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Section 1: 8-K (8-K)

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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 18, 2018
WESTERN ALLIANCE BANCORPORATION
(Exact name of registrant as specified in its charter)
Delaware
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On October 18, 2018, Western Alliance Bancorporation (the “Company”) issued a press release reporting results for the fiscal quarter ended September 30, 2018 and posted on its website its third quarter 2018 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 18, 2018.
99.2         Third Quarter 2018 Earnings Conference Call dated October 19, 2018.





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 18, 2018
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Western Alliance Bancorporation
 
395398792_wallogo01.jpg
One East Washington Street
 
Phoenix, AZ 85004
 
www.westernalliancebancorporation.com
 
 
 


PHOENIX--(BUSINESS WIRE)--October 18, 2018

THIRD QUARTER 2018 FINANCIAL RESULTS
Net income
 
Earnings per share
 
Net interest margin
 
Efficiency ratio
 
Book value per
common share
$111.1 million
 
$1.05
 
4.72%
 
46.6%
 
$23.51
CEO COMMENTARY:
“Western Alliance posted another solid quarter of earnings and balance sheet growth. Our strong commitment and deep relationship with our clients helps foster an environment where addressing their needs aligns well with our growth expectations,” said Chief Executive Officer, Kenneth Vecchione.
“Loan growth of $595 million was fully funded by deposit growth of $821 million, while net interest margin expanded two basis points to 4.72%. Asset quality was stable with net loan losses of 0.08% of total loans during the quarter and nonperforming assets of 0.26% of total assets. Our financial results have steadily climbed quarter-over-quarter, with net income of $111.1 million and earnings per share of $1.05 for the quarter, which has us well-positioned as we head into the final quarter of 2018.”
LINKED-QUARTER BASIS
YEAR-OVER-YEAR
 
 
FINANCIAL HIGHLIGHTS:
Net income and earnings per share of $111.1 million and $1.05 compared to $104.7 million and $0.99, respectively
Net operating revenue of $246.9 million constituting growth of 3.6%, or $8.7 million, compared to an increase in operating non-interest expenses of 2.3%, or $2.3 million1
Operating pre-provision net revenue of $141.9 million, up $6.4 million from $135.5 million1
Effective tax rate of 6.32%, compared to 19.48%, as management re-assessed its tax planning strategies and made a carryback election
 
Net income of $111.1 million and earnings per share of $1.05, compared to $82.8 million and $0.79, respectively
Net operating revenue of $246.9 million constituting year-over-year growth of 16.6%, or $35.2 million, compared to an increase in operating non-interest expenses of 18.0%, or $16.0 million1  
Operating pre-provision net revenue of $141.9 million, up $19.2 million from $122.7 million 1 
Effective tax rate of 6.32%, compared to 29.64%, due to the effect of the Tax Cuts and Jobs Act and carryback election

FINANCIAL POSITION RESULTS:
Total loans of $16.73 billion, up $595 million, or 14.7% annualized
Total deposits of $18.91 billion, up $821 million, or 18.2% annualized
Stockholders' equity of $2.49 billion, up $97 million
 
Increase in total loans of $2.21 billion, or 15.2%
Increase in total deposits of $2.00 billion, or 11.9%
Increase in stockholders' equity of $343 million
LOANS AND ASSET QUALITY:
Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.26%, compared to 0.29%
Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.07%

 
Nonperforming assets to total assets of 0.26%, compared to 0.42%
Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.01%
KEY PERFORMANCE METRICS:
Net interest margin of 4.72%, compared to 4.70%
Return on average assets and on tangible common equity1 of 2.07% and 20.57%, compared to 2.02% and 20.41%, respectively
Tangible common equity ratio of 10.0%, compared to 9.9% 1 
Tangible book value per share, net of tax, of $20.70, an increase from $19.78 1 
Operating efficiency ratio of 41.5%, compared to 42.1% 1 
 
Net interest margin of 4.72%, compared to 4.65%
Return on average assets and on tangible common equity1 of 2.07% and 20.57%, compared to 1.71% and 18.18%, respectively
Tangible common equity ratio of 10.0%, compared to 9.4% 1 
Tangible book value per share, net of tax, of $20.70, an increase of 18.1% from $17.53 1 
Operating efficiency ratio of 41.5%, compared to 40.0% 1 

