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Section 1: 8-K (8-K)

Document


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):  July 18, 2019


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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.0001 Par Value
 
WAL
 
New York Stock Exchange
6.25% Subordinated Debentures due 2056
 
WALA
 
New York Stock Exchange

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 July 18, 2019, Western Alliance Bancorporation (the “Company”) issued a press release reporting results for the fiscal quarter ended June 30, 2019 and posted on its website its second quarter 2019 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 July 18, 2019.
99.2         Second Quarter 2019 Earnings Conference Call dated July 19, 2019.





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:
July 18, 2019
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Western Alliance Bancorporation
 
398796393_wallogo07.jpg
One East Washington Street
 
Phoenix, AZ 85004
 
www.westernalliancebancorporation.com
 
 
 


PHOENIX--(BUSINESS WIRE)--July 18, 2019

SECOND QUARTER 2019 FINANCIAL RESULTS
Net income
 
Earnings per share
 
Net interest margin2
 
Efficiency ratio
 
Book value per
common share
$122.9 million
 
$1.19
 
4.59%
 
41.5%
 
$27.51
CEO COMMENTARY:
Kenneth Vecchione, Chief Executive Officer, commented: “During the second quarter Western Alliance generated a record $122.9 million in net income and earnings per share of $1.19. We reached a new milestone of $25 billion in total assets as both loan and deposit growth exceeded $1 billion, representing 25% annualized growth. As our loan growth trajectory continues, asset quality remains strong and stable with net loan losses of just 0.03% for the quarter and non-performing assets to total assets ratio of 0.27%. We generated 12% annualized growth in net interest income, absorbing the 12 basis point margin impact from lower rates, from our strong balance sheet growth. We remain among the most profitable banks in our industry, with return on assets of 2.05% and return on average tangible common equity1 of 19.72%. Further, we continued our shareholder-oriented approach to capital allocation with share repurchases of $33.9 million during the quarter while our board also approved a cash dividend of $0.25 per share to be initiated during the third quarter of 2019. Our superior capital growth, evidenced by industry-leading capital levels and tangible book value per share, continues to optimally position our company for growth and value creation.”
LINKED-QUARTER BASIS
YEAR-OVER-YEAR
 
 
FINANCIAL HIGHLIGHTS:
Net income and earnings per share of $122.9 million and $1.19 compared to $120.8 million and $1.16, respectively
Net operating revenue1 of $267.3 million, an increase of 2.9%, or $7.4 million, compared to an increase in operating non-interest expenses1 of 1.8%, or $2.0 million
Operating pre-provision net revenue1 of $152.5 million, up $5.4 million from $147.1 million
Effective tax rate of 16.76%, compared to 17.45%
 
Net income of $122.9 million and earnings per share of $1.19, up 17.4% and 20.2%, respectively
Net operating revenue1 of $267.3 million, an increase of 12.2%, or $29.1 million, compared to an increase in operating non-interest expenses1 of 11.8%, or $12.1 million
Operating pre-provision net revenue1 of $152.5 million, up $17.0 million from $135.5 million
Effective tax rate of 16.76%, compared to 19.48%
FINANCIAL POSITION RESULTS:
Total loans of $19.3 billion, up $1.1 billion, or 25.0% annualized
Total deposits of $21.4 billion, up $1.2 billion, or 24.4% annualized
Stockholders' equity of $2.9 billion, up $131 million
 
Increase in total loans of $3.1 billion, or 19.3%
Increase in total deposits of $3.4 billion, or 18.5%
Increase in stockholders' equity of $460 million

LOANS AND ASSET QUALITY:
Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.27%, compared to 0.26%
Annualized net loan charge-offs to average loans outstanding of 0.03% compared to 0.03%

 
Nonperforming assets to total assets of 0.27%, compared to 0.29%
Annualized net loan charge-offs2 to average loans outstanding of 0.03%, compared to 0.07%
KEY PERFORMANCE METRICS:
Net interest margin of 4.59% compared to 4.71%
Return on average assets and on tangible common equity1 of 2.05% and 19.72%, compared to 2.12% and 20.49%, respectively
Tangible common equity ratio1 of 10.2%, compared to 10.3%
Tangible book value per share1, net of tax, of $24.65, an increase from $23.20
Operating efficiency ratio1 of 42.0%, compared to 42.4%

 
Net interest margin2 of 4.59%, compared to 4.71%
Return on average assets2 and on tangible common equity1,2 of 2.05% and 19.72%, compared to 2.02% and 20.47%, respectively
Tangible common equity ratio1 of 10.2%, compared to 9.9%
Tangible book value per share1, net of tax, of $24.65, an increase of 24.6% from $19.78
Operating efficiency ratio1 of 42.0%, compared to 42.1%


1  
See reconciliation of Non-GAAP Financial Measures beginning on page 19.  
2 
Beginning in Q1 2019, annualized performance metrics are calculated on an actual/actual basis, from a previous 30/360 basis. Prior period amounts have been restated to conform to the current presentation.


