alliance Bank | of Nevada | Pines Bank* | Other | nations | Company | ||||||||||||||||||||||||||
(dollars in millions) |
|||||||||||||||||||||||||||||||
At September 30, 2013 |
|
||||||||||||||||||||||||||||||
Assets | $ | 3,346.7 | $ | 3,288.1 | $ | 2,076.2 | $ | 1,127.8 | $ | (917.4 | ) | $ | 8,921.4 | ||||||||||||||||||
Held for sale loans | - | - | 25.4 | - | - | 25.4 | |||||||||||||||||||||||||
Gross loans and deferred fees, net | 2,589.2 | 2,387.1 | 1,498.7 | 58.9 | (43.0 | ) | 6,490.9 | ||||||||||||||||||||||||
Less: Allowance for credit losses | (28.0 | ) | (51.0 | ) | (18.3 | ) | (0.6 | ) | - | (97.9 | ) | ||||||||||||||||||||
Loans, net | 2,561.2 | 2,336.1 | 1,480.4 | 58.3 | (43.0 | ) | 6,393.0 | ||||||||||||||||||||||||
Goodwill and intangible assets | 2.8 | 25.1 | - | - | - | 27.9 | |||||||||||||||||||||||||
Deposits | 2,832.0 | 2,613.5 | 1,844.7 | - | (14.9 | ) | 7,275.3 | ||||||||||||||||||||||||
Borrowings | 81.4 | 203.0 | 3.2 | 106.5 | - | 394.1 | |||||||||||||||||||||||||
Stockholders' equity | 291.5 | 373.7 | 171.8 | 844.7 | (855.4 | ) | 826.3 | ||||||||||||||||||||||||
No. of branches | 18 | 12 | 12 | - | - | 42 | |||||||||||||||||||||||||
No. of FTE | 294 | 392 | 228 | 109 | - | 1,023 | |||||||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013: |
|
||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 33,755 | $ | 31,888 | $ | 21,055 | $ | (2,139 | ) | $ | - | $ | 84,559 | ||||||||||||||||||
Provision for (recovery of) credit losses | 6,277 | (6,918 | ) | 2,387 | (1,746 | ) | - | - | |||||||||||||||||||||||
Net interest income (expense) after | |||||||||||||||||||||||||||||||
provision for credit losses | 27,478 | 38,806 | 18,668 | (393 | ) | - | 84,559 | ||||||||||||||||||||||||
Non-interest income | 1,816 | 2,314 | 108 | 2,914 | (4,527 | ) | 2,625 | ||||||||||||||||||||||||
Non-interest expense | (15,520 | ) | (18,799 | ) | (11,949 | ) | (7,934 | ) | 4,527 | (49,675 | ) | ||||||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||||||||
operations before income taxes | 13,774 | 22,321 | 6,827 | (5,413 | ) | - | 37,509 | ||||||||||||||||||||||||
Income tax expense (benefit) | 3,977 | 6,027 | 2,230 | (2,946 | ) | - | 9,288 | ||||||||||||||||||||||||
Income (loss) from continuing operations | 9,797 | 16,294 | 4,597 | (2,467 | ) | - | 28,221 | ||||||||||||||||||||||||
Loss from discontinued operations, net | - | - | - | (29 | ) | - | (29 | ) | |||||||||||||||||||||||
Net income (loss) | $ | 9,797 | $ | 16,294 | $ | 4,597 | $ | (2,496 | ) | $ | - | $ | 28,192 | ||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013: |
|
||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 92,920 | $ | 91,821 | $ | 62,435 | $ | (4,262 | ) | $ | - | $ | 242,914 | ||||||||||||||||||
Provision for (recovery of) credit losses | 9,921 | (5,514 | ) | 3,219 | 1,294 | - | 8,920 | ||||||||||||||||||||||||
Net interest income (expense) after | |||||||||||||||||||||||||||||||
provision for credit losses | 82,999 | 97,335 | 59,216 | (5,556 | ) | - | 233,994 | ||||||||||||||||||||||||
Non-interest income | 14,520 | 9,383 | 1,312 | 4,325 | (12,154 | ) | 17,386 | ||||||||||||||||||||||||
Non-interest expense | (45,688 | ) | (52,724 | ) | (35,876 | ) | (23,001 | ) | 12,154 | (145,135 | ) | ||||||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||||||||
operations before income taxes | 51,831 | 53,994 | 24,652 | (24,232 | ) | - | 106,245 | ||||||||||||||||||||||||
Income tax expense (benefit) | 13,066 | 14,292 | 7,898 | (12,343 | ) | - | 22,913 | ||||||||||||||||||||||||
Income (loss) from continuing operations | 38,765 | 39,702 | 16,754 | (11,889 | ) | - | 83,332 | ||||||||||||||||||||||||
Loss from discontinued operations, net | - | - | - | (160 | ) | - | (160 | ) | |||||||||||||||||||||||