1  
See reconciliation of Non-GAAP Financial Measures beginning on page 20.  

1



Income Statement
Net interest income was $234.0 million in the third quarter 2018, an increase of $9.9 million from $224.1 million in the second quarter 2018, and an increase of $32.5 million, or 16.1%, compared to the third quarter 2017. As acquired loans are recorded at fair value in an acquisition, purchase discounts on these acquired loans are recorded and accreted into interest income based on expected future cash flows over the life of the loans and may be accelerated upon prepayment of acquired loans. Net interest income in the third quarter 2018 includes $3.3 million of total accretion income from acquired loans, compared to $5.1 million in the second quarter 2018, and $7.5 million in the third quarter 2017.
The Company’s net interest margin in the third quarter 2018 was 4.72%, an increase from 4.70% in the second quarter 2018, and from 4.65% in the third quarter 2017. Adjusting net interest margin to include the effects of the Tax Cuts and Jobs Act ("TCJA"), which reduced the tax equivalent adjustment from tax-exempt securities and loans, results in adjusted net interest margin1 of 4.53% for the third quarter 2017.
Operating non-interest income was $12.9 million for the third quarter 2018, compared to $14.1 million for the second quarter 2018, and $10.1 million for the third quarter 2017.1 The decrease in operating non-interest income from the second quarter 2018 primarily relates to a decrease in income from equity investments. The increase in operating non-interest income for the third quarter 2018 compared to the same quarter in the prior year is due primarily to increases in lending related income of $1.3 million, card income of $0.6 million, and income from equity securities of $0.5 million.
Net operating revenue was $246.9 million for the third quarter 2018, an increase of $8.7 million, compared to $238.2 million for the second quarter 2018, and an increase of $35.2 million, or 16.6%, compared to $211.7 million for the third quarter 2017.1  
Operating non-interest expense was $105.0 million for the third quarter 2018, compared to $102.7 million for the second quarter 2018, and $89.0 million for the third quarter 2017.1 The Company’s operating efficiency ratio1 on a tax equivalent basis was 41.5% for the third quarter 2018, compared to 42.1% for the second quarter 2018, and 40.0% for the third quarter 2017. Adjusting the operating efficiency ratio1 to include the effects of the lower statutory corporate federal tax rate would result in an operating efficiency ratio of 41.0% for the third quarter 2017.
Income tax expense was $7.5 million for the third quarter 2018, compared to $25.3 million for the second quarter 2018, and $34.9 million for the third quarter 2017. Income tax expense for the second and third quarters of 2018 includes the effect of the Tax Cuts and Jobs Act, which lowered the statutory corporate tax rate from 35% to 21%. In addition, income tax expense for the third quarter 2018 includes the effect of management’s election to carryback to prior tax years the 2017 federal net operating losses ("NOL"), which resulted from the acceleration of deductions and deferral of revenue at the end of 2017. In the carryback taxable years to which the NOL will apply, the federal income tax rate was higher compared to those years to which the NOL would apply if it were carried forward.
Net income was $111.1 million for the third quarter 2018, an increase of $6.4 million from $104.7 million for the second quarter 2018, and an increase of $28.3 million, or 34.1%, from $82.8 million for the third quarter 2017. Earnings per share was $1.05 for the third quarter 2018, compared to $0.99 for the second quarter 2018, and $0.79 for the third quarter 2017.
The Company views its operating pre-provision net revenue ("PPNR") as a key metric for assessing the Company’s earnings power, which it defines as net operating revenue less operating non-interest expense. For the third quarter 2018, the Company’s operating PPNR was $141.9 million, up from $135.5 million in the second quarter 2018, and up 15.6% from $122.7 million in the third quarter 2017.1 The non-operating income items1 for the third quarter 2018 consisted of net losses on sales of investment securities of $7.2 million and net unrealized losses on assets measured at fair value of $1.2 million. The non-operating or non-recurring expense items1 for the third quarter 2018 consisted of a $7.6 million charitable contribution and a $1.2 million adjustment related to the Company's 401(k) plan and other miscellaneous items. These amounts were partially offset by a net gain on sales and valuations of repossessed and other assets of $0.1 million.
The Company had 1,795 full-time equivalent employees and 47 offices at September 30, 2018, compared to 1,773 employees and 47 offices at June 30, 2018, and 1,673 employees and 47 offices at September 30, 2017.