1



Income Statement
Net interest income was $254.7 million in the second quarter 2019, an increase of $7.3 million from $247.3 million in the first quarter 2019, and an increase of $30.6 million, or 13.6%, compared to the second quarter 2018. 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 second quarter 2019 includes $4.6 million of total accretion income from acquired loans, compared to $2.8 million in the first quarter 2019, and $5.1 million in the second quarter 2018.
The Company’s net interest margin in the second quarter 2019 was 4.59%, a decrease from 4.71% in both the first quarter 2019 and second quarter 2018.
Operating non-interest income was $12.6 million for the second and first quarter 2019, compared to $14.1 million for the second quarter 2018.1 The decrease in operating non-interest income from the second quarter 2018 primarily relates to a decrease in income from warrants.
Net operating revenue was $267.3 million for the second quarter 2019, an increase of $7.4 million, compared to $259.9 million for the first quarter 2019, and an increase of $29.1 million, or 12.2%, compared to $238.2 million for the second quarter 2018.1  
Operating non-interest expense was $114.8 million for the second quarter 2019, compared to $112.8 million for the first quarter 2019, and $102.7 million for the second quarter 2018.1 The Company’s operating efficiency ratio1 was 42.0% for the second quarter 2019, an improvement from 42.4% in the first quarter 2019, and from 42.1% for the second quarter 2018.
Income tax expense was $24.8 million for the second quarter 2019, compared to $25.5 million for the first quarter 2019, and $25.3 million for the second quarter 2018.
Net income was $122.9 million for the second quarter 2019, an increase of $2.1 million from $120.8 million for the first quarter 2019, and an increase of $18.3 million, or 17.4%, from $104.7 million for the second quarter 2018. Earnings per share was $1.19 for the second quarter 2019, compared to $1.16 for the first quarter 2019, and $0.99 for the second quarter 2018.
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 second quarter 2019, the Company’s operating PPNR was $152.5 million, up $5.4 million from $147.1 million in the first quarter 2019, and up $17.0 million from $135.5 million in the second quarter 2018.1 Non-operating income1 for the second quarter 2019 consisted of net unrealized gains on assets measured at fair value of $1.6 million. Non-operating expense1 for the second quarter 2019 consisted of a net gain on sales and valuations of repossessed and other assets of $0.6 million.
The Company had 1,806 full-time equivalent employees and 47 offices at June 30, 2019, compared to 1,773 employees and 47 offices at March 31, 2019 and June 30, 2018.
















