Western Alliance Bancorporation (NYSE:WAL):
THIRD QUARTER 2023 FINANCIAL RESULTS
Quarter Highlights:
Net income
Earnings per share
PPNR1
Net interest margin
Adjusted efficiency
ratio1
Book value per
common share
$49.78
$216.6 million
$1.97
$290.0 million
3.67%
50.0%
$43.661, excluding
goodwill and intangibles
CEO COMMENTARY:
“Western Alliance continued to execute its
balance sheet repositioning strategy and produced strengthening
profitability in the third quarter, highlighted by net interest
income growth and net interest margin expansion, while maintaining
stable asset quality. Deposit momentum continued to improve
liquidity levels and demonstrates the vibrancy of the franchise,”
said Kenneth A. Vecchione, President and Chief Executive Officer.
“Quarterly deposit growth of $3.2 billion lowered our HFI
loan-to-deposit ratio to 91%, with total insured and collateralized
deposits representing 82% of deposits and available liquidity
coverage of 293% of uninsured deposits. We achieved net income of
$216.6 million and earnings per share of $1.97 for the third
quarter 2023, which resulted in a return on tangible common equity1
of 17.3%. Tangible book value per share1 climbed 1.3% quarterly to
$43.66, or 17.5% year-over-year, with a CET1 ratio of 10.6%.”
LINKED-QUARTER BASIS
YEAR-OVER-YEAR
FINANCIAL HIGHLIGHTS:
- Net income of $216.6 million and earnings per share of $1.97,
compared to $215.7 million and $1.96, respectively
- Net income of $216.6 million and earnings per share of $1.97,
down 18.0% and 18.6%, from $264.0 million and $2.42,
respectively
- Net revenue of $716.2 million, an increase of 7.0%, or $46.9
million, compared to an increase in non-interest expenses of 10.0%,
or $38.8 million
- Net revenue of $716.2 million, an increase of 7.9%, or $52.3
million, compared to an increase in non-interest expenses of 39.4%,
or $120.4 million
- Pre-provision net revenue1 of $290.0 million, up $8.1 million
from $281.9 million
- Pre-provision net revenue1 of $290.0 million, down $68.1
million from $358.1 million
- Effective tax rate of 22.1%, compared to 17.1%
- Effective tax rate of 22.1%, compared to 19.9%
FINANCIAL POSITION RESULTS:
- HFI loans of $49.4 billion, up $1.6 billion, or 3.3%, primarily
due to $1.3 billion that was transferred from HFS
- Decrease in HFI loans of $2.8 billion, or 5.3%
- Total deposits of $54.3 billion, up $3.2 billion, or 6.4%
- Decrease in total deposits of $1.3 billion, or 2.3%
- Stockholders' equity of $5.7 billion, up $61 million
- Increase in stockholders' equity of $725 million
LOANS AND ASSET QUALITY:
- Nonperforming assets (nonaccrual loans and repossessed assets)
to total assets of 0.35%, compared to 0.39%
- Nonperforming assets to total assets of 0.35%, compared to
0.15%
- Annualized net loan charge-offs to average loans outstanding of
0.07%, compared to 0.06%
- Annualized net loan charge-offs (recoveries) to average loans
outstanding of 0.07%, compared to (0.02)%
KEY PERFORMANCE METRICS:
- Net interest margin of 3.67% increased from 3.42%
- Net interest margin of 3.67% decreased from 3.78%
- Return on average assets and on tangible common equity1 of
1.24% and 17.3%, compared to 1.23% and 18.2%, respectively
- Return on average assets and on tangible common equity1 of
1.24% and 17.3%, compared to 1.53% and 24.9%, respectively
- Tangible common equity ratio1 of 6.8%, compared to 7.0%
- Tangible common equity ratio1 of 6.8% increased from 5.9%
- CET 1 ratio of 10.6% increased from 10.1%
- CET 1 ratio of 10.6% increased from 8.7%
- Tangible book value per share1, net of tax, of $43.66, an
increase of 1.3% from $43.09
- Tangible book value per share1, net of tax, of $43.66, an
increase of 17.5% from $37.16
- Adjusted efficiency ratio1 of 50.0%, compared to 50.5%
- Adjusted efficiency ratio1 of 50.0%, compared to 40.5%
Income Statement
Net interest income totaled $587.0 million in the third quarter
2023, an increase of $36.7 million, or 6.7%, from $550.3 million in
the second quarter 2023, and a decrease of $15.1 million, or 2.5%,
compared to the third quarter 2022. The increase in net interest
income from the second quarter 2023 is due to a decrease in average
short-term borrowings, combined with higher yields on HFI loans and
was partially offset by an increase in deposit balances and rates.
The decrease in net interest income from the third quarter 2022 was
driven by an increase in both the balances and rates of borrowings
and deposits, partially offset by higher yields on HFI loans.
The Company recorded a provision for credit losses of $12.1
million in the third quarter 2023, a decrease of $9.7 million from
$21.8 million in the second quarter 2023, and a decrease of $16.4
million from $28.5 million in the third quarter 2022. The decrease
in provision for credit losses during the third quarter 2023 is
primarily due to modest improvement in economic forecasts and
stable asset quality.
The Company’s net interest margin in the third quarter 2023 was
3.67%, an increase from 3.42% in the second quarter 2023, and a
decrease from 3.78% in the third quarter 2022. A decrease in
short-term borrowings and higher yields on HFI loans drove an
increase in net interest margin from the second quarter 2023, with
higher rates on short-term borrowings and on deposits partially
offsetting this increase. The decrease in net interest margin from
the third quarter 2022 was driven by higher average balances and
rates on deposits and short-term borrowings.
Non-interest income was $129.2 million for the third quarter
2023, compared to $119.0 million for the second quarter 2023, and
$61.8 million for the third quarter 2022. The $10.2 million
increase in non-interest income for the second quarter 2023 was due
to a $0.1 million gain on sale of securities in the third quarter
compared to a loss of $13.6 million in the second quarter, combined
with an increase in fair value gain adjustments of $5.1 million and
a $3.1 million increase in net loan servicing revenue due to higher
servicing income and MSR fair value changes. These increases were
offset by a $10.3 million decrease in net gain on loan origination
and sale activities from lower spreads and volume. The $67.4
million increase in non-interest income from the third quarter 2022
was driven by a higher net gain on loan origination and sale
activities, fair value gain adjustments, and service charges and
fees.
Net revenue totaled $716.2 million for the third quarter 2023,
an increase of $46.9 million or 7.0%, compared to $669.3 million
for the second quarter 2023, and an increase of $52.3 million or
7.9%, compared to $663.9 million for the third quarter 2022.
Non-interest expense was $426.2 million for the third quarter
2023, compared to $387.4 million for the second quarter 2023, and
$305.8 million for the third quarter 2022. The Company’s adjusted
efficiency ratio1 was 50.0% for the third quarter 2023, compared to
50.5% in the second quarter 2023, and 40.5% for the third quarter
2022. The increase in non-interest expense from the second quarter
2023 is due primarily to increased deposit costs. The increase in
non-interest expense from the third quarter 2022 is primarily
attributable to an increase in deposit and insurance costs.
Income tax expense was $61.3 million for the third quarter 2023,
compared to $44.4 million for the second quarter 2023, and $65.6
million for the third quarter 2022. The increase in income tax
expense from the second quarter 2023 is primarily due to discrete
nondeductible items.
