PHOENIX--(BUSINESS WIRE)--Western Alliance Bancorporation (NYSE:WAL):
FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS
Quarter Highlights: | ||||||||||
Net income | Earnings per share | PPNR1 | Net interest margin | Adjusted efficiency ratio1 | Book value per common share | |||||
$147.9 million | $1.33 | $220.3 million | 3.65% | 59.1% | $52.81 | |||||
$1.911, excluding notable items | $46.721, excluding goodwill and intangibles | |||||||||
CEO COMMENTARY: |
"Western Alliance's diversified, national commercial business strategy continued to drive strong momentum in the fourth quarter as we generated earnings per share of $1.911, excluding $0.58 of notable items. We view this quarter's solid loan and deposit momentum, continued net interest income growth, and sustained stable asset quality as positioning us to deliver leading profitability in 2024, supported by sturdy capital and liquidity levels," said Kenneth A. Vecchione, President and Chief Executive Officer. "CET1 capital reached 10.8% at year-end, and tangible book value per share rose 16% year-over-year to $46.721. Additionally, our strong deposit growth allowed us to repay $1.5 billion of debt and borrowings, including our entire loan from the Bank Term Funding Program. As we turn the page on 2023, we are encouraged by how our employees responded to the year's challenges as well as the ongoing trust placed in us by our customers and shareholders." |
LINKED-QUARTER BASIS | FULL YEAR |
FINANCIAL HIGHLIGHTS: | |
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FINANCIAL POSITION RESULTS: | |
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LOANS AND ASSET QUALITY: | |
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KEY PERFORMANCE METRICS: | |
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1 | See reconciliation of Non-GAAP Financial Measures. |
Income Statement
Net interest income totaled $591.7 million in the fourth quarter 2023, an increase of $4.7 million, or 0.8%, from $587.0 million in the third quarter 2023, and a decrease of $48.0 million, or 7.5%, compared to the fourth quarter 2022. The increase in net interest income from the third quarter 2023 is due to an increase in average HFI loan and securities balances combined with a decrease in average short-term borrowings, and was partially offset by an increase in deposit balances and rates. The decrease in net interest income from the fourth quarter 2022 was driven by an increase in both the balances and rates of deposits and short-term borrowings, partially offset by higher yields on HFI loans.
The Company recorded a provision for credit losses of $9.3 million in the fourth quarter 2023, a decrease of $2.8 million from $12.1 million in the third quarter 2023, and an increase of $6.2 million from $3.1 million in the fourth quarter 2022. The decrease in provision for credit losses during the fourth quarter 2023 is primarily due to improvement in the macroeconomic outlook and stable asset quality.
The Company's net interest margin in the fourth quarter 2023 was 3.65%, a decrease from 3.67% in the third quarter 2023, and a decrease from 3.98% in the fourth quarter 2022. An increase in deposit balances and rates drove a decrease in net interest margin from the third quarter 2023, with higher average HFI loan and securities balances partially offsetting this decrease. The decrease in net interest margin from the fourth quarter 2022 was driven by higher average balances and rates on deposits and short-term borrowings.
Non-interest income was $90.5 million for the fourth quarter 2023, compared to $129.2 million for the third quarter 2023, and $61.5 million for the fourth quarter 2022. The $38.7 million decrease in non-interest income for the third quarter 2023 was due to a decrease in fair value gain adjustments of $16.5 million and a $14.8 million loss on sale of securities in the fourth quarter compared to a gain of $0.1 million in the third quarter, combined with an $18.1 million decrease in net loan servicing revenue due to losses on MSR sales and fair value changes, partially offset by higher servicing income, and a $4.2 million decrease in net gain on loan origination and sale activities from lower spreads. These decreases were offset by a $12.6 million increase in income from equity investments. The $29.0 million increase in non-interest income from the fourth quarter 2022 was driven by a higher net gain on loan origination and sale activities, service charges and fees, and fair value gain adjustments.
Net revenue totaled $682.2 million for the fourth quarter 2023, a decrease of $34.0 million or 4.7%, compared to $716.2 million for the third quarter 2023, and a decrease of $19.0 million or 2.7%, compared to $701.2 million for the fourth quarter 2022.
Non-interest expense was $461.9 million for the fourth quarter 2023, compared to $426.2 million for the third quarter 2023, and $333.4 million for the fourth quarter 2022. The Company's adjusted efficiency ratio1 was 59.1% for the fourth quarter 2023, compared to 50.0% in the third quarter 2023, and 40.0% for the fourth quarter 2022. The increase in non-interest expense from the third quarter 2023 is due primarily to increased insurance costs largely related to the FDIC special assessment, partially offset by a gain on debt extinguishment related to the early payoff of the AmeriHome senior notes. The increase in non-interest expense from the fourth quarter 2022 is primarily attributable to an increase in insurance and deposit costs.
Income tax expense was $63.1 million for the fourth quarter 2023, compared to $61.3 million for the third quarter 2023, and $71.7 million for the fourth quarter 2022. The increase in income tax expense from the third quarter 2023 is primarily related to a higher effective tax rate resulting from lower utilization of tax credits due to timing of projects being placed in service, the AOCI impact of AFS securities gains during the quarter, and discrete nondeductible items.
Net income was $147.9 million for the fourth quarter 2023, a decrease of $68.7 million from $216.6 million for the third quarter 2023, and a decrease of $145.1 million from $293.0 million for the fourth quarter 2022. Earnings per share totaled $1.33 for the fourth quarter 2023, compared to $1.97 for the third quarter 2023, and $2.67 for the fourth quarter 2022. Earnings per share, excluding notable items1, totaled $1.91 for the fourth quarter 2023. The Company views its earnings per share, excluding notable items1 as a key metric for assessing the Company's earnings power.