1 
See reconciliation of Non-GAAP Financial Measures beginning on page 19.

2



Balance Sheet
Gross loans totaled $19.3 billion at June 30, 2019, an increase of $1.1 billion from $18.1 billion at March 31, 2019, and an increase of $3.1 billion from $16.1 billion at June 30, 2018. The increase from the prior quarter was driven by an increase of $730 million in commercial and industrial loans, $381 million in CRE, non-owner occupied loans, and $119 million in residential real estate loans. These increases were partially offset by a decrease of $73 million in construction and land development loans, and $31 million in CRE, owner occupied. From June 30, 2018, loans increased across most loan types, with the largest increases in commercial and industrial loans of $1.2 billion, residential real estate loans of $1.0 billion, CRE, non-owner occupied loans of $675 million, and construction and land development loans of $232 million. These increases were partially offset by a decrease of $16 million in CRE, owner occupied loans. At June 30, 2019, the allowance for credit losses to gross loans held for investment was 0.83%, compared to 0.86% at March 31, 2019, and 0.91% at June 30, 2018. At June 30, 2019, the allowance for credit losses to total organic loans was 0.87%, compared to 0.90% at March 31, 2019, and 0.99% at June 30, 2018. 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 $10.6 million at June 30, 2019, compared to $13.1 million at March 31, 2019, and $19.7 million at June 30, 2018.
Deposits totaled $21.4 billion at June 30, 2019, an increase of $1.2 billion from $20.2 billion at March 31, 2019, and an increase of $3.4 billion from $18.1 billion at June 30, 2018. The increase from the prior quarter was driven by an increase of $998 million in non-interest bearing demand deposits, $107 million from certificates of deposit, and $100 million from savings and money market accounts. From June 30, 2018, deposits increased across all deposit types, with the largest increases in savings and money market accounts of $1.4 billion, non-interest bearing demand deposits of $729 million, interest-bearing demand deposits of $661 million, and certificates of deposit of $533 million. Non-interest bearing deposits were $8.7 billion at June 30, 2019, compared to $7.7 billion at March 31, 2019, and $7.9 billion at June 30, 2018. Non-interest bearing deposits comprised 40.5% of total deposits at June 30, 2019, compared to 38.0% at March 31, 2019, and 43.9% at June 30, 2018. The proportion of savings and money market balances to total deposits was 36.8%, compared to 38.6% at March 31, 2019, and 35.8% at June 30, 2018. Interest-bearing demand deposits as a percentage of total deposits were 11.8% at June 30, 2019, compared to 12.4% at March 31, 2019, and 10.3% at June 30, 2018. Certificates of deposit as a percentage of total deposits were 10.9% at June 30, 2019, compared to 11.0% at March 31, 2019, and 10.0% at June 30, 2018. The Company’s ratio of loans to deposits was 89.8% at June 30, 2019, compared to 89.6% at March 31, 2019, and 89.2% at June 30, 2018.
Borrowings were zero at June 30, 2019 and March 31, 2019, compared to $75 million at June 30, 2018. The decrease in borrowings from June 30, 2018 is due to a reduction in overnight borrowings.
Qualifying debt totaled $387 million at June 30, 2019, compared to $374 million at March 31, 2019, and $361 million at June 30, 2018.
Stockholders’ equity at June 30, 2019 was $2.9 billion, compared to $2.7 billion at March 31, 2019, and $2.4 billion at June 30, 2018. The increase in stockholders' equity from March 31, 2019 and June 30, 2018 is primarily a function of net income, partially offset by share repurchases. Under the Company's common stock repurchase program, the Company is authorized to repurchase up to $250 million of its shares of common stock. During the second quarter 2019, the Company repurchased 792,688 shares of its common stock at a weighted average price of $42.82, for a total of $33.9 million. During the six months ended June 30, 2019, the Company repurchased a total of 1,733,603 shares of its common stock, representing approximately 2% of the Company's outstanding shares. Shares were repurchased at a weighted average price of $41.45, for a total of $71.9 million.
At June 30, 2019, tangible common equity, net of tax, was 10.2% of tangible assets1 and total capital was 12.9% of risk-weighted assets. The Company’s tangible book value per share1 was $24.65 at June 30, 2019, up 24.6% from June 30, 2018.
Total assets increased 6.4% to $25.3 billion at June 30, 2019, from $23.8 billion at March 31, 2019, and increased 18.5% from $21.4 billion at June 30, 2018. The increase in total assets from the prior year relates primarily to organic loan growth.
Asset Quality
The provision for credit losses was $7.0 million for the second quarter 2019, compared to $3.5 million for the first quarter 2019, and compared to $5.0 million for the second quarter 2018. Net loan charge-offs2 in the second quarter 2019 were $1.6 million, or 0.03% of average loans (annualized), compared to $1.2 million, or 0.03%, in the first quarter 2019, and $2.6 million, or 0.07%, in the second quarter 2018.
Nonaccrual loans increased $7.9 million to $51.8 million during the quarter and increased $17.8 million from June 30, 2018. Loans past due 90 days and still accruing were zero at June 30, 2019, March 31, 2019, and June 30, 2018. Loans past due 30-89 days and still accruing interest totaled $9.7 million at June 30, 2019, a decrease from $20.5 million at March 31, 2019, and an increase from $1.5 million at June 30, 2018.
Repossessed assets totaled $17.7 million at June 30, 2019 and March 31, 2019, a decrease of $9.8 million from $27.5 million at June 30, 2018. Adversely graded loans and non-performing assets totaled $399.0 million at June 30, 2019, an increase of $41.4 million from $357.6 million at March 31, 2019, and an increase of $30.5 million from $368.5 million at June 30, 2018.
The ratio of classified assets to Tier 1 capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 7.8% at June 30, 2019, compared to 8.9% at March 31, 2019, and 10.1% at June 30, 2018.1 

1
See reconciliation of Non-GAAP Financial Measures beginning on page 19.
2 
Beginning in Q1 2019, annualized performance metrics are calculated on an actual/actual basis, from a previous 30/360 basis. Prior period amounts have been restated to conform to the current presentation.