1 
See reconciliation of Non-GAAP Financial Measures beginning on page 20.

2



Balance Sheet
Gross loans totaled $16.73 billion at September 30, 2018, an increase of $595 million from $16.14 billion at June 30, 2018, and an increase of $2.21 billion from $14.52 billion at September 30, 2017. The increase from the prior quarter was driven by an increase of $282 million in residential real estate loans, $209 million in commercial and industrial loans, and $129 million in construction and land development loans. From September 30, 2017, loans increased across all loan types, with the largest increases in commercial and industrial loans of $750 million, residential real estate loans of $450 million, and construction and land development loans of $441 million. At September 30, 2018, the allowance for credit losses to gross loans held for investment was 0.90%, compared to 0.91% at June 30, 2018, and 0.94% at September 30, 2017. At September 30, 2018, the allowance for credit losses to total organic loans was 0.97%, compared to 0.99% at June 30, 2018, and 1.06% at September 30, 2017. The Company defines its organic loans as those loans that have not been acquired in a transaction accounted for as a business combination.
Consistent with accounting principles generally accepted in the United States ("GAAP"), the allowance for credit losses is not carried over in an acquisition because acquired loans are recorded at fair value, which discounts the loans based on expected future cash flows. Credit discounts on acquired loans are included as a reduction to gross loans. These discounts totaled $17.2 million at September 30, 2018, compared to $19.7 million at June 30, 2018, and $32.8 million at September 30, 2017.
Deposits totaled $18.91 billion at September 30, 2018, an increase of $821 million from $18.09 billion at June 30, 2018, and an increase of $2.00 billion from $16.90 billion at September 30, 2017. The increase from the prior quarter was driven by an increase of $590 million from savings and money market accounts and $114 million from demand deposits. From September 30, 2017, deposits increased across all deposit types, with the largest increases in savings and money market accounts of $759 million, demand deposits of $572 million, and non-interest bearing demand deposits of $406 million. Non-interest bearing deposits were $8.01 billion at September 30, 2018, compared to $7.95 billion at June 30, 2018, and $7.61 billion at September 30, 2017. Non-interest bearing deposits comprised 42.4% of total deposits at September 30, 2018, compared to 43.9% at June 30, 2018, and 45.0% at September 30, 2017. The proportion of savings and money market balances to total deposits was 37.3%, compared to 35.8% at June 30, 2018, and 37.3% at September 30, 2017. Certificates of deposit as a percentage of total deposits were 9.8% at September 30, 2018, compared to 10.0% at June 30, 2018, and 9.4% at September 30, 2017. The Company’s ratio of loans to deposits was 88.5% at September 30, 2018, compared to 89.2% at June 30, 2018, and 85.9% at September 30, 2017.
Borrowings were zero at September 30, 2018, compared to $75 million at June 30, 2018, and zero at September 30, 2017. The change in borrowings from the prior quarter is due to fluctuations in FHLB overnight advances.
Qualifying debt totaled $359 million at September 30, 2018, compared to $361 million at June 30, 2018, and $373 million at September 30, 2017.
Stockholders’ equity at September 30, 2018 was $2.49 billion, compared to $2.39 billion at June 30, 2018, and $2.15 billion at September 30, 2017.
At September 30, 2018, tangible common equity, net of tax, was 10.0% of tangible assets1 and total capital was 13.5% of risk-weighted assets. The Company’s tangible book value per share1 was $20.70 at September 30, 2018, up 18.1% from September 30, 2017.
Total assets increased 3.8% to $22.18 billion at September 30, 2018, from $21.37 billion at June 30, 2018, and increased 11.3% from $19.92 billion at September 30, 2017. The increase in total assets from the prior year relates primarily to organic loan growth.
Asset Quality
The provision for credit losses was $6.0 million for the third quarter 2018, compared to $5.0 million for both the second quarter 2018 and the third quarter 2017. Net loan charge-offs in the third quarter 2018 were $3.1 million, or 0.08% of average loans (annualized), compared to $2.6 million, or 0.07%, in the second quarter 2018, and $0.4 million, or 0.01%, in the third quarter 2017.
Nonaccrual loans increased $2.9 million to $36.9 million during the quarter and decreased $18.1 million during past twelve months. There were no loans past due 90 days and still accruing interest at each of the periods ended September 30, 2018 and June 30, 2018. At September 30, 2017, loans past due 90 days and still accruing interest totaled less than $0.1 million. Loans past due 30-89 days and still accruing interest totaled $9.4 million at quarter end, an increase from $1.5 million at June 30, 2018, and an increase from $5.2 million at September 30, 2017.
Repossessed assets totaled $20.0 million at September 30, 2018, a decrease of $7.5 million from $27.5 million at June 30, 2018, and a decrease of $9.0 million from $29.0 million at September 30, 2017. Adversely graded loans and non-performing assets totaled $358.3 million at September 30, 2018, a decrease of $10.2 million from $368.5 million at June 30, 2018, and a decrease of $47.9 million from $406.2 million at September 30, 2017.
As the Company’s capital increased, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 10.2% at September 30, 2018, compared to 10.1% at June 30, 2018, and 10.8% at September 30, 2017.1 