Net income (loss) | $ | 38,765 | $ | 39,702 | $ | 16,754 | $ | (12,049 | ) | $ | - | $ | 83,172 | ||||||||||||||||||
* Excludes discontinued operations | |||||||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | |||||||||||||||||||||||||||||||
Operating Segment Results | |||||||||||||||||||||||||||||||
Unaudited |
|||||||||||||||||||||||||||||||
|
Inter- | ||||||||||||||||||||||||||||||
segment | Consoli- | ||||||||||||||||||||||||||||||
Western | Bank | Torrey | elimi- | dated | |||||||||||||||||||||||||||
Alliance Bank | of Nevada | Pines Bank* | Other | nations | Company | ||||||||||||||||||||||||||
(dollars in millions) |
|||||||||||||||||||||||||||||||
At September 30, 2012 |
|
||||||||||||||||||||||||||||||
Assets | $ | 2,429.8 | $ | 2,918.0 | $ | 1,888.7 | $ | 961.3 | $ | (794.2 | ) | $ | 7,403.6 | ||||||||||||||||||
Gross loans and deferred fees, net | 1,871.4 | 2,061.0 | 1,430.6 | 12.8 | (42.9 | ) | 5,332.9 | ||||||||||||||||||||||||
Less: Allowance for credit losses | (20.4 | ) | (59.5 | ) | (17.5 | ) | - | - | (97.4 | ) | |||||||||||||||||||||
Loans, net | 1,851.0 | 2,001.5 | 1,413.1 | 12.8 | (42.9 | ) | 5,235.5 | ||||||||||||||||||||||||
Goodwill and intangible assets | - | 23.2 | - | - | - | 23.2 | |||||||||||||||||||||||||
Deposits | 2,150.5 | 2,408.5 | 1,613.8 | - | (10.8 | ) | 6,162.0 | ||||||||||||||||||||||||
Borrowings | - | 110.0 | 40.0 | - | 150.0 | ||||||||||||||||||||||||||
Stockholders' equity | 217.3 | 339.1 | 168.4 | 702.3 | (729.1 | ) | 698.0 | ||||||||||||||||||||||||
No. of branches | 16 | 11 | 12 | - | - | 39 | |||||||||||||||||||||||||
No. of FTE | 241 | 388 | 234 | 101 | - | 964 | |||||||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012: |
|
||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 24,449 | $ | 27,717 | $ | 21,795 | $ | (2,015 | ) | $ | - | $ | 71,946 | ||||||||||||||||||
Provision for credit losses | 1,112 | 6,618 | 1,202 | - | - | 8,932 | |||||||||||||||||||||||||
Net interest income (expense) after | |||||||||||||||||||||||||||||||
provision for credit losses | 23,337 | 21,099 | 20,593 | (2,015 | ) | - | 63,014 | ||||||||||||||||||||||||
Non-interest income | 1,173 | 3,259 | 855 | 4,647 | (2,952 | ) | 6,982 | ||||||||||||||||||||||||
Non-interest expense | (11,980 | ) | (16,467 | ) | (11,082 | ) | (10,966 | ) | 2,952 | (47,543 | ) | ||||||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||||||||
operations before income taxes | 12,530 | 7,891 | 10,366 | (8,334 | ) | - | 22,453 | ||||||||||||||||||||||||
Income tax expense (benefit) | 3,768 | 2,055 | 3,958 | (3,029 | ) | - | 6,752 | ||||||||||||||||||||||||
Income (loss) from continuing operations | 8,762 | 5,836 | 6,408 | (5,305 | ) | - | 15,701 | ||||||||||||||||||||||||
Loss from discontinued operations, net | - | - | - | (243 | ) | - | (243 | ) | |||||||||||||||||||||||
Net income (loss) | $ | 8,762 | $ | 5,836 | $ | 6,408 | $ | (5,548 | ) | $ | - | $ | 15,458 | ||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2012: |
|
||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 71,564 | $ | 83,054 | $ | 64,406 | $ | (6,216 | ) | $ | - | $ | 212,808 | ||||||||||||||||||
Provision for credit losses | 1,215 | 28,846 | 5,282 | - | - | 35,343 | |||||||||||||||||||||||||
Net interest income (expense) after | |||||||||||||||||||||||||||||||
provision for credit losses | 70,349 | 54,208 | 59,124 | (6,216 | ) | - | 177,465 | ||||||||||||||||||||||||
Non-interest income | 5,021 | 11,132 | 3,111 | 8,539 | (7,540 | ) | 20,263 | ||||||||||||||||||||||||
Noninterest expense | (35,986 | ) | (53,437 | ) | (33,492 | ) | (24,496 | ) | 7,540 | (139,871 | ) | ||||||||||||||||||||
Income (loss) from continuing | |||||||||||||||||||||||||||||||