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 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 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 $9.5 billion at June 30, 2019, an increase of $314 million during the quarter, and an increase of $763 million during the last twelve months. The growth in loans during the quarter was driven by increases in the Arizona, Nevada, and Southern California segments, with loan growth of $283 million, $26 million, and $7 million, respectively. These increases were partially offset by a decrease of $2 million in the Northern California segment. The growth in loans during the last twelve months was also driven by increases in the Arizona, Nevada, and Southern California segments, with loan growth of $379 million, $245 million, and $229 million, respectively. These increases were partially offset by a decrease of $90 million in the Northern California segment. Total deposits for the regional segments were $14.8 billion, an increase of $711 million during the quarter, and an increase of $1.7 billion during the last twelve months. The increase in deposits during the quarter was driven by the Arizona and Nevada segments, with deposit growth of $787 million and $182 million, respectively. These increases were partially offset by a decrease of $258 million in the Southern California segment. During the last twelve months, each of the regional segments had growth in deposits. Deposit growth over the last twelve months in the Arizona, Nevada, Southern California, and Northern California segments totaled $838 million, $426 million, $233 million, and $225 million, respectively.
Pre-tax income for the regional segments was $96.9 million for the three months ended June 30, 2019, an increase of $8.5 million from the three months ended March 31, 2019, and an increase of $10.9 million from the three months ended June 30, 2018. All regional segments had increases in pre-tax income compared to the three months ended March 31, 2019. The Arizona and Nevada segments each had increases in pre-tax income of $3.0 million and the Southern and Northern California segments each had increases in pre-tax income of $1.3 million. The Nevada, Southern California, and Northern California segments had increases in pre-tax income from the three months ended June 30, 2018 of $6.1 million, $3.0 million, and $1.8 million, respectively. For the six months ended June 30, 2019, the regional segments reported total pre-tax income of $185.2 million, an increase of $13.4 million compared to the six months ended June 30, 2018. Southern California, Nevada, Northern California and Arizona each had increases of $4.7 million, $3.8 million, $3.5 million, and $1.3 million, respectively.
The NBL segments reported gross loan balances of $9.8 billion at June 30, 2019, an increase of $817 million during the quarter, and an increase of $2.3 billion during the last twelve months. The increase in loans from the prior quarter was driven by the Other NBLs, Technology & Innovation, HFF, and Public & Nonprofit Finance segments, which had loan growth of $467 million, $189 million, $91 million, and $65 million, respectively. During the last twelve months, the largest drivers of loan growth were the Other NBLs and HFF segments, with increases of $2.0 billion and $224 million, respectively. Total deposits for the NBL segments were $5.9 billion, an increase of $560 million during the quarter, and an increase of $1.4 billion during the last twelve months. The increase in deposits from the prior quarter is primarily attributable to the Technology & Innovation and HOA Services segments, which increased deposits by $449 million and $84 million, respectively. The increase of $1.4 billion during the last twelve months is a result of growth in the Technology & Innovation and HOA Services segments of $860 million and $533 million, respectively.
Pre-tax income for the NBL segments was $60.1 million for the three months ended June 30, 2019, an increase of $0.7 million from the three months ended March 31, 2019, and an increase of $11.4 million from the three months ended June 30, 2018. The increase in pre-tax income from the prior quarter relates to the Other NBLs, HFF, and HOA Services segments, which increased by $3.7 million, $0.7 million, and $0.1 million, respectively. These increases were partially offset by decreases in pre-tax income from the Technology & Innovation and Public & Nonprofit Finance segments, which had decreases of $3.8 million and $0.1 million, respectively. The drivers of the increase in pre-tax income from the same period in the prior year were the Other NBLs, HOA Services, and Technology & Innovation segments, which had increases of $5.9 million, $4.4 million, and $2.0 million, respectively. These increases were partially offset by decreases in pre-tax income for the HFF and Public & Nonprofit Finance segments, which decreased by $0.6 million and $0.3 million, respectively. Pre-tax income for the NBL segments for the six months ended June 30, 2019 totaled $119.5 million, an increase of $24.2 million compared to the six months ended June 30, 2018. The largest increases in pre-tax income compared to the six months ended June 30, 2018 were in the Technology & Innovation, HOA Services, and Other NBLs segments. These segments had increases of $9.4 million, $9.0 million, and $7.9 million, respectively. These increases were partially offset by decreases of $1.6 million and $0.5 million in the HFF and Public & Nonprofit segments.

4



Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its second quarter 2019 financial results at 12:00 p.m. ET on Friday, July 19, 2019. Participants may access the call by dialing 1-888-317-6003 and using passcode 0520110 or via live audio webcast using the website link https://services.choruscall.com/links/wal190719.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 July 19th through 9:00 a.m. ET August 19th by dialing 1-877-344-7529 passcode: 10132284.
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 2019, the Company adopted the Accounting Standards Updates ("ASU") related to leases, which include ASU 2016-02, Leases, ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842) Targeted Improvements.
The amendments in ASU 2016-02 require lessees to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position, resulting in a gross up of assets and liabilities on the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The Company elected to apply the package of practical expedients, which permitted the Company to forgo reassessment of 1) expired or existing contracts that may contain leases; 2) lease classification of expired or existing leases; and 3) initial direct costs for any existing leases. Upon adoption of this standard on January 1, 2019, the Company recorded a right-of-use asset and corresponding lease liability of $42.5 million and $46.1 million, respectively. No cumulative effect adjustment to retained earnings was recorded as of January 1, 2019. The new standard does not have a material impact on the Company's results of operations or cash flow.
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, 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, 2018 as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management’s estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities, including expansion through acquisitions; additional regulatory requirements resulting from our continued growth; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.
About Western Alliance Bancorporation
With more than $25 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies. Western Alliance is ranked #1 regional bank by S&P Global Market Intelligence for 2018 and in the top 10 on the Forbes “Best Banks in America” list for four consecutive years, 2016-2019. Its primary subsidiary, Western Alliance Bank, Member FDIC, helps business clients realize their growth ambitions 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 and has offices in key markets nationwide. For more information, visit westernalliancebank.com.