The Company views its pre-provision net revenue1 ("PPNR") as a key metric for assessing the Company's earnings power, which it defines as net revenue less non-interest expense. For the fourth quarter 2023, the Company's PPNR1 was $220.3 million, down $69.7 million from $290.0 million in the third quarter 2023, and down $147.5 million from $367.8 million in the fourth quarter 2022.
The Company had 3,260 full-time equivalent employees and 57 offices at December 31, 2023, compared to 3,272 employees and 56 offices at September 30, 2023, and 3,365 employees and 56 offices at December 31, 2022.
1 | See reconciliation of Non-GAAP Financial Measures. |
Balance Sheet
HFI loans, net of deferred fees totaled $50.3 billion at December 31, 2023, compared to $49.4 billion at September 30, 2023, and $51.9 billion at December 31, 2022. The increase in HFI loans of $850 million from the prior quarter was driven by an increase of $759 million in commercial and industrial loans and $220 million in construction and land development loans. This increase was partially offset by a decrease in CRE non-owner occupied loans of $160 million. The decrease in HFI loans of $1.6 billion from December 31, 2022 was driven by a $1.6 billion decrease in commercial and industrial loans and a $1.2 billion decrease in residential real estate loans, resulting from loan dispositions undertaken as part of the Company's balance sheet repositioning strategy. This decrease was partially offset by increases in construction and land development loans and CRE non-owner occupied of $876 million and $331 million, respectively. HFS loans totaled $1.4 billion at December 31, 2023, compared to $1.8 billion at September 30, 2023, and $1.2 billion at December 31, 2022. The balance of HFS loans at December 31, 2023 primarily consisted of AmeriHome HFS loans, consistent with the balance at December 31, 2022 and prior periods. The decrease of $364 million in HFS loans from the prior quarter is primarily related to loan sales. The increase of $218 million in HFS loans from December 31, 2022 primarily related to an increase in agency conforming loans.
The Company's allowance for credit losses on HFI loans consists of an allowance for funded HFI loans and an allowance for unfunded loan commitments. At December 31, 2023, the allowance for loan losses to funded HFI loans ratio was 0.67%, compared to 0.66% at September 30, 2023, and 0.60% at December 31, 2022. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.73% at December 31, 2023, compared to 0.74% at September 30, 2023, and 0.69% at December 31, 2022. The Company is a party to credit linked note transactions, which effectively transfer a portion of the risk of losses on reference pools of loans to the purchasers of the notes. The Company is protected from first credit losses on reference pools of loans totaling $9.1 billion, $9.3 billion, and $12.0 billion as of December 31, 2023, September 30, 2023, and December 31, 2022, respectively, under these transactions. However, as these note transactions are considered to be free standing credit enhancements, the allowance for credit losses cannot be reduced by the expected credit losses that may be mitigated by these notes. Accordingly, the allowance for loan and credit losses ratios include an allowance of $14.7 million as of December 31, 2023, $17.4 million as of September 30, 2023, and $18.5 million as of December 31, 2022, related to these pools of loans. The allowance for credit losses to funded HFI loans ratio, adjusted to reduce the HFI loan balance by the amount of loans in covered reference pools, was 0.89% at December 31, 2023, 0.91% at September 30, 2023, and 0.89% at December 31, 2022.
Deposits totaled $55.3 billion at December 31, 2023, an increase of $1.0 billion from $54.3 billion at September 30, 2023, and an increase of $1.7 billion from $53.6 billion at December 31, 2022. By deposit type, the increase from the prior quarter is attributable to increases of $3.1 billion from interest-bearing demand deposits and $1.3 billion from certificates of deposits, offset by a decrease of $3.5 billion from non-interest bearing demand deposits. From December 31, 2022, interest-bearing demand deposits and certificates of deposit increased $6.4 billion and $5.1 billion, respectively. These increases were partially offset by decreases in non-interest bearing demand deposits and savings and money market accounts of $5.2 billion and $4.6 billion, respectively. Non-interest bearing deposits were $14.5 billion at December 31, 2023, compared to $18.0 billion at September 30, 2023, and $19.7 billion at December 31, 2022.
The table below shows the Company's deposit types as a percentage of total deposits:
Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 | |||||||
Non-interest bearing | 26.2 | % | 33.1 | % | 36.7 | % | |||
Savings and money market | 26.7 | 27.0 | 36.2 | ||||||
Interest-bearing demand | 28.8 | 23.7 | 17.7 | ||||||
Certificates of deposit | 18.3 | 16.2 | 9.4 | ||||||
The Company's ratio of HFI loans to deposits was 90.9% at December 31, 2023, compared to 91.1% at September 30, 2023, and 96.7% at December 31, 2022.
Borrowings were $7.2 billion at December 31, 2023, $8.7 billion at September 30, 2023, and $6.3 billion at December 31, 2022. Borrowings decreased $1.5 billion from September 30, 2023 due to payoff of the Bank Term Funding Program advances and the AmeriHome senior notes. The increase in borrowings from December 31, 2022 is due primarily to an increase in short-term borrowings of $1.8 billion, partially offset by payoffs of credit linked notes and the AmeriHome senior notes.
Qualifying debt totaled $895 million at December 31, 2023, compared to $890 million at September 30, 2023, and $893 million at December 31, 2022.
Stockholders' equity was $6.1 billion at December 31, 2023, compared to $5.7 billion at September 30, 2023 and $5.4 billion at December 31, 2022. The increase in stockholders' equity from the prior quarter was due to net income and unrealized fair value gains of $222 million on the Company's available-for-sale securities, which are recorded in other comprehensive loss, net of tax. These increases were partially offset by dividends to shareholders. Cash dividends of $40.5 million ($0.37 per common share) and $3.2 million ($0.27 per depository share) were paid to shareholders during the fourth quarter 2023. The increase in stockholders' equity from December 31, 2022 is primarily a function of net income, partially offset by dividends to shareholders.