operations before income taxes | 39,384 | 11,903 | 28,743 | (22,173 | ) | - | 57,857 | ||||||||||||||||||||||||
Income tax expense (benefit) | 13,031 | 1,341 | 11,255 | (9,175 | ) | - | 16,452 | ||||||||||||||||||||||||
Income (loss) from continuing operations | 26,353 | 10,562 | 17,488 | (12,998 | ) | - | 41,405 | ||||||||||||||||||||||||
Loss from discontinued operations, net | - | - | - | (686 | ) | - | (686 | ) | |||||||||||||||||||||||
Net income (loss) | $ | 26,353 | $ | 10,562 | $ | 17,488 | $ | (13,684 | ) | $ | - | $ | 40,719 | ||||||||||||||||||
* Excludes discontinued operations | |||||||||||||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures (Unaudited) | ||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||
Total stockholders' equity | $ | 826,287 | $ | 799,524 | $ | 781,294 | $ | 759,616 | $ | 698,011 | ||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Goodwill and intangible assets | 27,970 | 28,568 | 29,166 | 29,763 | 28,989 | |||||||||||||||||||||||||
Total tangible stockholders' equity | 798,317 | 770,956 | 752,128 | 729,853 | 669,022 | |||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Preferred stock | 141,000 | 141,000 | 141,000 | 141,000 | 141,000 | |||||||||||||||||||||||||
Total tangible common equity | 657,317 | 629,956 | 611,128 | 588,853 | 528,022 | |||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||
Deferred tax | 1,661 | 1,870 | 2,080 | 2,289 | 2,033 | |||||||||||||||||||||||||
Total tangible common equity, net of tax | $ | 658,978 | $ | 631,826 | $ | 613,208 | $ | 591,142 | $ | 530,055 | ||||||||||||||||||||
Total assets | $ | 8,921,429 | $ | 8,593,684 | $ | 8,174,103 | $ | 7,622,637 | $ | 7,403,603 | ||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Goodwill and intangible assets | 27,970 | 28,568 | 29,166 | 29,763 | 28,989 | |||||||||||||||||||||||||
Tangible assets | 8,893,459 | 8,565,116 | 8,144,937 | 7,592,874 | 7,374,614 | |||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||
Deferred tax | 1,661 | 1,870 | 2,080 | 2,289 | 2,033 | |||||||||||||||||||||||||
Total tangible assets, net of tax | $ | 8,895,120 | $ | 8,566,986 | $ | 8,147,017 | $ | 7,595,163 | $ | 7,376,647 | ||||||||||||||||||||
Tangible equity ratio (1) | 9.0 | % | 9.0 | % | 9.2 | % | 9.6 | % | 9.1 | % | ||||||||||||||||||||
Tangible common equity ratio (2) | 7.4 | % | 7.4 | % | 7.5 | % | 7.8 | % | 7.2 | % | ||||||||||||||||||||
Common shares outstanding | 87,099 | 86,997 | 87,079 | 86,465 | 83,455 | |||||||||||||||||||||||||
Tangible book value per share, net of tax (3) | $ | 7.57 | $ | 7.26 | $ | 7.04 | $ | 6.84 | $ | 6.35 | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Total non-interest income | $ | 2,625 | $ | 10,862 | $ | 3,899 | $ | 24,463 | $ | 6,982 | ||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Unrealized (losses) gains on assets/liabilities measured at fair value, net |
(7 | ) | (3,290 | ) | (471 | ) | (48 | ) | 470 | |||||||||||||||||||||
Gain on sale of subsidiary/non-controlling interest | - | - | - | 116 | 776 | |||||||||||||||||||||||||
Bargain purchase gain from acquisition | - | 10,044 | - | 17,562 | - | |||||||||||||||||||||||||
Legal settlements | - | - | 38 | 879 | - | |||||||||||||||||||||||||
Mutual fund gains | - | - | - | 483 | - | |||||||||||||||||||||||||
Amortization of affordable housing investments | (1,504 | ) | (900 | ) | (900 | ) | (1,069 | ) | (651 | ) | ||||||||||||||||||||
(Losses) Gains on sales of investment securities, net | (1,679 | ) | (5 | ) | 147 | 1,447 | 1,031 | |||||||||||||||||||||||
Total operating non-interest income | 5,815 | 5,013 | 5,085 | 5,093 | 5,356 | |||||||||||||||||||||||||
Add: net interest income | 84,559 | 82,152 | 76,203 | 77,455 | 71,946 | |||||||||||||||||||||||||