1
See reconciliation of Non-GAAP Financial Measures beginning on page 20.

3



Segment Highlights
The Company's reportable segments are aggregated primarily based on geographic location, services offered, and markets served. The Company's regional segments, which include Arizona, Nevada, Southern California, and Northern California provide full service banking and related services to their respective markets. The operations from the regional segments correspond to the following banking divisions: Alliance Bank of Arizona, Bank of Nevada and First Independent Bank, Torrey Pines Bank, and Bridge Bank.
The Company's National Business Lines ("NBL") segment provides specialized banking services to niche markets. The Company's NBL reportable segments include Homeowner Associations ("HOA") Services, Hotel Franchise Finance ("HFF"), Public & Nonprofit Finance, Technology & Innovation, and Other NBLs. These NBLs are managed centrally and are broader in geographic scope than our other segments, though still predominately located within our core market areas.
The Corporate & Other segment consists of corporate-related items, income and expense items not allocated to our other reportable segments, and inter-segment eliminations.
Key management metrics for evaluating the performance of the Company's Arizona, Nevada, Southern California, Northern California, and NBL segments include loan and deposit growth, asset quality, and pre-tax income.
The regional segments reported gross loan balances of $8.98 billion at September 30, 2018, an increase of $257 million during the quarter, and an increase of $1.03 billion during the last twelve months. The growth in loans during the quarter was driven by increases across all regional segments, with the largest increases in Southern California and Nevada of $88 million and $86 million, respectively. All regional segments contributed to the growth in loans during the last twelve months. The largest increases were $462 million in Arizona, $251 million in Nevada, and $243 million in Southern California. Total deposits for the regional segments were $13.68 billion, an increase of $562 million during the quarter, and an increase of $485 million during the last twelve months. During the quarter, Southern California and Northern California had the largest increases in deposits of $248 million and $167 million, respectively. During the last twelve months, Northern California and Arizona had increased deposits of $416 million and $134 million, respectively, which were partially offset by a decrease in deposits of $103 million in Nevada.
Pre-tax income for the regional segments was $87.2 million for the three months ended September 30, 2018, an increase of $1.3 million from the three months ended June 30, 2018, and an increase of $1.1 million from the three months ended September 30, 2017. Nevada, Northern California and Southern California had increases in pre-tax income of $1.8 million, $0.5 million, and $0.3 million respectively, compared to the three months ended June 30, 2018, which were partially offset by a decrease of $1.3 million in Arizona. Northern California and Arizona had increases in pre-tax income from the three months ended September 30, 2017 of $3.2 million and $0.7 million, respectively. These increases were partially offset by decreases of $1.9 million and $0.8 million in Nevada and Southern California, respectively. For the nine months ended September 30, 2018, the regional segments reported total pre-tax income of $259.1 million, an increase of $15.9 million compared to the nine months ended September 30, 2017. Arizona and Northern California had increases of $12.4 million and $6.1 million, respectively. These increases were partially offset by decreases of $2.1 million and $0.5 million in Southern California and Nevada, respectively.
The NBL segments reported gross loan balances of $7.75 billion at September 30, 2018, an increase of $335 million during the quarter, and an increase of $1.18 billion during the last twelve months. The largest increase in loans from the prior quarter relates to the Other NBLs segment, which increased loans by $461 million. This increase was partially offset by decreases in the Technology & Innovation and Public & Nonprofit Finance segments, which had decreases in loans from the prior quarter of $99 million and $46 million, respectively. During the last twelve months, the largest drivers of the increase in loans were Other NBLs, HFF, and Technology & Innovation segments, with increases of $970 million, $163 million, and $57 million, respectively. These increases were partially offset by a decrease in Public & Nonprofit Finance of $54 million. Total deposits for the NBL segments were $4.84 billion, an increase of $335 million during the quarter, and an increase of $1.23 billion during the last twelve months. The increase in deposits from the prior quarter primarily relates to the Technology & Innovation segment, which had an increase in deposits of $326 million. The increase of $1.23 billion during the last twelve months is the result of growth in both the Technology & Innovation and HOA Services segments of $860 million and $371 million, respectively.
Pre-tax income for the NBL segments was $51.4 million for the three months ended September 30, 2018, an increase of $2.7 million from the three months ended June 30, 2018, and an increase of $5.8 million from the three months ended September 30, 2017. The increase in pre-tax income from the prior quarter relates to the Technology & Innovation, HOA Services, and Public & Nonprofit Finance segments, which increased by $2.7 million, $1.7 million, and $0.5 million, respectively. These increases were partially offset by decreases in pre-tax income from the Other NBLs and HFF segments, which had decreases of $1.4 million and $0.8 million, respectively. The drivers of the increase in pre-tax income from the same period in the prior year were the Technology & Innovation, HOA Services, and Other NBL segments, which had increases of $5.2 million, $3.0 million, and $2.8 million, respectively. These increases were partially offset by decreases in pre-tax income for the Public & Nonprofit Finance and HFF segments, which decreased by $3.0 million and $2.0 million, respectively. Pre-tax income for the NBL segments for the nine months ended September 30, 2018 totaled $146.8 million, an increase of $21.1 million compared to the nine months ended September 30, 2017. The largest increases were in the Technology & Innovation, Other NBLs, and HOA Services segments. These segments had increases of $11.3 million, $11.1 million, and $6.6 million, respectively. These increases were partially offset by a decrease of $8.6 million in the Public & Nonprofit Finance segment.

4



Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its third quarter 2018 financial results at 12:00 p.m. ET on Friday, October 19, 2018. Participants may access the call by dialing 1-888-317-6003 and using passcode 7454025 or via live audio webcast using the website link https://services.choruscall.com/links/wa181019.html. The webcast is also available via the Company’s website at www.westernalliancebancorporation.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 2:00 p.m. ET October 19th through 9:00 a.m. ET November 19th by dialing 1-877-344-7529 passcode: 10124472.
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.
Adoption of Accounting Standards
During the first quarter 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities and ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.
The amendments in ASU 2014-09 create a common revenue standard and clarify the principles for recognizing revenue that can be applied consistently across various transactions, industries, and capital markets. Although this new accounting guidance brings considerable changes to how many companies account for revenue and disclose revenue-related information, the effect on the Company has not been significant as substantially all of the Company's revenue is generated from interest income related to loans and investment securities, which are not within the scope of this guidance. For the Company's revenue streams that are within the scope of this guidance, the guidance was adopted on January 1, 2018 using the modified retrospective method. Upon adoption, the Company's accounting policies did not change materially as the principles of revenue recognition in the ASU are largely consistent with current practices applied by the Company.
The amendments in ASU 2016-01 require that equity investments be measured at fair value with changes in fair value recognized in net income, rather than accumulated other comprehensive income. Upon adoption of the new accounting guidance, on January 1, 2018, the Company recorded a cumulative-effect adjustment of $0.4 million to decrease accumulated other comprehensive income with a corresponding increase to opening retained earnings. During the nine months ended September 30, 2018, the Company recognized a loss of $3.0 million related to fair value changes in equity securities.
The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings from tax effects resulting from the TCJA so that tax effects of items within other comprehensive income reflect the current tax rate. Previously, the effect of a change in tax laws or rates on deferred tax liabilities and assets were included in income from continuing operations even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in comprehensive income. Upon adoption of the new accounting guidance, on January 1, 2018, the Company recorded a cumulative-effect adjustment of $0.6 million to decrease accumulated other comprehensive income with a corresponding increase to opening retained earnings.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding our expectations with regard to our business, financial and operating results, and future economic performance, including our recent domestic select-service hotel franchise finance loan portfolio acquisition. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include, among others: the risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities, including expansion through acquisitions; additional regulatory requirements resulting from our continued growth; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.