At December 31, 2023, tangible common equity, net of tax1, was 7.3% of tangible assets1 and total capital was 13.7% of risk-weighted assets. The Company's tangible book value per share1 was $46.72 at December 31, 2023, an increase of 7.0% from $43.66 at September 30, 2023, and up 16.1% from $40.25 at December 31, 2022. The increase in tangible book value per share from September 30, 2023 is attributable to net income.
Total assets remained flat from September 30, 2023 to December 31, 2023 at $70.9 billion, and increased 4.6% from $67.7 billion at December 31, 2022. The slight decrease in total assets from September 30, 2023 was driven by a decrease in cash and HFS loans, offset by an increase in investment securities. The increase in total assets from December 31, 2022 was driven by an increase in investments, cash, and HFS loans, partially offset by a decrease in HFI loans.
1 | See reconciliation of Non-GAAP Financial Measures. |
Asset Quality
Provision for credit losses totaled $9.3 million for the fourth quarter 2023, compared to $12.1 million for the third quarter 2023, and $3.1 million for the fourth quarter 2022. Net loan charge-offs in the fourth quarter 2023 were $8.5 million, or 0.07% of average loans (annualized), compared to $8.0 million, or 0.07%, in the third quarter 2023, and $1.8 million, or 0.01%, in the fourth quarter 2022.
Nonaccrual loans increased $36 million to $273 million during the quarter and increased $188 million from December 31, 2022. Loans past due 90 days and still accruing interest totaled $42 million at December 31, 2023 and zero at September 30, 2023 and December 31, 2022 (excluding government guaranteed loans of $399 million, $439 million, and $582 million, respectively). Loans past due 30-89 days and still accruing interest totaled $164 million at December 31, 2023, a decrease from $189 million at September 30, 2023, and an increase from $70 million at December 31, 2022 (excluding government guaranteed loans of $279 million, $261 million, and $334 million, respectively).
Repossessed assets totaled $8 million at December 31, 2023, flat from September 30, 2023, and a decrease of $3 million from December 31, 2022. Classified assets totaled $673 million at December 31, 2023, an increase of $34 million from $639 million at September 30, 2023, and an increase of $280 million from $393 million at December 31, 2022.
The ratio of classified assets to Tier 1 capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 10.5% at December 31, 2023, compared to 10.2% at September 30, 2023, and 6.8% at December 31, 2022.
1 | See reconciliation of Non-GAAP Financial Measures. |
Segment Highlights
The Company's reportable segments are aggregated with a focus on products and services offered and consist of three reportable segments:
- | Commercial segment: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry. | |
- | Consumer Related segment: offers both commercial banking services to enterprises in consumer-related sectors and consumer banking services, such as residential mortgage banking. | |
- | Corporate & Other segment: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to our other reportable segments, and inter-segment eliminations. |
Key management metrics for evaluating the performance of the Company's Commercial and Consumer Related segments include loan and deposit growth, asset quality, and pre-tax income.
The Commercial segment reported an HFI loan balance of $29.1 billion at December 31, 2023, an increase of $416 million during the quarter, and a decrease of $2.3 billion during the year. Deposits for the Commercial segment totaled $23.9 billion at December 31, 2023, an increase of $1.3 billion during the quarter, and a decrease of $5.6 billion during the year.
Pre-tax income for the Commercial segment was $168.4 million for the three months ended December 31, 2023, a decrease of $27.7 million from the three months ended September 30, 2023, and a decrease of $152.1 million from the three months ended December 31, 2022. For the year ended December 31, 2023, the Commercial segment reported total pre-tax income of $745.2 million, a decrease of $350.1 million compared to the year ended December 31, 2022.
The Consumer Related segment reported an HFI loan balance of $21.2 billion at December 31, 2023, an increase of $434 million during the quarter, and an increase of $713 million during the year. The Consumer Related segment also has loans held for sale of $1.4 billion at December 31, 2023, a decrease of $364 million during the quarter, and an increase of $218 million during the year. Deposits for the Consumer Related segment totaled $24.9 billion, a decrease of $169 million during the quarter, and an increase of $6.4 billion during the year.
Pre-tax income for the Consumer Related segment was $75.6 million for the three months ended December 31, 2023, an increase of $6.7 million from the three months ended September 30, 2023, and an increase of $5.8 million from the three months ended December 31, 2022. Pre-tax income for the Consumer Related segment for the year ended December 31, 2023 totaled $258.0 million, a decrease of $192.1 million compared to the year ended December 31, 2022.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its fourth quarter and full year 2023 financial results at 12:00 p.m. ET on Friday, January 26, 2024. Participants may access the call by dialing 1-833-470-1428 and using access code 941447 or via live audio webcast using the website link https://events.q4inc.com/attendee/536267609. The webcast is also available via the Company's website at www.westernalliancebancorporation.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 3:00 p.m. ET January 26th through 11:00 p.m. ET February 26th by dialing 1-866-813-9403, using access code 690232.
Reclassifications
Certain amounts in the Consolidated Income Statements for the prior periods have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders' equity as previously reported.
Use of Non-GAAP Financial Information
This press release contains both financial measures based on GAAP and non-GAAP based financial measures, which are used where management believes them to be helpful in understanding the Company's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding our expectations with regard to our business, financial and operating results, future economic performance and dividends. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include, among others: the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and the Company's subsequent Quarterly Reports on Form 10-Q, each as filed with the Securities and Exchange Commission; adverse developments in the financial services industry generally such as the bank failures in 2023 and any related impact on depositor behavior; risks related to the sufficiency of liquidity; the potential adverse effects of unusual and infrequently occurring events such as the COVID-19 pandemic and any governmental or societal responses thereto; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; the impact on financial markets from geopolitical conflicts such as the wars in Ukraine and the Middle East; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management's estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities, including expansion through acquisitions; additional regulatory requirements resulting from our continued growth; management's estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.