Net operating revenue (4) | $ | 90,374 | $ | 87,165 | $ | 81,288 | $ | 82,548 | $ | 77,302 | ||||||||||||||||||||
Total non-interest expense | $ | 49,675 | $ | 48,531 | $ | 46,929 | $ | 48,989 | $ | 47,543 | ||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Net loss (gain) on sales and valuations of repossessed assets | 371 | (1,124 | ) | 519 | 529 | 126 | ||||||||||||||||||||||||
Merger / restructure expense | 1,018 | 2,620 | 195 | 2,706 | 113 | |||||||||||||||||||||||||
Goodwill impairment | - | - | - | - | 3,435 | |||||||||||||||||||||||||
Total operating non-interest expense (4) | $ | 48,286 | $ | 47,035 | $ | 46,215 | $ | 45,754 | $ | 43,869 | ||||||||||||||||||||
Net operating revenue | $ | 90,374 | $ | 87,165 | $ | 81,288 | $ | 82,548 | $ | 77,302 | ||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Operating non-interest expense | 48,286 | 47,035 | 46,215 | 45,754 | 43,869 | |||||||||||||||||||||||||
Pre-tax, pre-provision operating earnings (5) | $ | 42,088 | $ | 40,130 | $ | 35,073 | $ | 36,794 | $ | 33,433 | ||||||||||||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures (Unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Total operating non-interest expense | $ | 48,286 | $ | 47,035 | $ | 46,215 | $ | 45,754 | $ | 43,869 | ||||||||||||||||||||
Divided by: | ||||||||||||||||||||||||||||||
Total net interest income | $ | 84,559 | $ | 82,152 | $ | 76,203 | $ | 77,455 | $ | 71,946 | ||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||
Tax equivalent interest adjustment | 3,272 | 2,929 | 3,382 | 3,012 | 2,655 | |||||||||||||||||||||||||
Operating non-interest income | 5,815 | 5,013 | 5,085 | 5,093 | 5,356 | |||||||||||||||||||||||||
$ | 93,646 | $ | 90,094 | $ | 84,670 | $ | 85,560 | $ | 79,957 | |||||||||||||||||||||
Efficiency ratio - tax equivalent basis (6) | 51.6 | % | 52.2 | % | 54.6 | % | 53.5 | % | 54.9 | % | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Stockholders' equity | $ | 826,287 | $ | 698,011 | ||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Accumulated other comprehensive (loss) income | (14,504 | ) | 12,109 | |||||||||||||||||||||||||||
Non-qualifying goodwill and intangibles | 26,373 | 26,867 | ||||||||||||||||||||||||||||
Other non-qualifying assets | - | 25 | ||||||||||||||||||||||||||||
Disallowed unrealized losses on equity securities | 5,112 | - | ||||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||
Qualifying trust preferred securities | 46,918 | 44,819 | ||||||||||||||||||||||||||||
Tier 1 capital (regulatory) (7) (10) | 856,224 | 703,829 | ||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||
Qualifying non-controlling interests | - | 75 | ||||||||||||||||||||||||||||
Qualifying trust preferred securities | 46,918 | 44,819 | ||||||||||||||||||||||||||||
Preferred stock | 141,000 | 141,000 | ||||||||||||||||||||||||||||
Estimated Tier 1 common equity (8) (10) | $ | 668,306 | $ | 517,935 | ||||||||||||||||||||||||||
Divided by: | ||||||||||||||||||||||||||||||
Estimated risk-weighted assets (regulatory) (8) (10) |
$ | 7,626,352 | $ | 6,394,105 | ||||||||||||||||||||||||||
Tier 1 common equity ratio (8) (10) | 8.8 | % | 8.1 | % | ||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Classified assets | $ | 296,580 | $ | 316,253 | ||||||||||||||||||||||||||
Divide: | ||||||||||||||||||||||||||||||
Tier 1 capital (regulatory) (7) (10) | 856,224 | 703,829 | ||||||||||||||||||||||||||||
Plus: Allowance for credit losses | 95,385 | 97,410 | ||||||||||||||||||||||||||||
Total Tier 1 capital plus allowance for credit losses | $ | 951,609 | $ | 801,239 | ||||||||||||||||||||||||||
Classified assets to Tier 1 capital plus allowance (9) (10) | 31 | % | 39 | % | ||||||||||||||||||||||||||