Net income was $216.6 million for the third quarter 2023, an
increase of $0.9 million from $215.7 million for the second quarter
2023, and a decrease of $47.4 million from $264.0 million for the
third quarter 2022. Earnings per share totaled $1.97 for the third
quarter 2023, compared to $1.96 for the second quarter 2023, and
$2.42 for the third quarter 2022.
The Company views its pre-provision net revenue1 ("PPNR") as a
key metric for assessing the Company’s earnings power, which it
defines as net revenue less non-interest expense. For the third
quarter 2023, the Company’s PPNR1 was $290.0 million, up $8.1
million from $281.9 million in the second quarter 2023, and down
$68.1 million from $358.1 million in the third quarter 2022.
The Company had 3,272 full-time equivalent employees and 56
offices at September 30, 2023, compared to 3,336 employees and 56
offices at June 30, 2023, and 3,368 employees and 60 offices at
September 30, 2022.
Balance Sheet
HFI loans, net of deferred fees totaled $49.4 billion at
September 30, 2023, compared to $47.9 billion at June 30, 2023, and
$52.2 billion at September 30, 2022. The increase in HFI loans of
$1.6 billion from the prior quarter was primarily related to loan
transfers from HFS to HFI totaling $1.3 billion, which drove an
increase of $1.7 billion in commercial and industrial loans and
$241 million in construction and land development loans. The
decrease in HFI loans of $2.8 billion from September 30, 2022 was
driven by a $4.0 billion decrease in commercial and industrial
loans, resulting from the transfer of a significant portion of HFI
loans to HFS in the first quarter 2023 as part of the Company's
balance sheet repositioning strategy. This decrease was partially
offset by increases in CRE non-owner occupied and construction and
land development loans of $1.1 billion and $1.0 billion,
respectively. HFS loans totaled $1.8 billion at September 30, 2023,
compared to $3.2 billion at June 30, 2023, and $2.2 billion at
September 30, 2022. The balance of HFS loans at September 30, 2023
primarily consisted of AmeriHome HFS loans, consistent with the
balance at December 31, 2022 and prior periods. The decrease of
$1.4 billion in HFS loans from the prior quarter is primarily
related to transfer of loans to HFI. The decrease of $438 million
in HFS loans from September 30, 2022 primarily relates to a
decrease in AmeriHome HFS loans.
The Company's allowance for credit losses on HFI loans consists
of an allowance for funded HFI loans and an allowance for unfunded
loan commitments. At September 30, 2023, the allowance for loan
losses to funded HFI loans ratio was 0.66%, compared to 0.67% at
June 30, 2023, and 0.58% at September 30, 2022. The allowance for
credit losses, which includes the allowance for unfunded loan
commitments, to funded HFI loans ratio was 0.74% at September 30,
2023, compared to 0.76% at June 30, 2023, and 0.68% at September
30, 2022. The Company is a party to credit linked note
transactions, which effectively transfer a portion of the risk of
losses on reference pools of loans to the purchasers of the notes.
The Company is protected from first credit losses on reference
pools of loans totaling $9.3 billion, $9.4 billion, and $10.8
billion as of September 30, 2023, June 30, 2023, and September 30,
2022, respectively, under these transactions. However, as these
note transactions are considered to be free standing credit
enhancements, the allowance for credit losses cannot be reduced by
the expected credit losses that may be mitigated by these notes.
Accordingly, the allowance for loan and credit losses ratios
include an allowance of $17.4 million as of September 30, 2023,
$21.4 million as of June 30, 2023, and $18.5 million as of
September 30, 2022, related to these pools of loans. The allowance
for credit losses to funded HFI loans ratio, adjusted to reduce the
HFI loan balance by the amount of loans in covered reference pools,
was 0.91% at September 30, 2023, 0.94% at June 30, 2023, and 0.86%
at September 30, 2022.
Deposits totaled $54.3 billion at September 30, 2023, an
increase of $3.2 billion from $51.0 billion at June 30, 2023, and a
decrease of $1.3 billion from $55.6 billion at September 30, 2022.
By deposit type, the increase from the prior quarter is
attributable to increases of $1.6 billion from savings and money
market accounts, $1.3 billion from non-interest bearing demand
deposits, $204 million from certificates of deposits, and $197
million from interest-bearing demand deposits. From September 30,
2022, non-interest bearing demand deposits and savings and money
market accounts decreased $6.9 billion and $4.5 billion,
respectively. These decreases were partially offset by increases in
certificates of deposit and interest-bearing demand deposits of
$5.7 billion and $4.5 billion, respectively. Non-interest bearing
deposits were $18.0 billion at September 30, 2023, compared to
$16.7 billion at June 30, 2023, and $24.9 billion at September 30,
2022.
The table below shows the Company's deposit types as a
percentage of total deposits:
Sep 30, 2023
Jun 30, 2023
Sep 30, 2022
Non-interest bearing
33.1
%
32.8
%
44.8
%
Savings and money market
27.0
25.6
34.6
Interest-bearing demand
23.7
24.8
15.0
Certificates of deposit
16.2
16.8
5.6
The Company’s ratio of HFI loans to deposits was 91.1% at
September 30, 2023, compared to 93.8% at June 30, 2023, and 93.9%
at September 30, 2022.
Borrowings were $8.7 billion at September 30, 2023, $9.6 billion
at June 30, 2023, and $6.3 billion at September 30, 2022.
Borrowings decreased from June 30, 2023 due primarily to a decrease
in short-term borrowings of $817 million. The increase in
borrowings from September 30, 2022 is due to an increase in
short-term borrowings of $2.9 billion, partially offset by payoffs
of credit linked notes in the first half of 2023.
Qualifying debt totaled $890 million at September 30, 2023,
compared to $888 million at June 30, 2023, and $889 million at
September 30, 2022.
Stockholders’ equity was $5.7 billion at September 30, 2023,
compared to $5.7 billion at June 30, 2023 and $5.0 billion at
September 30, 2022. The slight increase in stockholders’ equity
from the prior quarter was due to net income, partially offset by
dividends to shareholders and unrealized fair value losses of $121
million on the Company's available-for-sale securities, which are
recorded in other comprehensive loss, net of tax. Cash dividends of
$39.4 million ($0.36 per common share) and $3.2 million ($0.27 per
depository share) were paid to shareholders during the third
quarter 2023. The increase in stockholders' equity from September
30, 2022 is primarily a function of net income, partially offset by
dividends to shareholders.
At September 30, 2023, tangible common equity, net of tax1, was
6.8% of tangible assets1 and total capital was 13.5% of
risk-weighted assets. The Company’s tangible book value per share1
was $43.66 at September 30, 2023, an increase of 1.3% from $43.09
at June 30, 2023, and up 17.5% from $37.16 at September 30, 2022.
The increase in tangible book value per share from June 30, 2023 is
attributable to net income.
Total assets increased 4.0% to $70.9 billion at September 30,
2023, from $68.2 billion at June 30, 2023, and increased 2.5% from
$69.2 billion at September 30, 2022. The increase in total assets
from June 30, 2023 was driven by an increase in HFI loans, cash,
and investments, partially offset by a decrease in HFS loans. The
increase in total assets from September 30, 2022 was driven by an
increase in investments and cash, partially offset by a decrease in
HFI and HFS loans.