About Western Alliance Bancorporation
With more than $70 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country's top-performing banking companies. Through its primary subsidiary, Western Alliance Bank, Member FDIC, clients benefit from a full spectrum of tailored commercial banking solutions and consumer products, all delivered with outstanding service by industry experts who put customers first. Major accolades include being ranked as a top U.S. bank in 2023 by American Banker and Bank Director. Serving clients across the country wherever business happens, Western Alliance Bank operates individual, full-service banking and financial brands with offices in key markets nationwide. For more information, visit westernalliancebank.com.
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||
Summary Consolidated Financial Data | ||||||||||||||||||
Unaudited | ||||||||||||||||||
Selected Balance Sheet Data: | ||||||||||||||||||
As of December 31, | ||||||||||||||||||
2023 | 2022 | Change % | ||||||||||||||||
(in millions) | ||||||||||||||||||
Total assets | $ | 70,862 | $ | 67,734 | 4.6 | % | ||||||||||||
Loans held for sale | 1,402 | 1,184 | 18.4 | |||||||||||||||
HFI loans, net of deferred fees | 50,297 | 51,862 | (3.0 | ) | ||||||||||||||
Investment securities | 12,993 | 8,760 | 48.3 | |||||||||||||||
Total deposits | 55,333 | 53,644 | 3.1 | |||||||||||||||
Borrowings | 7,230 | 6,299 | 14.8 | |||||||||||||||
Qualifying debt | 895 | 893 | 0.2 | |||||||||||||||
Stockholders' equity | 6,078 | 5,356 | 13.5 | |||||||||||||||
Tangible common equity, net of tax (1) | 5,116 | 4,383 | 16.7 | |||||||||||||||
Common equity Tier 1 capital | 5,659 | 5,073 | 11.6 | |||||||||||||||
Selected Income Statement Data: | ||||||||||||||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||||
2023 | 2022 | Change % | 2023 | 2022 | Change % | |||||||||||||
(in millions, except per share data) | (in millions, except per share data) | |||||||||||||||||
Interest income | $ | 1,039.0 | $ | 888.3 | 17.0 | % | $ | 4,035.3 | $ | 2,691.8 | 49.9 | % | ||||||
Interest expense | 447.3 | 248.6 | 79.9 | 1,696.4 | 475.5 | NM | ||||||||||||
Net interest income | 591.7 | 639.7 | (7.5 | ) | 2,338.9 | 2,216.3 | 5.5 | |||||||||||
Provision for credit losses | 9.3 | 3.1 | NM | 62.6 | 68.1 | (8.1 | ) | |||||||||||
Net interest income after provision for credit losses | 582.4 | 636.6 | (8.5 | ) | 2,276.3 | 2,148.2 | 6.0 | |||||||||||
Non-interest income | 90.5 | 61.5 | 47.2 | 280.7 | 324.6 | (13.5 | ) | |||||||||||
Non-interest expense | 461.9 | 333.4 | 38.5 | 1,623.4 | 1,156.7 | 40.3 | ||||||||||||
Income before income taxes | 211.0 | 364.7 | (42.1 | ) | 933.6 | 1,316.1 | (29.1 | ) | ||||||||||
Income tax expense | 63.1 | 71.7 | (12.0 | ) | 211.2 | 258.8 | (18.4 | ) | ||||||||||
Net income | 147.9 | 293.0 | (49.5 | ) | 722.4 | 1,057.3 | (31.7 | ) | ||||||||||
Dividends on preferred stock | 3.2 | 3.2 | - | 12.8 | 12.8 | - | ||||||||||||
Net income available to common stockholders | $ | 144.7 | $ | 289.8 | (50.1 | ) | $ | 709.6 | $ | 1,044.5 | (32.1 | ) | ||||||
Diluted earnings per common share | $ | 1.33 | $ | 2.67 | (50.2 | ) | $ | 6.54 | $ | 9.70 | (32.6 | ) | ||||||
(1) | See Reconciliation of Non-GAAP Financial Measures. | |
NM | Changes +/- 100% are not meaningful. |
| Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||
Summary Consolidated Financial Data | ||||||||||||||||||
Unaudited | ||||||||||||||||||
Common Share Data: | ||||||||||||||||||
At or For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||||
2023 | 2022 | Change % | 2023 | 2022 | Change % | |||||||||||||
Diluted earnings per common share | $ | 1.33 | $ | 2.67 | (50.2 | )% | $ | 6.54 | $ | 9.70 | (32.6 | )% | ||||||
Book value per common share | 52.81 | 46.47 | 13.6 | |||||||||||||||
Tangible book value per common share, net of tax (1) | 46.72 | 40.25 | 16.1 | |||||||||||||||
Average common shares outstanding (in millions): | ||||||||||||||||||
Basic | 108.4 | 108.0 | 0.3 | 108.3 | 107.2 | 1.0 | ||||||||||||
Diluted | 108.7 | 108.4 | 0.3 | 108.5 | 107.6 | 0.8 | ||||||||||||
Common shares outstanding | 109.5 | 108.9 | 0.5 | |||||||||||||||
Selected Performance Ratios: | ||||||||||||||||||
Return on average assets (2) | 0.84 | % | 1.67 | % | (49.7 | )% | 1.03 | % | 1.62 | % | (36.4 | )% | ||||||
Return on average tangible common equity (1, 2) | 11.9 | 27.0 | (55.9 | ) | 14.9 | 25.4 | (41.3 | ) | ||||||||||
Net interest margin (2) | 3.65 | 3.98 | (8.3 | ) | 3.63 | 3.67 | (1.1 | ) | ||||||||||
Efficiency ratio, adjusted for deposit costs (1) | 59.1 | 40.0 | 47.8 | 53.5 | 41.1 | 30.2 | ||||||||||||