(1) |
We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength. |
||||
(2) |
We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength. |
||||
(3) |
We believe this non-GAAP ratio improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. |
||||
(4) |
We believe these non-GAAP measurements provide a useful indication of the cash generating capacity of the Company. |
||||
(5) |
We believe this non-GAAP measurement is a key indicator of the earnings power of the Company. |
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(6) |
We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company. |
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(7) |
Under the guidelines of the Federal Reserve and the FDIC in effect, Tier 1 capital consisted of common stock, retained earnings, non-cumulative perpetual preferred stock, trust preferred securities up to a certain limit, and minority interests in certain subsidiaries, less most other intangible assets. |
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(8) |
Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is divided by the risk-weighted assets to determine the Tier 1 common equity ratio. We believe this non-GAAP ratio with which to analyze and evaluate financial condition and capital strength. |
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(9) |
We believe this non-GAAP ratio provides a critical regulatory metric in which to analyze asset quality. |
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(10) |
Current quarter is preliminary until Call Reports are filed. |
CONTACT:
Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
Exhibit 99.2
(NYSE: WAL) October 18, 2013 Western Alliance Bancorporation 3rd Quarter Earnings Call
Q3 2013 Financial Performance Continued Income Growth –Net income of $28.2 million, compared to $34.0 million for the second quarter 2013 (which included the $10.0 million bargain purchase gain from the acquisition of Centennial Bank in addition to other non-recurring items) and $15.5 million for the third quarter 2012 –Earnings per share of $0.32, compared to $0.39 per share in the second quarter 2013 (which included the effects of the Centennial bargain purchase gain and other non-recurring items to an adjusted $0.30 per share) and $0.18 per share in the third quarter 2012 –Net Interest Margin of 4.41%, compared to 4.36% in Q2 2013 and 4.41% in Q3 2012 –Return on Assets of 1.30% and Return on Tangible Common Equity of 17.1% compared to 0.85% and 11.7%, respectively, in Q3 2012 oSustained Balance Sheet Growth –Total assets of $8.92 billion, up $328 million from $8.59 billion in Q2 2013 and $1.52 billion from $7.40 billion in Q3 2012 –Total loans of $6.52 billion, up $104 million from $6.41 billion in Q2 2013 and $1.18 billion from $5.33 billion in Q3 2012 –Total deposits of $7.28 billion, up $274 million from $7.0 billion in Q2 2013 and $1.11 billion from $6.16 billion in Q3 2012 oAsset Quality –Annualized Net Loan Recoveries to Average Loans of 0.10%, compared to Net Loan Charge-Offs of 0.17% in Q2 2013 and 0.70% in Q3 2012 –Non-Performing Assets to Total Assets of 1.7%, down from 1.9% in Q2 2013 and 2.7% in Q3 2012 oCapital –Tier 1 Common Capital Ratio of 8.8%, compared to 8.3% in Q2 2013 and 8.1% in Q3 2012 –Tangible Book Value/Share of $7.57, compared to $7.26 in Q2 2013 and $6.35 in Q3 2012 Note: Capital ratios are estimates until Call Reports are filed