Asset Quality
Provision for credit losses totaled $12.1 million for the third
quarter 2023, compared to $21.8 million for the second quarter
2023, and $28.5 million for the third quarter 2022. Net loan
charge-offs (recoveries) in the third quarter 2023 were $8.0
million, or 0.07% of average loans (annualized), compared to $7.4
million, or 0.06%, in the second quarter 2023, and $(1.9) million,
or (0.02)%, in the third quarter 2022.
Nonaccrual loans decreased $19 million to $237 million during
the quarter and increased $147 million from September 30, 2022.
Loans past due 90 days and still accruing interest were zero at
each of the periods ended September 30, 2023, June 30, 2023, and
September 30, 2022 (excluding government guaranteed loans of $439
million, $481 million, and $644 million, respectively). Loans past
due 30-89 days and still accruing interest totaled $189 million at
September 30, 2023, an increase from $121 million at June 30, 2023,
and an increase from $56 million at September 30, 2022 (excluding
government guaranteed loans of $261 million, $289 million, and $245
million, respectively).
Repossessed assets totaled $8 million at September 30, 2023, a
$3 million decrease from $11 million at June 30, 2023 and September
30, 2022. Classified assets totaled $639 million at September 30,
2023, an increase of $35 million from $604 million at June 30,
2023, and an increase of $254 million from $385 million at
September 30, 2022.
The ratio of classified assets to Tier 1 capital plus the
allowance for credit losses, a common regulatory measure of asset
quality, was 10.2% at September 30, 2023, compared to 10.0% at June
30, 2023, and 7.0% at September 30, 2022.
1 See reconciliation of Non-GAAP Financial Measures.
Segment Highlights
The Company's reportable segments are aggregated with a focus on
products and services offered and consist of three reportable
segments:
–
Commercial segment: provides
commercial banking and treasury management products and services to
small and middle-market businesses, specialized banking services to
sophisticated commercial institutions and investors within niche
industries, as well as financial services to the real estate
industry.
–
Consumer Related segment: offers
both commercial banking services to enterprises in consumer-related
sectors and consumer banking services, such as residential mortgage
banking.
–
Corporate & Other segment: consists of
the Company's investment portfolio, Corporate borrowings and other
related items, income and expense items not allocated to our other
reportable segments, and inter-segment eliminations.
Key management metrics for evaluating the performance of the
Company's Commercial and Consumer Related segments include loan and
deposit growth, asset quality, and pre-tax income.
The Commercial segment reported an HFI loan balance of $28.7
billion at September 30, 2023, an increase of $581 million during
the quarter, and a decrease of $3.3 billion during the last twelve
months. The Commercial segment did not have any loans held for sale
at September 30, 2023, a decrease of $1.0 billion during the
quarter. Deposits for the Commercial segment totaled $22.6 billion
at September 30, 2023, an increase of $1.2 billion during the
quarter, and a decrease of $7.4 billion during the last twelve
months.
Pre-tax income for the Commercial segment was $196.1 million for
the three months ended September 30, 2023, a decrease of $25.3
million from the three months ended June 30, 2023, and a decrease
of $102.1 million from the three months ended September 30, 2022.
For the nine months ended September 30, 2023, the Commercial
segment reported total pre-tax income of $576.8 million, a decrease
of $198.0 million compared to the nine months ended September 30,
2022.
The Consumer Related segment reported an HFI loan balance of
$20.7 billion at September 30, 2023, an increase of $991 million
during the quarter, and an increase of $586 million during the last
twelve months. The Consumer Related segment also has loans held for
sale of $1.8 billion at September 30, 2023, a decrease of $341
million during the quarter, and a decrease of $438 million during
the last twelve months. Deposits for the Consumer Related segment
totaled $25.1 billion, an increase of $2.7 billion during the
quarter and an increase of $4.1 billion during the last twelve
months.
Pre-tax income for the Consumer Related segment was $68.9
million for the three months ended September 30, 2023, an increase
of $12.2 million from the three months ended June 30, 2023, and a
decrease of $24.3 million from the three months ended September 30,
2022. Pre-tax income for the Consumer Related segment for the nine
months ended September 30, 2023 totaled $182.4 million, a decrease
of $197.9 million compared to the nine months ended September 30,
2022.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and
live webcast to discuss its third quarter 2023 financial results at
12:00 p.m. ET on Friday, October 20, 2023. Participants may access
the call by dialing 1-833-470-1428 and using access code 448677 or
via live audio webcast using the website link
https://events.q4inc.com/attendee/123936476. The webcast is also
available via the Company’s website at
www.westernalliancebancorporation.com. Participants should log in
at least 15 minutes early to receive instructions. The call will be
recorded and made available for replay after 3:00 p.m. ET October
20th through 11:00 p.m. ET November 20th by dialing 1-866-813-9403,
using access code 831794.
Reclassifications
Certain amounts in the Consolidated Income Statements for the
prior periods have been reclassified to conform to the current
presentation. The reclassifications have no effect on net income or
stockholders’ equity as previously reported.
Use of Non-GAAP Financial Information
This press release contains both financial measures based on
GAAP and non-GAAP based financial measures, which are used where
management believes them to be helpful in understanding the
Company’s results of operations or financial position. Where
non-GAAP financial measures are used, the comparable GAAP financial
measure, as well as the reconciliation to the comparable GAAP
financial measure, can be found in this press release. These
disclosures should not be viewed as a substitute for operating
results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. Examples of forward-looking
statements include, among others, statements we make regarding our
expectations with regard to our business, financial and operating
results, future economic performance and dividends. The
forward-looking statements contained herein reflect our current
views about future events and financial performance and are subject
to risks, uncertainties, assumptions and changes in circumstances
that may cause our actual results to differ significantly from
historical results and those expressed in any forward-looking
statement. Some factors that could cause actual results to differ
materially from historical or expected results include, among
others: the risk factors discussed in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2022 and the Company's
subsequent Quarterly Reports on Form 10-Q, each as filed with the
Securities and Exchange Commission; adverse developments in the
financial services industry generally such as the bank failures
earlier in 2023 and any related impact on depositor behavior; risks
related to the sufficiency of liquidity; the potential adverse
effects of unusual and infrequently occurring events such as the
COVID-19 pandemic and any governmental or societal responses
thereto; changes in general economic conditions, either nationally
or locally in the areas in which we conduct or will conduct our
business; the impact on financial markets from geopolitical
conflicts such as the wars in Ukraine and the Middle East;
inflation, interest rate, market and monetary fluctuations;
increases in competitive pressures among financial institutions and
businesses offering similar products and services; higher defaults
on our loan portfolio than we expect; changes in management’s
estimate of the adequacy of the allowance for credit losses;
legislative or regulatory changes or changes in accounting
principles, policies or guidelines; supervisory actions by
regulatory agencies which may limit our ability to pursue certain
growth opportunities, including expansion through acquisitions;
additional regulatory requirements resulting from our continued
growth; management’s estimates and projections of interest rates
and interest rate policy; the execution of our business plan; and
other factors affecting the financial services industry generally
or the banking industry in particular.
Any forward-looking statement made by us in this release is
based only on information currently available to us and speaks only
as of the date on which it is made. We do not intend and disclaim
any duty or obligation to update or revise any industry information
or forward-looking statements, whether written or oral, that may be
made from time to time, set forth in this press release to reflect
new information, future events or otherwise.