5



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Summary Consolidated Financial Data
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30,
 
 
 
 
 
 
 
 
2019
 
2018
 
Change %
 
 
 
 
 
 
 
 
(in millions)
 
 
Total assets
 
 
 
 
 
 
 
$
25,314.8

 
$
21,367.5

 
18.5
 %
Gross loans, net of deferred fees
 
 
 
 
 
 
 
19,250.3

 
16,138.3

 
19.3

Securities and money market investments
 
 
 
 
 
3,870.1

 
3,688.7

 
4.9

Total deposits
 
 
 
 
 
 
 
21,439.9

 
18,087.5

 
18.5

Qualifying debt
 
 
 
 
 
 
 
387.2

 
361.1

 
7.2

Stockholders' equity
 
 
 
 
 
 
 
2,851.3

 
2,391.7

 
19.2

Tangible common equity, net of tax (1)
 
 
 
 
 
 
 
2,555.0

 
2,094.3

 
22.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Income Statement Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended June 30,
 
For the Six Ended June 30,
 
 
2019
 
2018
 
Change %
 
2019
 
2018
 
Change %
 
 
(in thousands, except per share data)
 
 
 
(in thousands, except per share data)
 
 
Interest income
 
$
302,848

 
$
251,602

 
20.4
 %
 
$
594,016

 
$
486,299

 
22.2
 %
Interest expense
 
48,167

 
27,494

 
75.2

 
91,999

 
47,971

 
91.8

Net interest income
 
254,681

 
224,108

 
13.6

 
502,017

 
438,328

 
14.5

Provision for credit losses
 
7,000

 
5,000

 
40.0

 
10,500

 
11,000

 
(4.5
)
Net interest income after provision for credit losses
 
247,681

 
219,108

 
13.0

 
491,517

 
427,328

 
15.0

Non-interest income
 
14,218

 
13,444

 
5.8

 
29,628

 
25,087

 
18.1

Non-interest expense
 
114,213

 
102,548

 
11.4

 
227,127

 
200,697

 
13.2

Income before income taxes
 
147,686

 
130,004

 
13.6

 
294,018

 
251,718

 
16.8

Income tax expense
 
24,750

 
25,325

 
(2.3
)
 
50,286

 
46,139

 
9.0

Net income
 
$
122,936

 
$
104,679

 
17.4

 
$
243,732

 
$
205,579

 
18.6

Diluted earnings per share
 
$
1.19

 
$
0.99

 
20.2

 
$
2.34

 
$
1.95

 
20.0


(1)    See Reconciliation of Non-GAAP Financial Measures.


6



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Summary Consolidated Financial Data
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At or For the Three Months Ended June 30,
 
For the Six Ended June 30,
 
 
2019
 
2018
 
Change %
 
2019
 
2018
 
Change %
Diluted earnings per share
 
$
1.19

 
$
0.99

 
20.2
 %
 
$
2.34

 
$
1.95

 
20.0
 %
Book value per common share
 
27.51

 
22.59

 
21.8

 
 
 
 
 
 
Tangible book value per share, net of tax (1)
 
24.65

 
19.78

 
24.6

 
 
 
 
 
 
Average shares outstanding
(in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
103,019

 
104,691

 
(1.6
)
 
103,523

 
104,611

 
(1.0
)
Diluted
 
103,501

 
105,420

 
(1.8
)
 
103,985

 
105,372

 
(1.3
)
Common shares outstanding
 
103,654

 
105,876

 
(2.1
)
 
 
 
 
 
 
Selected Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets (2)
 
2.05
%
 
2.02
%
 
1.5
 %
 
2.08
%
 
2.02
%
 
3.0
 %
Return on average tangible common equity (1, 2)
 
19.72

 
20.47

 
(3.7
)
 
20.10

 
20.60

 
(2.4
)
Net interest margin (2)
 
4.59

 
4.71

 
(2.5
)
 
4.65

 
4.69

 
(0.9
)
Operating efficiency ratio - tax equivalent basis (1)
 
42.0

 
42.1

 
(0.2
)
 
42.2

 
42.4

 
(0.4
)
Loan to deposit ratio
 
89.79

 
89.22

 
0.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans outstanding (2)
 
0.03
%
 
0.07
%
 
(57.1
)%
 
0.03
%
 
0.05
%
 
(40.0
)%
Nonaccrual loans to gross loans
 
0.27

 
0.21

 
28.6

 
 
 
 
 
 
Nonaccrual loans and repossessed assets to total assets
 
0.27

 
0.29

 
(6.9
)
 
 
 
 
 
 
Allowance for credit losses to gross loans
 
0.83

 
0.91

 
(8.8
)
 
 
 
 
 
 
Allowance for credit losses to nonaccrual loans
 
309.52

 
432.38

 
(28.4
)
 
 
 
 
 
 
Capital Ratios (1):
 
 
 
 
 
 
 
 
Jun 30, 2019
 
Mar 31, 2019
 
Jun 30, 2018
Tangible common equity (1)
 
10.2
%
 
10.3
%
 
9.9
%
Common Equity Tier 1 (1), (3)
 
10.6

 
10.7

 
10.7

Tier 1 Leverage ratio (1), (3)
 
11.0

 
11.0

 
10.8

Tier 1 Capital (1), (3)
 
10.9

 
11.1

 
11.1

Total Capital (1), (3)
 
12.9

 
13.2

 
13.4


(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 June 30, 2019 are preliminary until the Call Report is filed.