$1,756 $1,948 $2,085 $2,174 $2,235 $1,331 $1,397 $1,414 $1,550 $1,551 $1,401 $1,500 $1,532 $1,833 $1,856 $465 $471 $443 $438 $414 $380 $394 $381 $417 Q3-12Q4-12Q1-13Q2-13Q3-13Loan Growth and Portfolio Composition $ in millions $1.18 Billion Year Over Year Growth Commercial & Industrial CRE, Owner Occupied CRE, Non-Owner Occupied Construction & Land Residential and Consumer Construction loans up $43 million as a result of increased demand in Q3 2013 Residential and Consumer loans declined as the Company focuses its efforts on commercial line Q4 2012 and Q2 2013 include loans acquired from Western Liberty and Centennial Highlights $5,333 $5,709 $5,855 $6,412 $6,516 Growth +376 +146 +557 +104 $460
Deposit Growth and Composition $ in millions $1.11 Billion Year Over Year Growth Savings & MMDA NOW CDs Non-Int Bearing DDA $1,841 $1,933 $1,930 $1,920 $1,972 $2,541 $2,574 $2,827 $2,945 $3,050 $515 $582 $620 $631 $674 $1,265 $1,366 $1,358 $1,505 $1,579 Q3-12Q4-12Q1-13Q2-13Q3-13 $6,162 $6,455 $6,735 $7,001 $7,275 Growth +293 +280 +266 +274 Deposits up 18% year over year Q3 2013 growth driven by CDs and Savings & MMDA Q4 2012 and Q2 2013 include deposits acquired from Western Liberty and Centennial Highlights
$78 $74 $75 $69 $68 $123 $106 $94 $82 $75 $116 $97 $84 $71 $78 $100 $98 $122 $115 $103 Q3-12Q4-12Q1-13Q2-13Q3-13$417 $375 $375 $337 Adversely Graded Loans and Non-Performing Assets $ in millions Q3-12Q4-12Q1-13Q2-13Q3-13 OREO Non-Performing Loans Classified Accruing Loans Special Mention Loans$23 $125 $20 Organic Acquired* Q3 2012 – Q3 2013 NPA’s Adversely Graded Loans * Net of Centennial and Western Liberty credit and rate mark discounts of $56 million $324 $111 Accruing TDRs total $87 million as of 9/30/2013
Consolidated Balance Sheet $ in millions * Net of tax Assets increased $1.52 billion or 20.5% year over year Allowance for Loan Loss flat despite 22.2% YOY increase in loans as credit quality has improved Deposits up 18.1% YOY Tangible Common Equity up 24.3% and Tangible Book Value/Share up 19.2% YOY Highlights Q3 - 13Q2 - 13Q3 - 12Investments & Cash1,880$ 1,696$ 1,647$ Total Loans 6,516 6,412 5,333 Allowance for Credit Losses(98) (96) (97) Other Assets623 582 521 Total Assets8,921$ 8,594 $ 7,404$ Deposits7,275$ 7,001$ 6,162$ Other Liabilities820 793 544 Total Liabilities8,095$ 7,794$ 6,706$ Shareholders' Equity826 800 698 Total Liabilities and Equity8,921$ 8,594$ 7,404$ Tangible Common Equity*659$ 632$ 530$ Tangible Common Equity Ratio 7.4% 7.4% 7.2% Tangible Book Value/Share 7.57 $ 7.26 $ 6.35 $ EOP Shares outstanding (mils) 87.1 87.0 83.5
Consolidated Financial Results Highlights NII up $12.7 million or 17.5% YOY; Operating Non Interest Income includes $0.8 million BOLI gain Operating expenses up $4.4 million or 10.0% YOY Provision for Loan Losses fell from $8.9 million to $0.0 YOY as credit quality improves Q2 2013 tax expense reflects non-taxable bargain purchase gain from Centennial Net Income up $12.7 million or 82.4% YOY EPS up $0.14 or 78% YOY $ in millions except EPS Page 7 Q3 - 13Q2 - 13Q3 - 12 Net Interest Income 84.6$ 82.2$ 71.9$ Operating Non Interest Income5.85.05.4Total Revenue90.4$ 87.2$ 77.3$ Operating Expenses(48.3)(47.1)(43.9)Pre-Tax, Pre-Provision Income42.1$ 40.1$ 33.4$ Provision for Credit Losses 0.0(3.5)(8.9)Repossessed Asset Valuation (0.4)1.1(0.1)Investment Gain/(Loss) on Sale(1.7)0.01.0Bargain Purchase Gain0.010.00.0Merger/Restructure Expenses(1.0)(2.6)(0.1)Amortization of Affordable Housing and Other Items(1.5)(4.1)(2.8)Pre-Tax Income 37.5$ 41.0$ 22.5$ Income Tax(9.3)(6.8)(6.8)Discontinued Operations0.0(0.2)(0.2)Net Income 28.2$ 34.0$ 15.5$ Preferred Dividend(0.4)(0.4)(0.4)Net Income Available to Common 27.8$ 33.6$ 15.1$ Earnings Per Share0.32$ 0.39$ 0.18$