About Western Alliance Bancorporation
With more than $70 billion in assets, Western Alliance
Bancorporation (NYSE:WAL) is one of the country’s top-performing
banking companies. Through its primary subsidiary, Western Alliance
Bank, Member FDIC, business clients benefit from a full spectrum of
tailored banking solutions and outstanding service delivered by
industry experts who put customers first. Influential sources from
Forbes to American Banker again rank Western Alliance Bank among
the top U.S. banks in 2023. Serving clients across the country
wherever business happens, Western Alliance Bank operates
individual, full-service banking and financial brands with offices
in key markets nationwide. For more information, visit
westernalliancebank.com.
Western Alliance Bancorporation and
Subsidiaries
Summary Consolidated Financial
Data
Unaudited
Selected Balance Sheet Data:
As of September 30,
2023
2022
Change %
(in millions)
Total assets
$
70,891
$
69,165
2.5
%
Loans held for sale
1,766
2,204
(19.9
)
HFI loans, net of deferred fees
49,447
52,201
(5.3
)
Investment securities
11,423
8,603
32.8
Total deposits
54,287
55,589
(2.3
)
Borrowings
8,745
6,319
38.4
Qualifying debt
890
889
0.1
Stockholders' equity
5,746
5,021
14.4
Tangible common equity, net of tax (1)
4,781
4,047
18.1
Common equity Tier 1 capital
5,540
4,771
16.1
Selected Income Statement Data:
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
Change %
2023
2022
Change %
(in millions, except per share data)
(in millions, except per share
data)
Interest income
$
1,026.6
$
739.4
38.8
%
$
2,996.3
$
1,803.5
66.1
%
Interest expense
439.6
137.3
NM
1,249.1
226.9
NM
Net interest income
587.0
602.1
(2.5
)
1,747.2
1,576.6
10.8
Provision for credit losses
12.1
28.5
(57.5
)
53.3
65.0
(18.0
)
Net interest income after provision for
credit losses
574.9
573.6
0.2
1,693.9
1,511.6
12.1
Non-interest income
129.2
61.8
NM
190.2
263.1
(27.7
)
Non-interest expense
426.2
305.8
39.4
1,161.5
823.3
41.1
Income before income taxes
277.9
329.6
(15.7
)
722.6
951.4
(24.0
)
Income tax expense
61.3
65.6
(6.6
)
148.1
187.1
(20.8
)
Net income
216.6
264.0
(18.0
)
574.5
764.3
(24.8
)
Dividends on preferred stock
3.2
3.2
—
9.6
9.6
—
Net income available to common
stockholders
$
213.4
$
260.8
(18.2
)
$
564.9
$
754.7
(25.1
)
Diluted earnings per common share
$
1.97
$
2.42
(18.6
)
$
5.21
$
7.03
(25.9
)
(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 September 30,
For the Nine Months Ended
September 30,
2023
2022
Change %
2023
2022
Change %
Diluted earnings per common share
$
1.97
$
2.42
(18.6
)%
$
5.21
$
7.03
(25.9
)%
Book value per common share
49.78
43.39
14.7
Tangible book value per common share, net
of tax (1)
43.66
37.16
17.5
Average common shares outstanding
(in millions):
Basic
108.3
107.5
0.8
108.3
107.0
1.2
Diluted
108.5
107.9
0.5
108.4
107.4
0.9
Common shares outstanding
109.5
108.9
0.5
Selected Performance Ratios:
Return on average assets (2)
1.24
%
1.53
%
(19.0
)%
1.09
%
1.60
%
(31.9
)%
Return on average tangible common equity
(1, 2)
17.3
24.9
(30.5
)
16.0
24.8
(35.5
)
Net interest margin (2)
3.67
3.78
(2.9
)
3.62
3.56
1.7
Efficiency ratio, adjusted for deposit
costs (1)
50.0
40.5
23.5
51.6
41.5
24.3
HFI loan to deposit ratio
91.1
93.9
(3.0
)
Asset Quality Ratios:
Net charge-offs to average loans
outstanding (2)
0.07
%
(0.02
)%
NM
0.06
%
0.00
%
NM
Nonaccrual loans to funded HFI loans
0.48
0.17
NM
Nonaccrual loans and repossessed assets to
total assets
0.35
0.15
NM
Allowance for loan losses to funded HFI
loans
0.66
0.58
13.8
Allowance for loan losses to nonaccrual
HFI loans
138
338
(59.1
)
Capital Ratios:
Sep 30, 2023
Jun 30, 2023
Sep 30, 2022
Tangible common equity (1)
6.8
%
7.0
%
5.9
%
Common Equity Tier 1 (3)
10.6
10.1
8.7
Tier 1 Leverage ratio (3)
8.5
8.1
7.5
Tier 1 Capital (3)
11.3
10.8
9.3
Total Capital (3)
13.5
13.0
11.4
(1)
See Reconciliation of Non-GAAP Financial
Measures.
(2)
Annualized on an actual/actual basis for
periods less than 12 months.
(3)
Capital ratios for September 30, 2023 are
preliminary.
NM
Changes +/- 100% are not meaningful.
Western Alliance Bancorporation and
Subsidiaries
Condensed Consolidated Income
Statements
Unaudited
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(dollars in millions, except per
share data)
Interest income:
Loans
$
860.8
$
657.0
$
2,550.7
$
1,608.3
Investment securities
122.8
75.9
331.3
183.2
Other
43.0
6.5
114.3
12.0
Total interest income
1,026.6
739.4
2,996.3
1,803.5
Interest expense:
Deposits
316.2
77.6
798.9
118.8
Qualifying debt
9.5
8.9
28.3
25.9
Borrowings
113.9
50.8
421.9
82.2
Total interest expense
439.6
137.3
1,249.1
226.9
Net interest income
587.0
602.1
1,747.2
1,576.6
Provision for credit losses
12.1
28.5
53.3
65.0
Net interest income after provision for
credit losses
574.9
573.6
1,693.9
1,511.6
Non-interest income:
Net gain on loan origination and sale
activities
52.0
14.5
145.7
78.6
Net loan servicing revenue
27.2
23.0
93.2
109.5
Service charges and fees
23.3
6.5
53.6
21.1
Commercial banking related income
5.6
5.1
17.8
16.0
Income from equity investments
0.5
4.3
2.6
13.6
(Loss) gain on recovery from credit
guarantees
(4.0
)
0.4
0.5
11.7
Gain (loss) on sales of investment
securities
0.1
—
(26.0
)
6.7
Fair value gain (loss) adjustments,
net
17.8
(2.8
)
(117.3
)
(19.4
)
Other
6.7
10.8
20.1
25.3
Total non-interest income
129.2
61.8
190.2
263.1
Non-interest expenses:
Salaries and employee benefits
137.2
136.5
431.7
413.8
Deposit costs
127.8
56.2
305.7
83.6
Data processing
33.9
21.8
88.9
59.1
Insurance
33.1
8.1
81.8
22.2
Legal, professional, and directors'
fees
28.3
24.8
77.8
73.9
Occupancy
16.8
13.9
48.7
39.7
Loan servicing expenses
11.9
15.2
44.1
40.7
Loan acquisition and origination
expenses
5.6
5.8
15.6
18.7
Business development and marketing
4.9
5.0
15.1
14.8
Net loss (gain) on sales and valuations of
repossessed and other assets
2.2
(0.2
)
2.7