HFI loan to deposit ratio | 90.9 | 96.7 | (6.0 | ) | ||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||
Net charge-offs to average loans outstanding (2) | 0.07 | % | 0.01 | % | NM | 0.06 | % | 0.00 | % | NM | ||||||||
Nonaccrual loans to funded HFI loans | 0.54 | 0.16 | NM | |||||||||||||||
Nonaccrual loans and repossessed assets to total assets | 0.40 | 0.14 | NM | |||||||||||||||
Allowance for loan losses to funded HFI loans | 0.67 | 0.60 | 11.7 | |||||||||||||||
Allowance for loan losses to nonaccrual HFI loans | 123 | 364 | (66.2 | ) | ||||||||||||||
Capital Ratios: | |||||||||
Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 | |||||||
Tangible common equity (1) | 7.3 | % | 6.8 | % | 6.5 | % | |||
Common Equity Tier 1 (3) | 10.8 | 10.6 | 9.3 | ||||||
Tier 1 Leverage ratio (3) | 8.6 | 8.5 | 7.8 | ||||||
Tier 1 Capital (3) | 11.5 | 11.3 | 10.0 | ||||||
Total Capital (3) | 13.7 | 13.5 | 12.1 | ||||||
(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 December 31, 2023 are preliminary. | |
NM | Changes +/- 100% are not meaningful. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||
Condensed Consolidated Income Statements | ||||||||||||||||
Unaudited | ||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(dollars in millions, except per share data) | ||||||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 859.0 | $ | 785.1 | $ | 3,409.7 | $ | 2,393.4 | ||||||||
Investment securities | 136.2 | 89.4 | 467.5 | 272.6 | ||||||||||||
Other | 43.8 | 13.8 | 158.1 | 25.8 | ||||||||||||
Total interest income | 1,039.0 | 888.3 | 4,035.3 | 2,691.8 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 343.7 | 157.6 | 1,142.6 | 276.4 | ||||||||||||
Qualifying debt | 9.6 | 9.1 | 37.9 | 35.0 | ||||||||||||
Borrowings | 94.0 | 81.9 | 515.9 | 164.1 | ||||||||||||
Total interest expense | 447.3 | 248.6 | 1,696.4 | 475.5 | ||||||||||||
Net interest income | 591.7 | 639.7 | 2,338.9 | 2,216.3 | ||||||||||||
Provision for credit losses | 9.3 | 3.1 | 62.6 | 68.1 | ||||||||||||
Net interest income after provision for credit losses | 582.4 | 636.6 | 2,276.3 | 2,148.2 | ||||||||||||
Non-interest income: | ||||||||||||||||
Net gain on loan origination and sale activities | 47.8 | 25.4 | 193.5 | 104.0 | ||||||||||||
Service charges and fees | 22.7 | 5.9 | 76.3 | 27.0 | ||||||||||||
Income from equity investments | 13.1 | 4.2 | 15.7 | 17.8 | ||||||||||||
Net loan servicing revenue | 9.1 | 21.4 | 102.3 | 130.9 | ||||||||||||
Commercial banking related income | 5.9 | 5.5 | 23.7 | 21.5 | ||||||||||||
(Loss) gain on recovery from credit guarantees | (2.7 | ) | 3.0 | (2.2 | ) | 14.7 | ||||||||||
(Loss) gain on sales of investment securities | (14.8 | ) | 0.1 | (40.8 | ) | 6.8 | ||||||||||
Fair value gain (loss) adjustments, net | 1.3 | (9.2 | ) | (116.0 | ) | (28.6 | ) | |||||||||
Other | 8.1 | 5.2 | 28.2 | 30.5 | ||||||||||||
Total non-interest income | 90.5 | 61.5 | 280.7 | 324.6 | ||||||||||||
Non-interest expenses: | ||||||||||||||||
Salaries and employee benefits | 134.6 | 125.7 | 566.3 | 539.5 | ||||||||||||
Deposit costs | 131.0 | 82.2 | 436.7 | 165.8 | ||||||||||||
Insurance | 108.6 | 8.9 | 190.4 | 31.1 | ||||||||||||
Data processing | 33.1 | 23.9 | 122.0 | 83.0 | ||||||||||||
Legal, professional, and directors' fees | 29.4 | 26.0 | 107.2 | 99.9 | ||||||||||||
Occupancy | 16.9 | 15.8 | 65.6 | 55.5 | ||||||||||||
Loan servicing expenses | 14.7 | 14.8 | 58.8 | 55.5 | ||||||||||||
Business development and marketing | 6.7 | 7.3 | 21.8 | 22.1 | ||||||||||||
Loan acquisition and origination expenses | 4.8 | 4.4 | 20.4 | 23.1 | ||||||||||||
Net loss (gain) on sales and valuations of repossessed and other assets | 0.3 | (0.3 | ) | 3.0 | (0.7 | ) | ||||||||||
Gain on extinguishment of debt | (39.3 | ) | - | (52.7 | ) | - | ||||||||||
Other | 21.1 | 24.7 | 83.9 | 81.9 | ||||||||||||
Total non-interest expense | 461.9 | 333.4 | 1,623.4 | 1,156.7 | ||||||||||||
Income before income taxes | 211.0 | 364.7 | 933.6 | 1,316.1 | ||||||||||||
Income tax expense | 63.1 | 71.7 | 211.2 | 258.8 | ||||||||||||
Net income | 147.9 | 293.0 | 722.4 | 1,057.3 | ||||||||||||
Dividends on preferred stock | 3.2 | 3.2 | 12.8 | 12.8 | ||||||||||||
Net income available to common stockholders | $ | 144.7 | $ | 289.8 | $ | 709.6 | $ | 1,044.5 | ||||||||
Earnings per common share: | ||||||||||||||||
Diluted shares | 108.7 | 108.4 | 108.5 | 107.6 | ||||||||||||
Diluted earnings per share | $ | 1.33 | $ | 2.67 | $ | 6.54 | $ | 9.70 | ||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Five Quarter Condensed Consolidated Income Statements | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 859.0 | $ | 860.8 | $ | 857.2 | $ | 832.7 | $ | 785.1 | ||||||||||