5



About Western Alliance Bancorporation
With more than $20 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies and is ranked #2 on the Forbes 2018 “Best Banks in America” list. Its primary subsidiary, Western Alliance Bank, Member FDIC, is the go-to bank for business and succeeds with local teams of experienced bankers who deliver superior service and a full spectrum of customized loan, deposit and treasury management capabilities. Business clients also benefit from a powerful array of specialized financial services that provide strong expertise and tailored solutions for a wide variety of industries and sectors. A national presence with a regional footprint, Western Alliance Bank operates individually branded, full-service banking divisions with offices in key markets nationwide. For more information, visit westernalliancebank.com

6



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Summary Consolidated Financial Data
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30,
 
 
 
 
 
 
 
 
2018
 
2017
 
Change %
 
 
 
 
 
 
(in millions)
 
 
Total assets
 
 
 
 
 
 
 
$
22,176.1

 
$
19,922.2

 
11.3
 %
Gross loans, net of deferred fees
 
 
 
 
 
 
 
16,732.8

 
14,521.9

 
15.2

Securities and money market investments
 
 
 
 
 
 
 
3,633.7

 
3,773.6

 
(3.7
)
Total deposits
 
 
 
 
 
 
 
18,908.6

 
16,904.8

 
11.9

Qualifying debt
 
 
 
 
 
 
 
359.1

 
372.9

 
(3.7
)
Stockholders' equity
 
 
 
 
 
 
 
2,488.4

 
2,145.6

 
16.0

Tangible common equity, net of tax (1)
 
 
 
 
 
 
 
2,191.3

 
1,848.8

 
18.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Income Statement Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
 
2018
 
2017
 
Change %
 
2018
 
2017
 
Change %
 
 
(in thousands, except per share data)
 
 
 
(in thousands, except per share data)
 
 
Interest income
 
$
265,216

 
$
217,836

 
21.8
 %
 
$
751,515

 
$
617,054

 
21.8
 %
Interest expense
 
31,178

 
16,253

 
91.8

 
79,149

 
43,419

 
82.3

Net interest income
 
234,038

 
201,583

 
16.1

 
672,366

 
573,635

 
17.2

Provision for credit losses
 
6,000

 
5,000

 
20.0

 
17,000

 
12,250

 
38.8

Net interest income after provision for credit losses
 
228,038

 
196,583

 
16.0

 
655,366

 
561,385

 
16.7

Non-interest income
 
4,418

 
10,456

 
(57.7
)
 
29,505

 
31,656

 
(6.8
)
Non-interest expense
 
113,841

 
89,296

 
27.5

 
314,538

 
265,543

 
18.5

Income before income taxes
 
118,615

 
117,743

 
0.7

 
370,333

 
327,498

 
13.1

Income tax expense
 
7,492

 
34,899

 
(78.5
)
 
53,631

 
91,352

 
(41.3
)
Net income
 
$
111,123

 
$
82,844

 
34.1

 
$
316,702

 
$
236,146

 
34.1

Diluted earnings per share
 
$
1.05

 
$
0.79

 
32.9

 
$
3.00

 
$
2.25

 
33.3


(1)    See Reconciliation of Non-GAAP Financial Measures.
NM    Changes +/- 100% are not meaningful.




7



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,
 
 
2018
 
2017
 
Change %
 
2018
 
2017
 
Change %
Diluted earnings per share
 
$
1.05

 
$
0.79

 
32.9
%
 
$
3.00

 
$
2.25

 
33.3
%
Book value per common share
 
23.51

 
20.34

 
15.6

 
 
 
 
 
 
Tangible book value per share, net of tax (1)
 
20.70

 
17.53

 
18.1

 
 
 
 
 
 
Average shares outstanding
(in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
104,768

 
104,221

 
0.5

 
104,664

 
104,124

 
0.5

Diluted
 
105,448

 
104,942

 
0.5

 
105,398

 
104,941

 
0.4

Common shares outstanding
 
105,865

 
105,493

 
0.4

 
 
 
 
 
 
Selected Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets (2)
 
2.07
%
 
1.71
%
 
21.1
 %
 
2.02
%
 
1.70
%
 
18.8
%
Return on average tangible common equity (1, 2)
 
20.57

 
18.18

 
13.1

 
20.47

 
18.15

 
12.8

Net interest margin (2)
 
4.72

 
4.65

 
1.5

 
4.67

 
4.63

 
0.9

Operating efficiency ratio - tax equivalent basis (1)
 
41.5

 
40.0

 
3.8

 
42.1

 
41.8

 
0.7

Loan to deposit ratio
 
88.49

 
85.90

 
3.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans outstanding (2)
 
0.08
%
 
0.01
%
 
NM

 
0.06
%
 
0.01
%
 
NM

Nonaccrual loans to gross loans
 
0.22

 
0.38

 
(42.1
)
 
 
 
 
 
 
Nonaccrual loans and repossessed assets to total assets
 
0.26

 
0.42

 
(38.1
)
 
 
 
 
 
 
Allowance for credit losses to gross loans
 
0.90

 
0.94

 
(4.3
)
 
 
 
 
 
 
Allowance for credit losses to nonaccrual loans
 
406.89

 
248.07

 
64.0

 
 
 
 
 
 
Capital Ratios (1):
 
 
 
 
 
 
 
 
Sep 30, 2018
 
Jun 30, 2018
 
Sep 30, 2017
Tangible common equity (1)
 
10.0
%
 
9.9
%
 
9.4
%
Common Equity Tier 1 (1), (3)
 
10.9

 
10.7

 
10.4

Tier 1 Leverage ratio (1), (3)
 
11.0

 
10.8

 
10.1

Tier 1 Capital (1), (3)
 
11.3

 
11.1

 
10.8

Total Capital (1), (3)
 
13.5

 
13.4

 
13.3


(1)    See Reconciliation of Non-GAAP Financial Measures.
(2)    Annualized for the three and nine months ended September 30, 2018 and 2017.
(3)    Capital ratios for September 30, 2018 are preliminary until the Call Report is filed.
NM    Changes +/- 100% are not meaningful.