(0.4
)
Gain on extinguishment of debt
—
—
(13.4
)
—
Other
24.5
18.7
62.8
57.2
Total non-interest expense
426.2
305.8
1,161.5
823.3
Income before income taxes
277.9
329.6
722.6
951.4
Income tax expense
61.3
65.6
148.1
187.1
Net income
216.6
264.0
574.5
764.3
Dividends on preferred stock
3.2
3.2
9.6
9.6
Net income available to common
stockholders
$
213.4
$
260.8
$
564.9
$
754.7
Earnings per common share:
Diluted shares
108.5
107.9
108.4
107.4
Diluted earnings per share
$
1.97
$
2.42
$
5.21
$
7.03
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Income Statements
Unaudited
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
(in millions, except per share
data)
Interest income:
Loans
$
860.8
$
857.2
$
832.7
$
785.1
$
657.0
Investment securities
122.8
112.4
96.1
89.4
75.9
Other
43.0
31.2
40.1
13.8
6.5
Total interest income
1,026.6
1,000.8
968.9
888.3
739.4
Interest expense:
Deposits
316.2
251.1
231.6
157.6
77.6
Qualifying debt
9.5
9.5
9.3
9.1
8.9
Borrowings
113.9
189.9
118.1
81.9
50.8
Total interest expense
439.6
450.5
359.0
248.6
137.3
Net interest income
587.0
550.3
609.9
639.7
602.1
Provision for credit losses
12.1
21.8
19.4
3.1
28.5
Net interest income after provision for
credit losses
574.9
528.5
590.5
636.6
573.6
Non-interest income:
Net gain on loan origination and sale
activities
52.0
62.3
31.4
25.4
14.5
Net loan servicing revenue
27.2
24.1
41.9
21.4
23.0
Service charges and fees
23.3
20.8
9.5
5.9
6.5
Commercial banking related income
5.6
6.0
6.2
5.5
5.1
Income from equity investments
0.5
0.7
1.4
4.2
4.3
(Loss) gain on recovery from credit
guarantees
(4.0
)
1.2
3.3
3.0
0.4
Gain (loss) on sales of investment
securities
0.1
(13.6
)
(12.5
)
0.1
—
Fair value gain (loss) adjustments,
net
17.8
12.7
(147.8
)
(9.2
)
(2.8
)
Other
6.7
4.8
8.6
5.2
10.8
Total non-interest income
129.2
119.0
(58.0
)
61.5
61.8
Non-interest expenses:
Salaries and employee benefits
137.2
145.6
148.9
125.7
136.5
Deposit costs
127.8
91.0
86.9
82.2
56.2
Data processing
33.9
28.6
26.4
23.9
21.8
Insurance
33.1
33.0
15.7
8.9
8.1
Legal, professional, and directors'
fees
28.3
26.4
23.1
26.0
24.8
Occupancy
16.8
15.4
16.5
15.8
13.9
Loan servicing expenses
11.9
18.4
13.8
14.8
15.2
Loan acquisition and origination
expenses
5.6
5.6
4.4
4.4
5.8
Business development and marketing
4.9
5.0
5.2
7.3
5.0
Net loss (gain) on sales and valuations of
repossessed and other assets
2.2
0.5
0.0
(0.3
)
(0.2
)
Gain on extinguishment of debt
—
(0.7
)
(12.7
)
—
—
Other
24.5
18.6
19.7
24.7
18.7
Total non-interest expense
426.2
387.4
347.9
333.4
305.8
Income before income taxes
277.9
260.1
184.6
364.7
329.6
Income tax expense
61.3
44.4
42.4
71.7
65.6
Net income
216.6
215.7
142.2
293.0
264.0
Dividends on preferred stock
3.2
3.2
3.2
3.2
3.2
Net income available to common
stockholders
$
213.4
$
212.5
$
139.0
$
289.8
$
260.8
Earnings per common share:
Diluted shares
108.5
108.3
108.3
108.4
107.9
Diluted earnings per share
$
1.97
$
1.96
$
1.28
$
2.67
$
2.42
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Balance Sheets
Unaudited
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
(in millions)
Assets:
Cash and due from banks
$
3,497
$
2,153
$
3,639
$
1,043
$
1,610
Investment securities
11,423
10,374
9,493
8,760
8,603
Loans held for sale
1,766
3,156
7,022
1,184
2,204
Loans held for investment:
Commercial and industrial
18,344
16,657
15,503
20,710
22,318
Commercial real estate - non-owner
occupied
9,810
9,913
9,617
9,319
8,668
Commercial real estate - owner
occupied
1,771
1,805
1,809
1,818
1,848
Construction and land development
4,669
4,428
4,407
4,013
3,621
Residential real estate
14,779
15,000
15,024
15,928
15,674
Consumer
74
72
75
74
72
Loans HFI, net of deferred fees
49,447
47,875
46,435
51,862
52,201
Allowance for loan losses
(327
)
(321
)
(305
)
(310
)
(304
)
Loans HFI, net of deferred fees and
allowance
49,120
47,554
46,130
51,552
51,897
Mortgage servicing rights
1,233
1,007
910
1,148
1,044
Premises and equipment, net
327
315
293
276
237
Operating lease right-of-use asset
150
151
156
163
131
Other assets acquired through foreclosure,
net
8
11
11
11
11
Bank owned life insurance
184
184
183
182
181
Goodwill and other intangibles, net
672
674
677
680
682
Other assets
2,511
2,581
2,533
2,735
2,565
Total assets
$
70,891
$
68,160
$
71,047
$
67,734
$
69,165
Liabilities and Stockholders'
Equity:
Liabilities:
Deposits
Non-interest bearing demand deposits
$
17,991
$
16,733
$
16,465
$
19,691
$
24,926
Interest bearing:
Demand
12,843
12,646
10,719
9,507
8,350
Savings and money market
14,672
13,085
13,845
19,397
19,202
Certificates of deposit
8,781
8,577
6,558
5,049
3,111
Total deposits
54,287
51,041
47,587
53,644
55,589
Borrowings
8,745
9,567
15,853
6,299
6,319
Qualifying debt
890
888
895
893
889
Operating lease liability
180
179
184
185
149
Accrued interest payable and other
liabilities
1,043
800
1,007
1,357
1,198
Total liabilities
65,145
62,475
65,526
62,378
64,144
Stockholders' Equity:
Preferred stock
295
295
295
295
295
Common stock and additional paid-in
capital
2,073
2,064
2,054
2,058
2,049
Retained earnings
4,111
3,937
3,764
3,664
3,413
Accumulated other comprehensive loss
(733
)
(611
)
(592
)
(661
)
(736
)
Total stockholders' equity
5,746
5,685
5,521
5,356
5,021
Total liabilities and stockholders'
equity
$
70,891
$
68,160
$
71,047
$
67,734
$
69,165
Western Alliance Bancorporation and
Subsidiaries
Changes in the Allowance For Credit
Losses on Loans
Unaudited
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
(in millions)
Allowance for loan losses
Balance, beginning of period
$
321.1
$
304.7
$
309.7
$
304.1
$
273.2
Provision for credit losses (1)
14.3
23.8
1.0
7.4
29.0
Recoveries of loans previously
charged-off:
Commercial and industrial
0.4
0.7
3.2
0.3
3.8
Commercial real estate - non-owner
occupied
—
—
—
—
0.1
Commercial real estate - owner
occupied
—
—
—
0.1
—
Construction and land development