Investment securities | 136.2 | 122.8 | 112.4 | 96.1 | 89.4 | |||||||||||||||
Other | 43.8 | 43.0 | 31.2 | 40.1 | 13.8 | |||||||||||||||
Total interest income | 1,039.0 | 1,026.6 | 1,000.8 | 968.9 | 888.3 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 343.7 | 316.2 | 251.1 | 231.6 | 157.6 | |||||||||||||||
Qualifying debt | 9.6 | 9.5 | 9.5 | 9.3 | 9.1 | |||||||||||||||
Borrowings | 94.0 | 113.9 | 189.9 | 118.1 | 81.9 | |||||||||||||||
Total interest expense | 447.3 | 439.6 | 450.5 | 359.0 | 248.6 | |||||||||||||||
Net interest income | 591.7 | 587.0 | 550.3 | 609.9 | 639.7 | |||||||||||||||
Provision for credit losses | 9.3 | 12.1 | 21.8 | 19.4 | 3.1 | |||||||||||||||
Net interest income after provision for credit losses | 582.4 | 574.9 | 528.5 | 590.5 | 636.6 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Net gain on loan origination and sale activities | 47.8 | 52.0 | 62.3 | 31.4 | 25.4 | |||||||||||||||
Service charges and fees | 22.7 | 23.3 | 20.8 | 9.5 | 5.9 | |||||||||||||||
Income from equity investments | 13.1 | 0.5 | 0.7 | 1.4 | 4.2 | |||||||||||||||
Net loan servicing revenue | 9.1 | 27.2 | 24.1 | 41.9 | 21.4 | |||||||||||||||
Commercial banking related income | 5.9 | 5.6 | 6.0 | 6.2 | 5.5 | |||||||||||||||
(Loss) gain on recovery from credit guarantees | (2.7 | ) | (4.0 | ) | 1.2 | 3.3 | 3.0 | |||||||||||||
(Loss) gain on sales of investment securities | (14.8 | ) | 0.1 | (13.6 | ) | (12.5 | ) | 0.1 | ||||||||||||
Fair value gain (loss) adjustments, net | 1.3 | 17.8 | 12.7 | (147.8 | ) | (9.2 | ) | |||||||||||||
Other | 8.1 | 6.7 | 4.8 | 8.6 | 5.2 | |||||||||||||||
Total non-interest income | 90.5 | 129.2 | 119.0 | (58.0 | ) | 61.5 | ||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Salaries and employee benefits | 134.6 | 137.2 | 145.6 | 148.9 | 125.7 | |||||||||||||||
Deposit costs | 131.0 | 127.8 | 91.0 | 86.9 | 82.2 | |||||||||||||||
Insurance | 108.6 | 33.1 | 33.0 | 15.7 | 8.9 | |||||||||||||||
Data processing | 33.1 | 33.9 | 28.6 | 26.4 | 23.9 | |||||||||||||||
Legal, professional, and directors' fees | 29.4 | 28.3 | 26.4 | 23.1 | 26.0 | |||||||||||||||
Occupancy | 16.9 | 16.8 | 15.4 | 16.5 | 15.8 | |||||||||||||||
Loan servicing expenses | 14.7 | 11.9 | 18.4 | 13.8 | 14.8 | |||||||||||||||
Business development and marketing | 6.7 | 4.9 | 5.0 | 5.2 | 7.3 | |||||||||||||||
Loan acquisition and origination expenses | 4.8 | 5.6 | 5.6 | 4.4 | 4.4 | |||||||||||||||
Net loss (gain) on sales and valuations of repossessed and other assets | 0.3 | 2.2 | 0.5 | 0.0 | (0.3 | ) | ||||||||||||||
Gain on extinguishment of debt | (39.3 | ) | - | (0.7 | ) | (12.7 | ) | - | ||||||||||||
Other | 21.1 | 24.5 | 18.6 | 19.7 | 24.7 | |||||||||||||||
Total non-interest expense | 461.9 | 426.2 | 387.4 | 347.9 | 333.4 | |||||||||||||||
Income before income taxes | 211.0 | 277.9 | 260.1 | 184.6 | 364.7 | |||||||||||||||
Income tax expense | 63.1 | 61.3 | 44.4 | 42.4 | 71.7 | |||||||||||||||
Net income | 147.9 | 216.6 | 215.7 | 142.2 | 293.0 | |||||||||||||||
Dividends on preferred stock | 3.2 | 3.2 | 3.2 | 3.2 | 3.2 | |||||||||||||||
Net income available to common stockholders | $ | 144.7 | $ | 213.4 | $ | 212.5 | $ | 139.0 | $ | 289.8 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
Diluted shares | 108.7 | 108.5 | 108.3 | 108.3 | 108.4 | |||||||||||||||
Diluted earnings per share | $ | 1.33 | $ | 1.97 | $ | 1.96 | $ | 1.28 | $ | 2.67 | ||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Five Quarter Condensed Consolidated Balance Sheets | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and due from banks | $ | 1,576 | $ | 3,497 | $ | 2,153 | $ | 3,639 | $ | 1,043 | ||||||||||
Investment securities | 12,993 | 11,423 | 10,374 | 9,493 | 8,760 | |||||||||||||||
Loans held for sale | 1,402 | 1,766 | 3,156 | 7,022 | 1,184 | |||||||||||||||
Loans held for investment: | ||||||||||||||||||||
Commercial and industrial | 19,103 | 18,344 | 16,657 | 15,503 | 20,710 | |||||||||||||||
Commercial real estate - non-owner occupied | 9,650 | 9,810 | 9,913 | 9,617 | 9,319 | |||||||||||||||
Commercial real estate - owner occupied | 1,810 | 1,771 | 1,805 | 1,809 | 1,818 | |||||||||||||||
Construction and land development | 4,889 | 4,669 | 4,428 | 4,407 | 4,013 | |||||||||||||||
Residential real estate | 14,778 | 14,779 | 15,000 | 15,024 | 15,928 | |||||||||||||||
Consumer | 67 | 74 | 72 | 75 | 74 | |||||||||||||||
Loans HFI, net of deferred fees | 50,297 | 49,447 | 47,875 | 46,435 | 51,862 | |||||||||||||||