7



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
Condensed Consolidated Income Statements
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(dollars in thousands, except per share data)
Interest income:
 
 
 
 
 
 
 
 
Loans
 
$
270,349

 
$
222,035

 
$
529,167

 
$
427,994

Investment securities
 
28,900

 
27,445

 
58,034

 
54,066

Other
 
3,599

 
2,122

 
6,815

 
4,239

Total interest income
 
302,848

 
251,602

 
594,016

 
486,299

Interest expense:
 
 
 
 
 
 
 
 
Deposits
 
41,888

 
19,849

 
77,676

 
34,022

Qualifying debt
 
6,008

 
5,695

 
12,113

 
10,664

Borrowings
 
271

 
1,950

 
2,210

 
3,285

Total interest expense
 
48,167

 
27,494

 
91,999

 
47,971

Net interest income
 
254,681

 
224,108

 
502,017

 
438,328

Provision for credit losses
 
7,000

 
5,000

 
10,500

 
11,000

Net interest income after provision for credit losses
 
247,681

 
219,108

 
491,517

 
427,328

Non-interest income:
 
 
 
 
 
 
 
 
Service charges and fees
 
5,821

 
5,672

 
11,233

 
11,417

Card income
 
1,625

 
2,033

 
3,466

 
4,005

Foreign currency income
 
1,148

 
1,181

 
2,243

 
2,383

Income from bank owned life insurance
 
978

 
1,167

 
1,959

 
2,095

Income from equity investments
 
868

 
2,517

 
2,877

 
3,977

Lending related income and gains (losses) on sale of loans, net
 
553

 
1,047

 
804

 
2,025

Unrealized gains (losses) on assets measured at fair value, net
 
1,572

 
(685
)
 
4,406

 
(1,759
)
Other
 
1,653

 
512

 
2,640

 
944

Total non-interest income
 
14,218

 
13,444

 
29,628

 
25,087

Non-interest expenses:
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
65,794

 
61,785

 
134,350

 
123,918

Legal, professional, and directors' fees
 
11,105

 
7,946

 
18,637

 
13,949

Occupancy
 
7,761

 
7,401

 
15,988

 
14,265

Deposit costs
 
7,669

 
4,114

 
13,393

 
7,040

Data processing
 
6,793

 
5,586

 
13,468

 
10,793

Insurance
 
2,811

 
3,885

 
5,620

 
7,754

Loan and repossessed asset expenses
 
1,460

 
1,017

 
3,466

 
1,600

Business development
 
1,444

 
1,414

 
3,529

 
3,142

Marketing
 
1,057

 
1,146

 
1,798

 
1,742

Card expense
 
710

 
1,081

 
1,344

 
2,023

Intangible amortization
 
387

 
399

 
774

 
797

Net (gain) loss on sales and valuations of repossessed and other assets
 
(620
)
 
(179
)
 
(523
)
 
(1,407
)
Other
 
7,842

 
6,953

 
15,283

 
15,081

Total non-interest expense
 
114,213

 
102,548

 
227,127

 
200,697

Income before income taxes
 
147,686

 
130,004

 
294,018

 
251,718

Income tax expense
 
24,750

 
25,325

 
50,286

 
46,139

Net income
 
$
122,936

 
$
104,679

 
$
243,732

 
$
205,579

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
Diluted shares
 
103,501

 
105,420

 
103,985

 
105,372

Diluted earnings per share
 
$
1.19

 
$
0.99

 
$
2.34

 
$
1.95





8



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
Five Quarter Condensed Consolidated Income Statements
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
 
(in thousands, except per share data)
Interest income:
 
 
 
 
 
 
 
 
 
 
Loans
 
$
270,349

 
$
258,818

 
$
247,874

 
$
234,709

 
$
222,035

Investment securities
 
28,900

 
29,134

 
30,367

 
27,239

 
27,445

Other
 
3,599

 
3,216

 
3,727

 
3,268

 
2,122

Total interest income
 
302,848

 
291,168

 
281,968

 
265,216

 
251,602

Interest expense:
 
 
 
 
 
 
 
 
 
 
Deposits
 
41,888

 
35,788

 
31,176

 
25,266

 
19,849

Qualifying debt
 
6,008

 
6,105

 
5,829

 
5,794

 
5,695

Borrowings
 
271

 
1,939

 
1,450

 
118

 
1,950

Total interest expense
 
48,167

 
43,832

 
38,455

 
31,178

 
27,494

Net interest income
 
254,681

 
247,336

 
243,513

 
234,038

 
224,108

Provision for credit losses
 
7,000

 
3,500

 
6,000

 
6,000

 
5,000

Net interest income after provision for credit losses
 
247,681

 
243,836

 
237,513

 
228,038

 
219,108

Non-interest income:
 
 
 
 
 
 
 
 
 
 
Service charges and fees
 
5,821

 
5,412

 
5,611

 
5,267

 
5,672

Card income
 
1,625

 
1,841

 
1,866

 
2,138

 
2,033

Foreign currency income
 
1,148

 
1,095

 
1,285

 
1,092

 
1,181

Income from bank owned life insurance
 
978

 
981

 
983

 
868

 
1,167

Income from equity investments
 
868

 
2,009

 
3,178

 
1,440

 
2,517

Lending related income and gains (losses) on sale of loans, net
 
553

 
251

 
893

 
1,422

 
1,047

Gain (loss) on sales of investment securities
 

 

 
(424
)
 