—
—
—
—
0.1
Residential real estate
0.1
—
—
—
—
Consumer
—
0.1
—
—
—
Total recoveries
0.5
0.8
3.2
0.4
4.0
Loans charged-off:
Commercial and industrial
5.5
6.0
9.1
1.1
2.1
Commercial real estate - non-owner
occupied
3.0
2.2
—
—
—
Commercial real estate - owner
occupied
—
—
—
0.5
—
Construction and land development
—
—
—
0.6
—
Residential real estate
—
—
—
—
—
Consumer
—
—
0.1
—
—
Total loans charged-off
8.5
8.2
9.2
2.2
2.1
Net loan charge-offs (recoveries)
8.0
7.4
6.0
1.8
(1.9
)
Balance, end of period
$
327.4
$
321.1
$
304.7
$
309.7
$
304.1
Allowance for unfunded loan
commitments
Balance, beginning of period
$
41.1
$
44.8
$
47.0
$
52.1
$
53.8
Recovery of credit losses (1)
(3.2
)
(3.7
)
(2.2
)
(5.1
)
(1.7
)
Balance, end of period (2)
$
37.9
$
41.1
$
44.8
$
47.0
$
52.1
Components of the allowance for credit
losses on loans
Allowance for loan losses
$
327.4
$
321.1
$
304.7
$
309.7
$
304.1
Allowance for unfunded loan
commitments
37.9
41.1
44.8
47.0
52.1
Total allowance for credit losses on
loans
$
365.3
$
362.2
$
349.5
$
356.7
$
356.2
Net charge-offs (recoveries) to average
loans - annualized
0.07
%
0.06
%
0.05
%
0.01
%
(0.02
)%
Allowance ratios
Allowance for loan losses to funded HFI
loans (3)
0.66
%
0.67
%
0.66
%
0.60
%
0.58
%
Allowance for credit losses to funded HFI
loans (3)
0.74
0.76
0.75
0.69
0.68
Allowance for loan losses to nonaccrual
HFI loans
138
125
285
364
338
Allowance for credit losses to nonaccrual
HFI loans
154
141
327
420
396
(1)
The above tables reflect the provision for
credit losses on funded and unfunded loans. There was a $0.3
million provision for credit losses on AFS investment securities
and a $0.7 million provision release on HTM investment securities
for the three months ended September 30, 2023. The allowance for
credit losses on AFS and HTM investment securities totaled $4.7
million and $6.7 million, respectively, as of September 30,
2023.
(2)
The allowance for unfunded loan
commitments is included as part of accrued interest payable and
other liabilities on the balance sheet.
(3)
Ratio includes an allowance for credit
losses of $17.4 million as of September 30, 2023 related to a pool
of loans covered under three separate credit linked note
transactions.
Western Alliance Bancorporation and
Subsidiaries
Asset Quality Metrics
Unaudited
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
(in millions)
Nonaccrual loans and repossessed
assets
Nonaccrual loans
$
237
$
256
$
107
$
85
$
90
Nonaccrual loans to funded HFI loans
0.48
%
0.53
%
0.23
%
0.16
%
0.17
%
Repossessed assets
$
8
$
11
$
11
$
11
$
11
Nonaccrual loans and repossessed assets to
total assets
0.35
%
0.39
%
0.17
%
0.14
%
0.15
%
Loans Past Due
Loans past due 90 days, still accruing
(1)
$
—
$
—
$
1
$
—
$
—
Loans past due 90 days, still accruing to
funded HFI loans
—
%
—
%
—
%
—
%
—
%
Loans past due 30 to 89 days, still
accruing (2)
$
189
$
121
$
58
$
70
$
56
Loans past due 30 to 89 days, still
accruing to funded HFI loans
0.38
%
0.25
%
0.13
%
0.13
%
0.11
%
Other credit quality metrics
Special mention loans
$
668
$
694
$
320
$
351
$
312
Special mention loans to funded HFI
loans
1.35
%
1.45
%
0.69
%
0.68
%
0.60
%
Classified loans on accrual
$
381
$
324
$
325
$
280
$
268
Classified loans on accrual to funded HFI
loans
0.77
%
0.68
%
0.70
%
0.54
%
0.51
%
Classified assets
$
639
$
604
$
459
$
393
$
385
Classified assets to total assets
0.90
%
0.89
%
0.65
%
0.58
%
0.56
%
(1)
Excludes government guaranteed residential
mortgage loans of $439 million, $481 million, $494 million, $582
million, and $644 million as of each respective date in the table
above.
(2)
Excludes government guaranteed residential
mortgage loans of $261 million, $289 million, $281 million, $334
million, and $245 million as of each respective date in the table
above.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
September 30, 2023
June 30, 2023
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans held for sale
$
3,069
$
47.3
6.11
%
$
6,343
$
105.2
6.65
%
Loans held for investment:
Commercial and industrial
16,855
324.3
7.70
15,712
302.3
7.78
CRE - non-owner occupied
9,950
196.1
7.83
9,754
180.7
7.44
CRE - owner occupied
1,790
26.4
5.97
1,816
25.1
5.66
Construction and land development
4,545
110.3
9.63
4,420
103.6
9.40
Residential real estate
14,914
155.0
4.12
15,006
139.0
3.72
Consumer
73
1.4
7.43
73
1.3
7.15
Total HFI loans (1), (2), (3)
48,127
813.5
6.73
46,781
752.0
6.48
Securities:
Securities - taxable
8,272
101.1
4.85
7,879
91.4
4.65
Securities - tax-exempt
2,103
21.7
5.12
2,062
21.0
5.12
Total securities (1)
10,375
122.8
4.91
9,941
112.4
4.76
Cash and other
2,911
43.0
5.87
2,584
31.2
4.84
Total interest earning assets
64,482
1,026.6
6.37
65,649
1,000.8
6.17
Non-interest earning assets
Cash and due from banks
279
259
Allowance for credit losses
(334
)
(314
)
Bank owned life insurance
184
183
Other assets
4,513
4,361
Total assets
$
69,124
$
70,138
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
12,947
$
98.9
3.03
%
$
11,893
$
80.2
2.71
%
Savings and money market
13,832
106.3
3.05
13,167
87.2
2.66
Certificates of deposit
9,125
111.0
4.83
7,626
83.7
4.40
Total interest-bearing deposits
35,904
316.2
3.49
32,686
251.1
3.08
Short-term borrowings
6,260
97.2
6.16
12,195
170.4
5.60
Long-term debt
764
16.7
8.68
826
19.5
9.45
Qualifying debt
888
9.5
4.26
895
9.5
4.27
Total interest-bearing
liabilities
43,816
439.6
3.98
46,602
450.5
3.88
Interest cost of funding earning
assets
2.70
2.75
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
18,402
16,701
Other liabilities
1,052
1,183
Stockholders’ equity
5,854
5,652
Total liabilities and stockholders'
equity
$
69,124
$
70,138
Net interest income and margin (4)
$
587.0
3.67
%
$
550.3
3.42
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $8.9 million and $8.7 million for the three months ended
September 30, 2023 and June 30, 2023, respectively.