8



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
Condensed Consolidated Income Statements
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
(dollars in thousands, except per share data)
Interest income:
 
 
 
 
 
 
 
 
Loans
 
$
234,709

 
$
191,096

 
$
662,703

 
$
547,306

Investment securities
 
27,239

 
23,584

 
81,305

 
62,327

Other
 
3,268

 
3,156

 
7,507

 
7,421

Total interest income
 
265,216

 
217,836

 
751,515

 
617,054

Interest expense:
 
 
 
 
 
 
 
 
Deposits
 
25,266

 
11,449

 
59,288

 
29,506

Qualifying debt
 
5,794

 
4,708

 
16,458

 
13,539

Borrowings
 
118

 
96

 
3,403

 
374

Total interest expense
 
31,178

 
16,253

 
79,149

 
43,419

Net interest income
 
234,038

 
201,583

 
672,366

 
573,635

Provision for credit losses
 
6,000

 
5,000

 
17,000

 
12,250

Net interest income after provision for credit losses
 
228,038

 
196,583

 
655,366

 
561,385

Non-interest income:
 
 
 
 
 
 
 
 
Service charges and fees
 
5,267

 
5,248

 
16,684

 
15,189

Card income
 
2,138

 
1,509

 
6,143

 
4,517

Income from equity investments
 
1,440

 
967

 
5,417

 
2,977

Lending related income and gains (losses) on sale of loans, net
 
1,422

 
97

 
3,447

 
746

Foreign currency income
 
1,092

 
756

 
3,475

 
2,630

Income from bank owned life insurance
 
868

 
975

 
2,963

 
2,896

(Loss) gain on sales of investment securities, net
 
(7,232
)
 
319

 
(7,232
)
 
907

Unrealized (losses) gains on assets measured at fair value, net
 
(1,212
)
 

 
(2,971
)
 
(1
)
Other
 
635

 
585

 
1,579

 
1,795

Total non-interest income
 
4,418

 
10,456

 
29,505

 
31,656

Non-interest expenses:
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
64,762

 
52,747

 
188,680

 
156,640

Legal, professional, and directors' fees
 
7,907

 
6,038

 
21,856

 
23,324

Occupancy
 
7,406

 
7,507

 
21,671

 
21,328

Data processing
 
5,895

 
4,524

 
16,688

 
14,163

Deposit costs
 
4,848

 
2,904

 
11,888

 
6,778

Insurance
 
3,712

 
3,538

 
11,466

 
10,355

Business development
 
1,381

 
1,439

 
4,523

 
4,949

Card expense
 
1,282

 
966

 
3,305

 
2,558

Loan and repossessed asset expenses
 
1,230

 
1,263

 
2,830

 
3,639

Marketing
 
687

 
776

 
2,429

 
2,628

Intangible amortization
 
398

 
489

 
1,195

 
1,666

Net (gain) loss on sales and valuations of repossessed and other assets
 
(67
)
 
266

 
(1,474
)
 
(46
)
Other
 
14,400

 
6,839

 
29,481

 
17,561

Total non-interest expense
 
113,841

 
89,296

 
314,538

 
265,543

Income before income taxes
 
118,615

 
117,743

 
370,333

 
327,498

Income tax expense
 
7,492

 
34,899

 
53,631

 
91,352

Net income
 
$
111,123

 
$
82,844

 
$
316,702

 
$
236,146

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
Diluted shares
 
105,448

 
104,942

 
105,398

 
104,941

Diluted earnings per share
 
$
1.05

 
$
0.79

 
$
3.00

 
$
2.25





9



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
Five Quarter Condensed Consolidated Income Statements
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
 
(in thousands, except per share data)
Interest income:
 
 
 
 
 
 
 
 
 
 
Loans
 
$
234,709

 
$
222,035

 
$
205,959

 
$
200,204

 
$
191,096

Investment securities
 
27,239

 
27,445

 
26,621

 
26,312

 
23,584

Other
 
3,268

 
2,122

 
2,117

 
1,943

 
3,156

Total interest income
 
265,216

 
251,602

 
234,697

 
228,459

 
217,836

Interest expense:
 
 
 
 
 
 
 
 
 
 
Deposits
 
25,266

 
19,849

 
14,173

 
12,459

 
11,449

Qualifying debt
 
5,794

 
5,695

 
4,969

 
4,734

 
4,708

Borrowings
 
118

 
1,950

 
1,335

 
237

 
96

Total interest expense
 
31,178

 
27,494

 
20,477

 
17,430

 
16,253

Net interest income
 
234,038

 
224,108

 
214,220

 
211,029

 
201,583

Provision for credit losses
 
6,000

 
5,000

 
6,000

 
5,000

 
5,000

Net interest income after provision for credit losses
 
228,038

 
219,108

 
208,220

 
206,029

 
196,583

Non-interest income:
 
 
 
 
 
 
 
 
 