(7,232
)
 

Unrealized gains (losses) on assets measured at fair value, net
 
1,572

 
2,834

 
(640
)
 
(1,212
)
 
(685
)
Other
 
1,653

 
987

 
859

 
635

 
512

Total non-interest income
 
14,218

 
15,410

 
13,611

 
4,418

 
13,444

Non-interest expenses:
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
65,794

 
68,556

 
64,558

 
64,762

 
61,785

Legal, professional, and directors' fees
 
11,105

 
7,532

 
6,866

 
7,907

 
7,946

Occupancy
 
7,761

 
8,227

 
7,733

 
7,406

 
7,401

Deposit costs
 
7,669

 
5,724

 
7,012

 
4,848

 
4,114

Data processing
 
6,793

 
6,675

 
6,028

 
5,895

 
5,586

Insurance
 
2,811

 
2,809

 
2,539

 
3,712

 
3,885

Loan and repossessed asset expenses
 
1,460

 
2,006

 
1,748

 
1,230

 
1,017

Business development
 
1,444

 
2,085

 
1,437

 
1,381

 
1,414

Marketing
 
1,057

 
741

 
1,341

 
687

 
1,146

Card expense
 
710

 
634

 
996

 
1,282

 
1,081

Intangible amortization
 
387

 
387

 
399

 
398

 
399

Net (gain) loss on sales and valuations of repossessed and other assets
 
(620
)
 
97

 
1,483

 
(67
)
 
(179
)
Other
 
7,842

 
7,441

 
8,989

 
14,400

 
6,953

Total non-interest expense
 
114,213

 
112,914

 
111,129

 
113,841

 
102,548

Income before income taxes
 
147,686

 
146,332

 
139,995

 
118,615

 
130,004

Income tax expense
 
24,750

 
25,536

 
20,909

 
7,492

 
25,325

Net income
 
$
122,936

 
$
120,796

 
$
119,086

 
$
111,123

 
$
104,679

 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
Diluted shares
 
103,501

 
104,475

 
105,286

 
105,448

 
105,420

Diluted earnings per share
 
$
1.19

 
$
1.16

 
$
1.13

 
$
1.05

 
$
0.99



9




Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Five Quarter Condensed Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
 
(in millions)
Assets:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
1,067.7

 
$
785.6

 
$
498.6

 
$
700.5

 
$
506.8

Securities and money market investments
 
3,870.1

 
3,739.4

 
3,761.1

 
3,633.7

 
3,688.7

Loans held for investment:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
8,454.2

 
7,723.7

 
7,762.6

 
7,487.7

 
7,278.4

Commercial real estate - non-owner occupied
 
4,685.5

 
4,304.3

 
4,213.4

 
3,953.0

 
4,010.6

Commercial real estate - owner occupied
 
2,254.1

 
2,285.3

 
2,325.4

 
2,288.2

 
2,270.5

Construction and land development
 
2,210.4

 
2,283.5

 
2,134.7

 
2,107.6

 
1,978.3

Residential real estate
 
1,580.1

 
1,461.5

 
1,204.4

 
827.1

 
545.3

Consumer
 
66.0

 
58.4

 
70.1

 
69.2

 
55.2

Gross loans, net of deferred fees
 
19,250.3

 
18,116.7


17,710.6

 
16,732.8

 
16,138.3

Allowance for credit losses
 
(160.4
)
 
(155.0
)
 
(152.7
)
 
(150.0
)
 
(147.1
)
Loans, net
 
19,089.9

 
17,961.7

 
17,557.9

 
16,582.8

 
15,991.2

Premises and equipment, net
 
123.1

 
119.8

 
119.5

 
119.2

 
115.4

Operating lease right-of-use asset
 
71.1

 
72.8

 

 

 

Other assets acquired through foreclosure, net
 
17.7

 
17.7

 
17.9

 
20.0

 
27.5

Bank owned life insurance
 
172.1

 
171.1

 
170.1

 
169.2

 
168.7

Goodwill and other intangibles, net
 
298.4

 
298.8

 
299.2

 
299.5

 
300.0

Other assets
 
604.7

 
625.9

 
685.2

 
651.2

 
569.2

Total assets
 
$
25,314.8

 
$
23,792.8

 
$
23,109.5

 
$
22,176.1

 
$
21,367.5

Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
 
Non-interest bearing demand deposits
 
$
8,677.3

 
$
7,679.3

 
$
7,456.1

 
$
8,014.7

 
$
7,947.9

Interest bearing:
 
 
 
 
 
 
 
 
 
 
Demand
 
2,525.6

 
2,499.8

 
2,555.6

 
1,978.4

 
1,864.6

Savings and money market
 
7,898.3

 
7,798.3

 
7,330.7

 
7,059.1

 
6,468.8

Certificates of deposit
 
2,338.7

 
2,231.3

 
1,835.0

 
1,856.4

 
1,806.2

Total deposits
 
21,439.9

 
20,208.7

 
19,177.4

 
18,908.6

 
18,087.5

Customer repurchase agreements
 
13.9

 
15.1

 
22.4

 
20.9

 
18.0

Total customer funds
 
21,453.8

 
20,223.8

 
19,199.8

 
18,929.5

 
18,105.5

Borrowings
 

 