(2)
Included in the yield computation are net
loan fees of $28.0 million and $36.8 million for the three months
ended September 30, 2023 and June 30, 2023, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
September 30, 2023
September 30, 2022
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans held for sale
$
3,069
$
47.3
6.11
%
$
3,993
$
49.0
4.87
%
Loans held for investment:
Commercial and industrial
16,855
324.3
7.70
21,551
282.1
5.25
CRE - non-owner-occupied
9,950
196.1
7.83
8,128
111.4
5.44
CRE - owner-occupied
1,790
26.4
5.97
1,839
23.3
5.12
Construction and land development
4,545
110.3
9.63
3,471
59.5
6.80
Residential real estate
14,914
155.0
4.12
15,125
130.9
3.43
Consumer
73
1.4
7.43
63
0.8
5.32
Total loans HFI (1), (2), (3)
48,127
813.5
6.73
50,177
608.0
4.84
Securities:
Securities - taxable
8,272
101.1
4.85
6,680
56.4
3.35
Securities - tax-exempt
2,103
21.7
5.12
2,047
19.5
4.73
Total securities (1)
10,375
122.8
4.91
8,727
75.9
3.66
Cash and other
2,911
43.0
5.87
1,239
6.5
2.07
Total interest earning assets
64,482
1,026.6
6.37
64,136
739.4
4.62
Non-interest earning assets
Cash and due from banks
279
242
Allowance for credit losses
(334
)
(282
)
Bank owned life insurance
184
180
Other assets
4,513
4,100
Total assets
$
69,124
$
68,376
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
12,947
$
98.9
3.03
%
$
8,466
$
24.5
1.15
%
Savings and money market accounts
13,832
106.3
3.05
18,515
44.5
0.95
Certificates of deposit
9,125
111.0
4.83
2,843
8.6
1.19
Total interest-bearing deposits
35,904
316.2
3.49
29,824
77.6
1.03
Short-term borrowings
6,260
97.2
6.16
4,136
27.0
2.59
Long-term debt
764
16.7
8.68
1,228
23.8
7.69
Qualifying debt
888
9.5
4.26
891
8.9
3.94
Total interest-bearing
liabilities
43,816
439.6
3.98
36,079
137.3
1.51
Interest cost of funding earning
assets
2.70
0.84
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
18,402
25,865
Other liabilities
1,052
1,282
Stockholders’ equity
5,854
5,150
Total liabilities and stockholders'
equity
$
69,124
$
68,376
Net interest income and margin (4)
$
587.0
3.67
%
$
602.1
3.78
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $8.9 million and $8.5 million for the three months ended
September 30, 2023 and 2022, respectively.
(2)
Included in the yield computation are net
loan fees of $28.0 million and $31.9 million for the three months
ended September 30, 2023 and 2022, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Nine Months Ended
September 30, 2023
September 30, 2022
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
Interest earning assets
Loans HFS
$
3,858
$
183.8
6.37
%
$
4,939
$
142.5
3.86
%
Loans HFI:
Commercial and industrial
17,669
994.7
7.59
19,553
653.5
4.53
CRE - non-owner occupied
9,743
546.2
7.50
7,328
267.6
4.89
CRE - owner occupied
1,805
76.2
5.76
1,844
68.8
5.08
Construction and land development
4,399
307.1
9.34
3,301
148.9
6.03
Residential real estate
15,250
438.8
3.85
13,087
325.0
3.32
Consumer
73
3.9
7.14
58
2.0
4.57
Total loans HFI (1), (2), (3)
48,939
2,366.9
6.49
45,171
1,465.8
4.37
Securities:
Securities - taxable
7,609
267.7
4.70
6,300
127.5
2.71
Securities - tax-exempt
2,094
63.6
5.08
2,067
55.7
4.51
Total securities (1)
9,703
331.3
4.79
8,367
183.2
3.14
Other
2,941
114.3
5.20
1,646
12.0
0.97
Total interest earning assets
65,441
2,996.3
6.18
60,123
1,803.5
4.06
Non-interest earning assets
Cash and due from banks
268
250
Allowance for credit losses
(321
)
(270
)
Bank owned life insurance
183
180
Other assets
4,600
3,724
Total assets
$
70,171
$
64,007
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
11,800
$
247.4
2.80
%
$
8,188
$
35.2
0.57
%
Savings and money market accounts
15,006
308.9
2.75
18,474
70.6
0.51
Certificates of deposit
7,437
242.6
4.36
2,271
13.0
0.76
Total interest-bearing deposits
34,243
798.9
3.12
28,933
118.8
0.55
Short-term borrowings
8,578
355.2
5.54
2,745
37.4
1.82
Long-term debt
953
66.7
9.36
930
44.8
6.45
Qualifying debt
892
28.3
4.24
893
25.9
3.87
Total interest-bearing
liabilities
44,666
1,249.1
3.74
33,501
226.9
0.91
Interest cost of funding earning
assets
2.56
0.50
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
18,534
24,269
Other liabilities
1,272
1,183
Stockholders’ equity
5,699
5,054
Total liabilities and stockholders'
equity
$
70,171
$
64,007
Net interest income and margin (4)
$
1,747.2
3.62
%
$
1,576.6
3.56
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $26.4 million and $24.7 million for the nine ended September
30, 2023 and 2022, respectively.
(2)
Included in the yield computation are net
loan fees of $100.4 million and $97.4 million for the nine ended
September 30, 2023 and 2022, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate & Other
At September 30, 2023:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
14,920
$
11
$
125
$
14,784
Loans HFS
1,766
—
1,766
—
Loans HFI, net of deferred fees and
costs
49,447
28,720
20,727
—
Less: allowance for credit losses
(327
)
(277
)
(50
)
—
Net loans HFI
49,120
28,443
20,677
—
Other assets acquired through foreclosure,
net
8
8
—
—
Goodwill and other intangible assets,
net
672
292
380
—
Other assets
4,405
409
1,902
2,094
Total assets
$
70,891
$
29,163
$
24,850
$
16,878
Liabilities:
Deposits
$
54,287
$
22,643
$
25,094
$
6,550
Borrowings and qualifying debt
9,635
9
2,164
7,462
Other liabilities
1,223
136
264
823
Total liabilities
65,145
22,788
27,522
14,835
Allocated equity:
5,746
2,672
1,805
1,269
Total liabilities and stockholders'
equity
$
70,891
$
25,460
$
29,327
$
16,104
Excess funds provided (used)
—
(3,703
)
4,477
(774
)
No. of offices
56
46
8
2
No. of full-time equivalent employees
3,272
589
731
1,952
Income Statement:
Three Months Ended September 30,
2023:
(in millions)
Net interest income
$
587.0
$
331.5
$
243.8
$
11.7
Provision for (recovery of) credit
losses
12.1
14.1
(3.0
)
1.0
Net interest income after provision for
credit losses
574.9
317.4
246.8
10.7
Non-interest income
129.2
25.9
89.4
13.9
Non-interest expense
426.2
147.2
267.3
11.7
Income before income taxes
277.9
196.1
68.9
12.9
Income tax expense (benefit)
61.3
64.9
28.8
(32.4
)
Net income
$
216.6
$
131.2
$
40.1
$
45.3
Nine Months Ended September 30,
2023:
(in millions)
Net interest income
$
1,747.2
$
1,077.5
$
647.8
$
21.9
Provision for credit losses
53.3
29.7
0.4
23.2
Net interest income (expense) after
provision for credit losses
1,693.9
1,047.8
647.4
(1.3
)