$27.7 $30.1 $29.3 $30.7 $31.9 4.28% 4.50% 4.16% 4.25% 4.44% 4.0%4.2%4.4%4.6%4.8%5.0%5.2%Q3-12Q4-12Q1-13Q2-13Q3-13$24.4 $26.7 $26.6 $32.5 $33.8 4.50% 4.58% 4.42% 4.74% 4.73% $15$19$23$27$31$35$39Q3-12Q4-12Q1-13Q2-13Q3-13$21.8 $22.2 $20.8 $20.6 $21.1 5.11% 5.07% 4.72% 4.64% 4.65% Q3-12Q4-12Q1-13Q2-13Q3-13$71.9 $77.5 $76.2 $82.2 $84.6 4.41% 4.55% 4.36% 4.36% 4.41% 4.0%4.2%4.4%4.6%4.8%5.0%5.2%$65$70$75$80$85$90Q3-12Q4-12Q1-13Q2-13Q3-13Net Interest Income and NIM $ in millions Bank of Nevada Torrey Pines Bank WAL Consolidated Note: Net Interest Margin is reported on a tax-equivalent basis and excludes the interest income and loan balances of held for sale loans Highlights o5 bps increase to 4.41% NIM at WAL driven by 19 bps increase at BON because of higher loan yields and a change in mix Western Alliance Bank
$5.3 $5.7 $5.9 $6.4 $6.5 5.42% 5.60% 5.42% 5.40% 5.44% Q3-12Q4-12Q1-13Q2-13Q3-13$168 $205 $422 $249 $381 Q3-12Q4-12Q1-13Q2-13Q3-13$1.3 $1.2 $1.3 $1.3 $1.4 3.17% 3.25% 3.21% 2.92% 3.01% Q3-12Q4-12Q1-13Q2-13Q3-13$4.3 $4.5 $4.8 $5.1 $5.3 0.38% 0.35% 0.32% 0.32% 0.33% Q3-12Q4-12Q1-13Q2-13Q3-13WAL Consolidated Net Interest Drivers $ in billions Cash and Due from Banks Loans and Yield Total Investments and Yield Interest Bearing Deposits and Cost $ in millions
Operating Expense and Efficiency Ratio $ in millions $16.7 $16.8 $17.4 $17.3 $17.8 51.9% 45.5% 50.5% 48.0% 47.1% 35%40%45%50%55%60%Q3-12Q4-12Q1-13Q2-13Q3-13$11.9 $13.1 $13.1 $14.7 $15.2 44.7% 45.2% 45.1% 42.0% 40.8% $5$10$15$20Q3-12Q4-12Q1-13Q2-13Q3-13$11.1 $11.1 $12.0 $12.0 $11.9 47.3% 46.3% 53.1% 54.2% 53.0% Q3-12Q4-12Q1-13Q2-13Q3-13$43.9 $45.8 $46.2 $47.0 $48.3 54.9% 53.5% 54.6% 52.2% 51.6% 40%45%50%55%60%$35$40$45$50$55Q3-12Q4-12Q1-13Q2-13Q3-13Western Alliance Bank Bank of Nevada Torrey Pines Bank WAL Consolidated Note: Operating Expenses exclude goodwill impairment, merger-related expenses and gains/losses on sale of repossessed assets. Highlights o330 bps decrease in efficiency ratio since Q3 2012 due to reduced legacy expenses and increasing asset base driving higher revenues
Pre-Tax Pre-Provision Income and ROA $ in millions $14.2 $16.7 $15.3 $17.3 $18.4 1.93% 2.31% 1.93% 2.12% 2.22% 1.5%2.0%2.5%3.0%Q3-12Q4-12Q1-13Q2-13Q3-13$14.1 $15.2 $15.3 $19.5 $21.1 2.38% 2.38% 2.36% 2.62% 2.68% $0$5$10$15$20$25Q3-12Q4-12Q1-13Q2-13Q3-13$11.8 $12.2 $9.9 $9.7 $9.9 2.50% 2.51% 2.03% 1.98% 2.00% Q3-12Q4-12Q1-13Q2-13Q3-13$33.4 $36.8 $35.1 $40.1 $42.1 1.68% 1.98% 1.81% 1.92% 1.94% 1.5%2.0%2.5%3.0%$25$30$35$40$45Q3-12Q4-12Q1-13Q2-13Q3-13Western Alliance Bank Bank of Nevada Torrey Pines Bank WAL Consolidated Note: Pre-Tax Pre-Provision Income excludes securities and goodwill impairment, mark-to-market gains/losses, gains/losses on sale of investment securities and repossessed assets, merger-related expenses, and net acquisition gain Highlights oPre-tax Pre-Provision income up $8.7 million or 26% compared to Q3 2012 oPre-Pre ROA up 11 bps to 1.94% compared to Q3 2012
Net Income and ROA $ in millions $5.8 $7.6 $10.7 $12.7 $16.3 0.79% 0.99% 1.34% 1.55% 1.96% 0.0%0.5%1.0%1.5%2.0%Q3-12Q4-12Q1-13Q2-13Q3-13$8.8 $10.4 $8.5 $12.0 $9.8 1.48% 1.63% 1.31% 1.61% 1.24% $0$5$10$15$20$25$30Q3-12Q4-12Q1-13Q2-13Q3-13$6.4 $5.2 $6.3 $5.8 $4.6 1.31% 0.70% 1.30% 1.16% 0.90% Q3-12Q4-12Q1-13Q2-13Q3-13$15.5 $17.3 $21.0 $27.7 $28.2 0.85% 0.84% 1.08% 1.23% 1.30% 0.0%0.5%1.0%1.5%2.0%$0$5$10$15$20$25$30$35Q3-12Q4-12Q1-13Q2-13Q3-13Western Alliance Bank* Bank of Nevada Torrey Pines Bank WAL Consolidated* Highlights oConsolidated Net Income up $12.7 million or 81.9% compared to Q3 2013, aided in part by rebound in Nevada oConsolidated ROA now over 1.0% for three consecutive quarters Page 12 * Excludes BPO and other non-recurring items in Q4 2012 and Q2 2013
Composition of Pass Credits and Loan Grades 9/30/12 High Pass $1,364 Pass $3,636 Special Mention $98 Classified$236 Wtd Grade 4.18 Total Loans $5,333 million Pass Credits and Loan Grades Q3 2012 – Q3 2013 Composition of Pass Credits and Loan Grades 9/30/13 High Pass $1,700 Pass $4,459 Special Mention $137 Classified$219 Wtd Grade 4.13 Total Loans $6,516 million + + = $329 $8 $530 $292 $34 ($84) $68 Organic Loan Growth Centennial and Western Liberty Loans High Pass Pass Special MentionClassified$402 $781 $6