 
Service charges and fees
 
5,267

 
5,672

 
5,745

 
5,157

 
5,248

Card income
 
2,138

 
2,033

 
1,972

 
1,796

 
1,509

Income from equity investments
 
1,440

 
2,517

 
1,460

 
1,519

 
967

Lending related income and gains (losses) on sale of loans, net
 
1,422

 
1,047

 
978

 
1,466

 
97

Foreign currency income
 
1,092

 
1,181

 
1,202

 
906

 
756

Income from bank owned life insurance
 
868

 
1,167

 
928

 
965

 
975

(Loss) gain on sales of investment securities, net
 
(7,232
)
 

 

 
1,436

 
319

Unrealized (losses) gains on assets measured at fair value, net
 
(1,212
)
 
(685
)
 
(1,074
)
 

 

Other
 
635

 
512

 
432

 
443

 
585

Total non-interest income
 
4,418

 
13,444

 
11,643

 
13,688

 
10,456

Non-interest expenses:
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
64,762

 
61,785

 
62,133

 
57,704

 
52,747

Legal, professional, and directors' fees
 
7,907

 
7,946

 
6,003

 
6,490

 
6,038

Occupancy
 
7,406

 
7,401

 
6,864

 
6,532

 
7,507

Data processing
 
5,895

 
5,586

 
5,207

 
5,062

 
4,524

Deposit costs
 
4,848

 
4,114

 
2,926

 
2,953

 
2,904

Insurance
 
3,712

 
3,885

 
3,869

 
3,687

 
3,538

Business development
 
1,381

 
1,414

 
1,728

 
1,179

 
1,439

Card expense
 
1,282

 
1,081

 
942

 
855

 
966

Loan and repossessed asset expenses
 
1,230

 
1,017

 
583

 
978

 
1,263

Marketing
 
687

 
1,146

 
596

 
1,176

 
776

Intangible amortization
 
398

 
399

 
398

 
408

 
489

Net (gain) loss on sales and valuations of repossessed and other assets
 
(67
)
 
(179
)
 
(1,228
)
 
(34
)
 
266

Other
 
14,400

 
6,953

 
8,128

 
8,408

 
6,839

Total non-interest expense
 
113,841

 
102,548

 
98,149

 
95,398

 
89,296

Income before income taxes
 
118,615

 
130,004

 
121,714

 
124,319

 
117,743

Income tax expense
 
7,492

 
25,325

 
20,814

 
34,973

 
34,899

Net income
 
$
111,123

 
$
104,679

 
$
100,900

 
$
89,346

 
$
82,844

 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
Diluted shares
 
105,448

 
105,420

 
105,324

 
105,164

 
104,942

Diluted earnings per share
 
$
1.05

 
$
0.99

 
$
0.96

 
$
0.85

 
$
0.79



10




Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Five Quarter Condensed Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
 
(in millions, except per share data)
Assets:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
700.5

 
$
506.8

 
$
439.4

 
$
416.8

 
$
650.4

Securities and money market investments
 
3,633.7

 
3,688.7

 
3,734.3

 
3,820.4

 
3,773.6

Loans held for sale
 

 

 

 

 
16.3

Loans held for investment:
 
 
 
 
 
 
 
 
 
 
Commercial
 
7,487.7

 
7,278.4

 
6,944.4

 
6,841.4

 
6,735.9

Commercial real estate - non-owner occupied
 
3,953.0

 
4,010.6

 
3,925.3

 
3,904.0

 
3,628.4

Commercial real estate - owner occupied
 
2,288.2

 
2,270.5

 
2,264.6

 
2,241.6

 
2,047.5

Construction and land development
 
2,107.6

 
1,978.3

 
1,957.5

 
1,632.2

 
1,666.4

Residential real estate
 
827.1

 
545.3

 
418.1

 
425.9

 
376.7

Consumer
 
69.2

 
55.2

 
50.5

 
48.8

 
50.7

Gross loans, net of deferred fees
 
16,732.8

 
16,138.3


15,560.4

 
15,093.9

 
14,505.6

Allowance for credit losses
 
(150.0
)
 
(147.1
)
 
(144.7
)
 
(140.0
)
 
(136.4
)
Loans, net
 
16,582.8

 
15,991.2

 
15,415.7

 
14,953.9

 
14,369.2

Premises and equipment, net
 
119.2

 
115.4

 
116.7

 
118.7

 
120.1

Other assets acquired through foreclosure, net
 
20.0

 
27.5

 
30.2

 
28.5

 
29.0

Bank owned life insurance
 
169.2

 
168.7

 
168.6

 
167.8

 
166.8

Goodwill and other intangibles, net
 
299.5

 
300.0

 
300.4

 
300.7

 
301.2

Other assets
 
651.2

 
569.2

 
555.4

 
522.3

 
495.6

Total assets
 
$
22,176.1

 
$
21,367.5

 
$
20,760.7

 
$
20,329.1

 
$
19,922.2

Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
 
Non-interest bearing demand deposits
 
$
8,014.7

 
$
7,947.9

 
$
7,502.0

 
$
7,434.0

 
$
7,608.7

Interest bearing:
 
 
 
 
 
 
 
 
 
 
Demand
 
1,978.4

 
1,864.6

 
1,776.3

 
1,586.2

 
1,406.4

Savings and money market
 
7,059.1

 
6,468.8

 
6,314.9

 
6,330.9

 
6,300.2

Time certificates
 
1,856.4

 
1,806.2

 
1,761.3

 
1,621.4

 
1,589.5

Total deposits
 
18,908.6

 
18,087.5

 
17,354.5

 
16,972.5

 
16,904.8

Customer repurchase agreements
 
20.9

 
18.0

 
21.7

 
26.0

 
26.1

Total customer funds
 
18,929.5

 
18,105.5

 
17,376.2

 
16,998.5

 
16,930.9

Borrowings
 

 
75.0

 
300.0

 
390.0

 