Allowance for loan losses | (337 | ) | (327 | ) | (321 | ) | (305 | ) | (310 | ) | ||||||||||
Loans HFI, net of deferred fees and allowance | 49,960 | 49,120 | 47,554 | 46,130 | 51,552 | |||||||||||||||
Mortgage servicing rights | 1,124 | 1,233 | 1,007 | 910 | 1,148 | |||||||||||||||
Premises and equipment, net | 339 | 327 | 315 | 293 | 276 | |||||||||||||||
Operating lease right-of-use asset | 145 | 150 | 151 | 156 | 163 | |||||||||||||||
Other assets acquired through foreclosure, net | 8 | 8 | 11 | 11 | 11 | |||||||||||||||
Bank owned life insurance | 186 | 184 | 184 | 183 | 182 | |||||||||||||||
Goodwill and other intangibles, net | 669 | 672 | 674 | 677 | 680 | |||||||||||||||
Other assets | 2,460 | 2,511 | 2,581 | 2,533 | 2,735 | |||||||||||||||
Total assets | $ | 70,862 | $ | 70,891 | $ | 68,160 | $ | 71,047 | $ | 67,734 | ||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Non-interest bearing demand deposits | $ | 14,520 | $ | 17,991 | $ | 16,733 | $ | 16,465 | $ | 19,691 | ||||||||||
Interest bearing: | ||||||||||||||||||||
Demand | 15,916 | 12,843 | 12,646 | 10,719 | 9,507 | |||||||||||||||
Savings and money market | 14,791 | 14,672 | 13,085 | 13,845 | 19,397 | |||||||||||||||
Certificates of deposit | 10,106 | 8,781 | 8,577 | 6,558 | 5,049 | |||||||||||||||
Total deposits | 55,333 | 54,287 | 51,041 | 47,587 | 53,644 | |||||||||||||||
Borrowings | 7,230 | 8,745 | 9,567 | 15,853 | 6,299 | |||||||||||||||
Qualifying debt | 895 | 890 | 888 | 895 | 893 | |||||||||||||||
Operating lease liability | 179 | 180 | 179 | 184 | 185 | |||||||||||||||
Accrued interest payable and other liabilities | 1,147 | 1,043 | 800 | 1,007 | 1,357 | |||||||||||||||
Total liabilities | 64,784 | 65,145 | 62,475 | 65,526 | 62,378 | |||||||||||||||
Stockholders' Equity: | ||||||||||||||||||||
Preferred stock | 295 | 295 | 295 | 295 | 295 | |||||||||||||||
Common stock and additional paid-in capital | 2,081 | 2,073 | 2,064 | 2,054 | 2,058 | |||||||||||||||
Retained earnings | 4,215 | 4,111 | 3,937 | 3,764 | 3,664 | |||||||||||||||
Accumulated other comprehensive loss | (513 | ) | (733 | ) | (611 | ) | (592 | ) | (661 | ) | ||||||||||
Total stockholders' equity | 6,078 | 5,746 | 5,685 | 5,521 | 5,356 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 70,862 | $ | 70,891 | $ | 68,160 | $ | 71,047 | $ | 67,734 | ||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Changes in the Allowance For Credit Losses on Loans | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Allowance for loan losses | ||||||||||||||||||||
Balance, beginning of period | $ | 327.4 | $ | 321.1 | $ | 304.7 | $ | 309.7 | $ | 304.1 | ||||||||||
Provision for credit losses (1) | 17.8 | 14.3 | 23.8 | 1.0 | 7.4 | |||||||||||||||
Recoveries of loans previously charged-off: | ||||||||||||||||||||
Commercial and industrial | 0.7 | 0.4 | 0.7 | 3.2 | 0.3 | |||||||||||||||
Commercial real estate - non-owner occupied | - | - | - | - | - | |||||||||||||||
Commercial real estate - owner occupied | 0.1 | - | - | - | 0.1 | |||||||||||||||
Construction and land development | - | - | - | - | - | |||||||||||||||
Residential real estate | - | 0.1 | - | - | - | |||||||||||||||
Consumer | - | - | 0.1 | - | - | |||||||||||||||
Total recoveries | 0.8 | 0.5 | 0.8 | 3.2 | 0.4 | |||||||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial and industrial | 9.3 | 5.5 | 6.0 | 9.1 | 1.1 | |||||||||||||||
Commercial real estate - non-owner occupied | - | 3.0 | 2.2 | - | - | |||||||||||||||
Commercial real estate - owner occupied | - | - | - | - | 0.5 | |||||||||||||||
Construction and land development | - | - | - | - | 0.6 | |||||||||||||||
Residential real estate | - | - | - | - | - | |||||||||||||||
Consumer | - | - | - | 0.1 | - | |||||||||||||||
Total loans charged-off | 9.3 | 8.5 | 8.2 | 9.2 | 2.2 | |||||||||||||||
Net loan charge-offs | 8.5 | 8.0 | 7.4 | 6.0 | 1.8 | |||||||||||||||
Balance, end of period | $ | 336.7 | $ | 327.4 | $ | 321.1 | $ | 304.7 | $ | 309.7 | ||||||||||
Allowance for unfunded loan commitments | ||||||||||||||||||||
Balance, beginning of period | $ | 37.9 | $ | 41.1 | $ | 44.8 | $ | 47.0 | $ | 52.1 | ||||||||||
Recovery of credit losses (1) | (6.3 | ) | (3.2 | ) | (3.7 | ) | (2.2 | ) | (5.1 | ) | ||||||||||
Balance, end of period (2) | $ | 31.6 | $ | 37.9 | $ | 41.1 | $ | 44.8 | $ | 47.0 | ||||||||||
Components of the allowance for credit losses on loans | ||||||||||||||||||||
Allowance for loan losses | $ | 336.7 | $ | 327.4 | $ | 321.1 | $ | 304.7 | $ | 309.7 | ||||||||||
Allowance for unfunded loan commitments | 31.6 | 37.9 | 41.1 | 44.8 | 47.0 | |||||||||||||||