$9.0 $13.5 0.70% 0.99% 0.38% 0.17% Q3-12Q4-12Q1-13Q2-13Q3-13Affinity Card Mark to Fair Value($2.6 mil)WABTPBBONNet Charge-Off Rate 0.10% recovery rate, $1.5 million net recovery $2.7 $9.0 $13.5 $5.4 $2.7 $(1.5) $1.9 $3.2 $2.7 $3.1 $4.1 Q3-12Q4-12Q1-13Q2-13Q3-13Net Charge-Offs and Provision Q3 2012 – Q3 2013 $3.0 $4.2 $2.2 $3.0 $5.9 $7.3 $3.2 $0.5 $0.0 Q3-12Q4-12Q1-13Q2-13Q3-13 Other Allocated Provision Net Growth ProvisionNet Charge-Offs and Charge-Off Rate Loan Provision $8.9 $11.5 $5.4 $5.4 $3.5 Gross Charge Offs, Recoveries and Net Charge Offs Recoveries Net Charge-Offs Page 14 $10.9 $16.7 $8.1 $5.8 $2.6 Reserve on new loan growth of $1.3 million offset by $1.3 million reduction in other allocated
Effect of No Reserve for Acquired Loans Reported Less: Acquired Loans*Adjusted Allowance for Loan Losses98$ 98$ Total Loans6,516$ 402$ 6,114$ Ratio1.50%1.60%Effect of Acquired Loans Booked at Discount Reported Plus: Credit Discount*Adjusted Allowance for Loan Losses98$ 37$ 135$ Total Loans6,516$ 37$ 6,553$ Ratio1.50%2.06%* Western Liberty and Centennial Allowance for Credit Losses at 9/30/13
Charge-Offs By Vintage and Remaining Balances $ in millions $4 $14 $18 $66 $131 $262 $252 $392 $361 $308 $408 $838 $1,487 $1,534 0002001200220032004200520062007200820092010201120122013$2.4 $2.4 $2.1 $5.3 $25.9 $66.4 $126.1 $97.2 $63.7 $4.8 $2.9 $0.4 $0.2 $0.2 20002001200220032004200520062007200820092010201120122013Remaining Balances by Vintage 2000-2013 Charge-Offs by Vintage 2000-2013 $102 outstanding balances (1.7% of total) $379.3 charge offs (94.8% of total) $8.5 charge offs (2.1% of total) $12.2 charge offs (3.1% of total) $1,397 outstanding balances (23.0% of total) $4,575 outstanding balances (75.3% of total)
Capital Q3 2012 – Q3 2013 12.3% 12.6% 12.6% 12.0% 12.5% 8.1% 8.6% 8.6% 8.3% 8.8% 11.0% 11.3% 11.3% 10.8% 11.2% 9.7% 10.1% 10.1% 9.9% 10.0% Q3-12Q4-12Q1-13Q2-13Q3-13Total RBCTier 1 CommonTier 1 RBCTier 1 LeverageRegulatory Ratios Page 17 Basel III (2015) Estimated Capital Tangible Common Equity, net of tax659 Cumulative OCI Related to AFS and other9 Basel I Tier 1 Common Equity668 Disallowed FV TRUPS adjustment and DTA(23) Basel III Tier 1 Common Equity645 Basel I Risk Based Assets7,626 Basel III Risk Based Assets7,746 Basel I Total Tier 1 Capital856 DTAs and Investments in Other Financial Companies(22) Basel III Total Tier 1 Capital834 Basel III Total Risk Based Capital931 Basel III Total RBC 12.0%Basel III Tier 1 RBC 10.8%Basel III Tier 1 Leverage 9.7%Basel III Tier 1 Common 8.3%
Tangible Book Value and ROTCE Q3 2012- Q3 2013 Page 18 $6.35 $6.84 $7.04 $7.26 $7.57 11.6% 12.0% 13.9% 16.5% 17.1% 8.0%13.0%18.0%23.0%28.0%$4.00$6.00$8.00Q3-12Q4-12Q1-13Q2-13Q3-13TBV/ShareROTCE* * * After adjusting for bank acquisitions and other non-recurring items.
Outlook 4th Quarter 2013 Balance Sheet Growth Interest Margin Operating Efficiency Asset Quality
Question & Answer WAL Q3 2013 Earnings Presentation
Forward-Looking Statements This presentation contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding guidance or expectations relating to balance sheet growth, interest margin, operating efficiency, asset quality, and regulatory capital. 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: factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular. Any forward-looking statement made by us in this presentation 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 presentation to reflect new information, future events or otherwise.