 
491.0

 

 
75.0

Qualifying debt
 
387.2

 
374.0

 
360.5

 
359.1

 
361.1

Operating lease liability
 
76.2

 
77.8

 

 

 

Accrued interest payable and other liabilities
 
546.3

 
396.6

 
444.5

 
399.1

 
434.2

Total liabilities
 
22,463.5

 
21,072.2

 
20,495.8

 
19,687.7

 
18,975.8

Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
Common stock and additional paid-in capital
 
1,310.9

 
1,329.6

 
1,364.6

 
1,392.6

 
1,387.9

Retained earnings
 
1,514.0

 
1,399.2

 
1,282.7

 
1,166.2

 
1,055.1

Accumulated other comprehensive income (loss)
 
26.4

 
(8.2
)
 
(33.6
)
 
(70.4
)
 
(51.3
)
Total stockholders' equity
 
2,851.3

 
2,720.6

 
2,613.7

 
2,488.4

 
2,391.7

Total liabilities and stockholders' equity
 
$
25,314.8

 
$
23,792.8

 
$
23,109.5

 
$
22,176.1

 
$
21,367.5




10



Western Alliance Bancorporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
Changes in the Allowance For Credit Losses
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
 
(in thousands)
Balance, beginning of period
 
$
154,987

 
$
152,717

 
$
150,011

 
$
147,083

 
$
144,659

Provision for credit losses
 
7,000

 
3,500

 
6,000

 
6,000

 
5,000

Recoveries of loans previously charged-off:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
495

 
477

 
690

 
362

 
916

Commercial real estate - non-owner occupied
 
53

 

 

 
804

 
15

Commercial real estate - owner occupied
 
386

 
453

 
9

 
52

 
231

Construction and land development
 
9

 
55

 
13

 
24

 
8

Residential real estate
 
27

 
93

 
116

 
440

 
141

Consumer
 
8

 
5

 
8

 
11

 
14

Total recoveries
 
978

 
1,083

 
836

 
1,693

 
1,325

Loans charged-off:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
2,018

 
2,124

 
4,130

 
4,610

 
2,777

Commercial real estate - non-owner occupied
 

 

 

 

 
233

Commercial real estate - owner occupied
 

 

 

 

 

Construction and land development
 
141

 

 

 

 
1

Residential real estate
 
397

 
188

 

 
46

 
885

Consumer
 

 
1

 

 
109

 
5

Total loans charged-off
 
2,556

 
2,313

 
4,130

 
4,765

 
3,901

Net loan charge-offs
 
1,578

 
1,230

 
3,294

 
3,072

 
2,576

Balance, end of period
 
$
160,409

 
$
154,987

 
$
152,717

 
$
150,011

 
$
147,083

 
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans - annualized
 
0.03
%
 
0.03
%
 
0.08
%
 
0.08
%
 
0.07
%
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to gross loans
 
0.83
%
 
0.86
%
 
0.86
%
 
0.90
%
 
0.91
%
Allowance for credit losses to gross organic loans
 
0.87

 
0.90

 
0.92

 
0.97

 
0.99

Allowance for credit losses to nonaccrual loans
 
309.52

 
353.15

 
550.41

 
406.89

 
432.38

 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
51,825

 
$
43,887

 
$
27,746

 
$
36,868

 
$
34,017

Nonaccrual loans to gross loans
 
0.27
%
 
0.24
%
 
0.16
%
 
0.22
%
 
0.21
%
Repossessed assets
 
$
17,707

 
$
17,707

 
$
17,924

 
$
20,028

 
$
27,541

Nonaccrual loans and repossessed assets to total assets
 
0.27
%
 
0.26
%
 
0.20
%
 
0.26
%
 
0.29
%
 
 
 
 
 
 
 
 
 
 
 
Loans past due 90 days, still accruing
 
$

 
$

 
$
594

 
$

 
$

Loans past due 90 days and still accruing to gross loans
 
%
 
%
 
0.00
%
 
%
 
%
Loans past due 30 to 89 days, still accruing
 
$
9,681

 
$
20,480

 
$
16,557

 
$
9,360

 
$
1,545

Loans past due 30 to 89 days, still accruing to gross loans
 
0.05
%
 
0.11
%
 
0.09
%
 
0.06
%
 
0.01
%
 
 
 
 
 
 
 
 
 
 
 
Special mention loans
 
$
197,996

 
$
134,348

 
$
88,856

 
$
124,689

 
$
150,278

Special mention loans to gross loans
 
1.03
%
 
0.74
%
 
0.50
%
 
0.75
%
 
0.93
%
 
 
 
 
 
 
 
 
 
 
 
Classified loans on accrual
 
$
131,442

 
$
161,620

 
$
181,105

 
$
176,727

 
$
156,659

Classified loans on accrual to gross loans
 
0.68
%
 
0.89
%
 
1.02
%
 
1.06
%
 
0.97
%
Classified assets
 
$
216,000

 
$
238,241

 
$
242,101

 
$
252,770