Non-interest income
190.2
(40.1
)
226.6
3.7
Non-interest expense
1,161.5
430.9
691.6
39.0
Income (loss) before provision for income
taxes
722.6
576.8
182.4
(36.6
)
Income tax expense (benefit)
148.1
125.1
39.4
(16.4
)
Net income (loss)
$
574.5
$
451.7
$
143.0
$
(20.2
)
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate & Other
At December 31, 2022:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
9,803
$
12
$
—
$
9,791
Loans held for sale
1,184
—
1,184
—
Loans, net of deferred fees and costs
51,862
31,414
20,448
—
Less: allowance for credit losses
(310
)
(262
)
(48
)
—
Total loans
51,552
31,152
20,400
—
Other assets acquired through foreclosure,
net
11
11
—
—
Goodwill and other intangible assets,
net
680
293
387
—
Other assets
4,504
435
2,180
1,889
Total assets
$
67,734
$
31,903
$
24,151
$
11,680
Liabilities:
Deposits
$
53,644
$
29,494
$
18,492
$
5,658
Borrowings and qualifying debt
7,192
27
340
6,825
Other liabilities
1,542
83
656
803
Total liabilities
62,378
29,604
19,488
13,286
Allocated equity:
5,356
2,684
1,691
981
Total liabilities and stockholders'
equity
$
67,734
$
32,288
$
21,179
$
14,267
Excess funds provided (used)
—
385
(2,972
)
2,587
No. of offices
56
46
8
2
No. of full-time equivalent employees
3,365
671
785
1,909
Income Statement:
Three Months Ended September 30,
2022:
(in millions)
Net interest income
$
602.1
$
413.0
$
235.0
$
(45.9
)
Provision for credit losses
28.5
19.9
7.6
1.0
Net interest income (expense) after
provision for credit losses
573.6
393.1
227.4
(46.9
)
Non-interest income
61.8
16.1
44.2
1.5
Non-interest expense
305.8
111.0
178.4
16.4
Income (loss) before income taxes
329.6
298.2
93.2
(61.8
)
Income tax expense (benefit)
65.6
71.0
22.3
(27.7
)
Net income (loss)
$
264.0
$
227.2
$
70.9
$
(34.1
)
Nine Months Ended September 30,
2022:
(in millions)
Net interest income
$
1,576.6
$
1,118.3
$
637.7
$
(179.4
)
Provision for (recovery of) credit
losses
65.0
53.1
12.9
(1.0
)
Net interest income (expense) after
provision for credit losses
1,511.6
1,065.2
624.8
(178.4
)
Non-interest income
263.1
51.0
198.0
14.1
Non-interest expense
823.3
341.4
442.5
39.4
Income (loss) before income taxes
951.4
774.8
380.3
(203.7
)
Income tax expense (benefit)
187.1
184.4
90.8
(88.1
)
Net income (loss)
$
764.3
$
590.4
$
289.5
$
(115.6
)
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Unaudited
Pre-Provision Net Revenue by
Quarter:
Three Months Ended
9/30/2023
6/30/2023
3/31/2023
12/31/2022
9/30/2022
(in millions)
Net interest income
$
587.0
$
550.3
$
609.9
$
639.7
$
602.1
Total non-interest income
129.2
119.0
(58.0
)
61.5
61.8
Net revenue
$
716.2
$
669.3
$
551.9
$
701.2
$
663.9
Total non-interest expense
426.2
387.4
347.9
333.4
305.8
Pre-provision net revenue (1)
$
290.0
$
281.9
$
204.0
$
367.8
$
358.1
Less:
Provision for credit losses
12.1
21.8
19.4
3.1
28.5
Income tax expense
61.3
44.4
42.4
71.7
65.6
Net income
$
216.6
$
215.7
$
142.2
$
293.0
$
264.0
Pre-Provision Net Revenue,
Adjusted
Three Months Ended 3/31/2023:
(in millions)
Pre-provision net revenue (1)
$
204.0
Adjusted for:
Loss on sales of investment securities
12.5
Fair value loss adjustments, net
147.8
Gain on extinguishment of debt
(12.7
)
Pre-provision net revenue, Adjusted
(1)
$
351.6
Less:
Provision for credit losses
19.4
Income tax expense
42.4
Loss on sales of investment securities
12.5
Fair value loss adjustments, net
147.8
Plus: Gain on extinguishment of debt
12.7
Net income
$
142.2
Three Months Ended
9/30/2023
6/30/2023
3/31/2023
12/31/2022
9/30/2022
Efficiency Ratio (Tax Equivalent Basis)
by Quarter:
(dollars in millions)
Total non-interest expense
$
426.2
$
387.4
$
347.9
$
333.4
$
305.8
Less: Deposit costs
127.8
91.0
86.9
82.2
56.2
Total non-interest expense, excluding
deposit costs
298.4
296.4
261.0
251.2
249.6
Divided by:
Total net interest income
587.0
550.3
609.9
639.7
602.1
Plus:
Tax equivalent interest adjustment
8.9
8.7
8.8
9.0
8.5
Total non-interest income
129.2
119.0
(58.0
)
61.5
61.8
Less: Deposit costs
127.8
91.0
86.9
82.2
56.2
$
597.3
$
587.0
$
473.8
$
628.0
$
616.2
Efficiency ratio (2)
58.8
%
57.1
%
62.0
%
46.9
%
45.5
%
Efficiency ratio, adjusted for deposit
costs (2)
50.0
%
50.5
%
55.1
%
40.0
%
40.5
%
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Unaudited
Earnings per Share, Adjusted:
Three Months Ended 3/31/2023:
(in millions)
Net income available to common
stockholders
$
139.0
Adjusted for:
Loss on sales of investment securities
12.5
Fair value loss adjustments, net
147.8
Gain on extinguishment of debt
(12.7
)
Tax effect of adjustments
(37.9
)
Net income available to common
stockholders, adjusted
$
248.7
Diluted shares
108.3
Diluted earnings per share, adjusted
(1)
$
2.30
Tangible Common Equity:
9/30/2023
6/30/2023
3/31/2023
12/31/2022
9/30/2022
(dollars and shares in
millions)
Total stockholders' equity
$
5,746
$
5,685
$
5,521
$
5,356
$
5,021
Less:
Goodwill and intangible assets
672
674
677
680
682
Preferred stock
295
295
295
295
295
Total tangible common equity
4,779
4,716
4,549
4,381
4,044
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
3
Total tangible common equity, net of
tax
$
4,781
$
4,718
$
4,551
$
4,383
$
4,047
Total assets
$
70,891
$
68,160
$
71,047
$
67,734
$
69,165
Less: goodwill and intangible assets,
net
672
674
677
680
682
Tangible assets
70,219
67,486
70,370
67,054
68,483
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
3
Total tangible assets, net of
tax
$
70,221
$
67,488
$
70,372
$
67,056
$
68,486
Tangible common equity ratio (3)
6.8
%
7.0
%
6.5
%
6.5
%
5.9
%
Common shares outstanding
109.5
109.5
109.5
108.9
108.9
Tangible book value per share, net of tax
(3)
$
43.66
$
43.09
$
41.56
$
40.25
$
37.16
Non-GAAP Financial Measures
Footnotes
(1)
We believe this non-GAAP measurement is a
key indicator of the earnings power of the Company.
(2)
We believe this non-GAAP ratio provides a
useful metric to measure the efficiency of the Company.
(3)
We believe this non-GAAP metric provides
an important metric with which to analyze and evaluate the
financial condition and capital strength of the Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231018765435/en/
Western Alliance Bancorporation Dale Gibbons, 602-952-5476
Western Alliance Bancorp... (NYSE:WAL)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Western Alliance Bancorp... (NYSE:WAL)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024