Qualifying debt
 
359.1

 
361.1

 
363.9

 
376.9

 
372.9

Accrued interest payable and other liabilities
 
399.1

 
434.2

 
426.9

 
334.0

 
472.8

Total liabilities
 
19,687.7

 
18,975.8

 
18,467.0

 
18,099.4

 
17,776.6

Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
Common stock and additional paid-in capital
 
1,392.6

 
1,387.9

 
1,385.0

 
1,384.3

 
1,378.8

Retained earnings
 
1,166.2

 
1,055.1

 
950.4

 
848.5

 
758.6

Accumulated other comprehensive (loss) income
 
(70.4
)
 
(51.3
)
 
(41.7
)
 
(3.1
)
 
8.2

Total stockholders' equity
 
2,488.4

 
2,391.7

 
2,293.7

 
2,229.7

 
2,145.6

Total liabilities and stockholders' equity
 
$
22,176.1

 
$
21,367.5

 
$
20,760.7

 
$
20,329.1

 
$
19,922.2



11



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Changes in the Allowance For Credit Losses
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Sept 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sept 30, 2017
 
 
(in thousands)
Balance, beginning of period
 
$
147,083

 
$
144,659

 
$
140,050

 
$
136,421

 
$
131,811

Provision for credit losses
 
6,000

 
5,000

 
6,000

 
5,000

 
5,000

Recoveries of loans previously charged-off:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
362

 
916

 
459

 
406

 
619

Commercial real estate - non-owner occupied
 
804

 
15

 
105

 
58

 
1,168

Commercial real estate - owner occupied
 
52

 
231

 
21

 
119

 
613

Construction and land development
 
24

 
8

 
1,388

 
218

 
226

Residential real estate
 
440

 
141

 
250

 
120

 
108

Consumer
 
11

 
14

 
10

 
3

 
33

Total recoveries
 
1,693

 
1,325

 
2,233

 
924

 
2,767

Loans charged-off:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
4,610

 
2,777

 
3,517

 
2,019

 
2,921

Commercial real estate - non-owner occupied
 

 
233

 

 
275

 
175

Commercial real estate - owner occupied
 

 

 

 

 

Construction and land development
 

 
1

 

 

 

Residential real estate
 
46

 
885

 
107

 

 

Consumer
 
109

 
5

 

 
1

 
61

Total loans charged-off
 
4,765

 
3,901

 
3,624

 
2,295

 
3,157

Net loan charge-offs
 
3,072

 
2,576

 
1,391

 
1,371

 
390

Balance, end of period
 
$
150,011

 
$
147,083

 
$
144,659

 
$
140,050

 
$
136,421

 
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans- annualized
 
0.08
%
 
0.07
%
 
0.04
%
 
0.04
%
 
0.01
%
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to gross loans
 
0.90
%
 
0.91
%
 
0.93
%
 
0.93
%
 
0.94
%
Allowance for credit losses to gross organic loans
 
0.97

 
0.99

 
1.02

 
1.03

 
1.06

Allowance for credit losses to nonaccrual loans
 
406.89

 
432.38

 
387.86

 
318.84

 
248.07

 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
36,868

 
$
34,017

 
$
37,297

 
$
43,925

 
$
54,994

Nonaccrual loans to gross loans
 
0.22
%
 
0.21
%
 
0.24
%
 
0.29
%
 
0.38
%
Repossessed assets
 
$
20,028

 
$
27,541

 
$
30,194

 
$
28,540

 
$
28,973

Nonaccrual loans and repossessed assets to total assets
 
0.26
%
 
0.29
%
 
0.33
%
 
0.36
%
 
0.42
%
 
 
 
 
 
 
 
 
 
 
 
Loans past due 90 days, still accruing
 
$

 
$

 
$
37

 
$
43

 
$
44

Loans past due 90 days and still accruing to gross loans
 
%
 
%
 
0.00
%
 
0.00
%
 
0.00
%
Loans past due 30 to 89 days, still accruing
 
$
9,360

 
$
1,545

 
$
6,479

 
$
10,142

 
$
5,179

Loans past due 30 to 89 days, still accruing to gross loans
 
0.06
%
 
0.01
%
 
0.04
%
 
0.07
%
 
0.04
%
 
 
 
 
 
 
 
 
 
 
 
Special mention loans
 
$
124,689

 
$
150,278

 
$
184,702

 
$
155,032

 
$
199,965

Special mention loans to gross loans
 
0.75
%
 
0.93
%
 
1.19
%
 
1.03
%
 
1.38
%
 
 
 
 
 
 
 
 
 
 
 
Classified loans on accrual
 
$
176,727

 
$
156,659

 
$
126,538

 
$
127,681

 
$
122,264

Classified loans on accrual to gross loans
 
1.06
%
 
0.97
%
 
0.81
%
 
0.85
%
 
0.84
%
Classified assets
 
$
252,770

 
$
240,063

 
$
213,482

 
$
222,004

 
$
221,803

Classified assets to total assets
 
1.14
%
 
1.12
%
 
1.03
%
 
1.09
%
 
1.11
%


12



Western Alliance Bancorporation and Subsidiaries