Total allowance for credit losses on loans | $ | 368.3 | $ | 365.3 | $ | 362.2 | $ | 349.5 | $ | 356.7 | ||||||||||
Net charge-offs to average loans - annualized | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | 0.01 | % | ||||||||||
Allowance ratios | ||||||||||||||||||||
Allowance for loan losses to funded HFI loans (3) | 0.67 | % | 0.66 | % | 0.67 | % | 0.66 | % | 0.60 | % | ||||||||||
Allowance for credit losses to funded HFI loans (3) | 0.73 | 0.74 | 0.76 | 0.75 | 0.69 | |||||||||||||||
Allowance for loan losses to nonaccrual HFI loans | 123 | 138 | 125 | 285 | 364 | |||||||||||||||
Allowance for credit losses to nonaccrual HFI loans | 135 | 154 | 141 | 327 | 420 | |||||||||||||||
(1) | The above tables reflect the provision for credit losses on funded and unfunded loans. There was a $3.3 million provision release on AFS investment securities and a $1.1 million provision for credit losses on HTM investment securities for the three months ended December 31, 2023. The allowance for credit losses on AFS and HTM investment securities totaled $1.4 million and $7.8 million, respectively, as of December 31, 2023. | |
(2) | The allowance for unfunded loan commitments is included as part of accrued interest payable and other liabilities on the balance sheet. | |
(3) | Ratio includes an allowance for credit losses of $14.7 million as of December 31, 2023 related to a pool of loans covered under three separate credit linked note transactions. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Asset Quality Metrics | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Nonaccrual loans and repossessed assets | ||||||||||||||||||||
Nonaccrual loans | $ | 273 | $ | 237 | $ | 256 | $ | 107 | $ | 85 | ||||||||||
Nonaccrual loans to funded HFI loans | 0.54 | % | 0.48 | % | 0.53 | % | 0.23 | % | 0.16 | % | ||||||||||
Repossessed assets | $ | 8 | $ | 8 | $ | 11 | $ | 11 | $ | 11 | ||||||||||
Nonaccrual loans and repossessed assets to total assets | 0.40 | % | 0.35 | % | 0.39 | % | 0.17 | % | 0.14 | % | ||||||||||
Loans Past Due | ||||||||||||||||||||
Loans past due 90 days, still accruing (1) | $ | 42 | $ | - | $ | - | $ | 1 | $ | - | ||||||||||
Loans past due 90 days, still accruing to funded HFI loans | 0.08 | % | - | % | - | % | 0.00 | % | - | % | ||||||||||
Loans past due 30 to 89 days, still accruing (2) | $ | 164 | $ | 189 | $ | 121 | $ | 58 | $ | 70 | ||||||||||
Loans past due 30 to 89 days, still accruing to funded HFI loans | 0.33 | % | 0.38 | % | 0.25 | % | 0.13 | % | 0.13 | % | ||||||||||
Other credit quality metrics | ||||||||||||||||||||
Special mention loans | $ | 641 | $ | 668 | $ | 694 | $ | 320 | $ | 351 | ||||||||||
Special mention loans to funded HFI loans | 1.27 | % | 1.35 | % | 1.45 | % | 0.69 | % | 0.68 | % | ||||||||||
Classified loans on accrual | $ | 379 | $ | 381 | $ | 324 | $ | 325 | $ | 280 | ||||||||||
Classified loans on accrual to funded HFI loans | 0.75 | % | 0.77 | % | 0.68 | % | 0.70 | % | 0.54 | % | ||||||||||
Classified assets | $ | 673 | $ | 639 | $ | 604 | $ | 459 | $ | 393 | ||||||||||
Classified assets to total assets | 0.95 | % | 0.90 | % | 0.89 | % | 0.65 | % | 0.58 | % | ||||||||||
(1) | Excludes government guaranteed residential mortgage loans of $399 million, $439 million, $481 million, $494 million, and $582 million as of each respective date in the table above. | |
(2) | Excludes government guaranteed residential mortgage loans of $279 million, $261 million, $289 million, $281 million, and $334 million as of each respective date in the table above. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Analysis of Average Balances, Yields and Rates | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
December 31, 2023 | September 30, 2023 | |||||||||||||||||||
Average
| Interest | Average Yield /
| Average
| Interest | Average Yield /
| |||||||||||||||
($ in millions) | ||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||
Loans held for sale | $ | 1,830 | $ | 29.6 | 6.42 | % | $ | 3,069 | $ | 47.3 | 6.11 | % | ||||||||
Loans held for investment: | ||||||||||||||||||||
Commercial and industrial | 18,530 | 343.2 | 7.40 | 16,855 | 324.3 | 7.70 | ||||||||||||||
CRE - non-owner occupied | 9,715 | 188.7 | 7.71 | 9,950 | 196.1 | 7.83 | ||||||||||||||
CRE - owner occupied | 1,786 | 26.0 | 5.88 | 1,790 | 26.4 | 5.97 | ||||||||||||||
Construction and land development | 4,789 | 112.6 | 9.33 | 4,545 | 110.3 | 9.63 | ||||||||||||||
Residential real estate | 14,758 | 157.6 | 4.24 | 14,914 | 155.0 | 4.12 | ||||||||||||||
Consumer | 71 | 1.3 | 7.52 | 73 | 1.4 | 7.43 | ||||||||||||||
Total HFI loans (1), (2), (3) | 49,649 | 829.4 | 6.65 | 48,127 | 813.5 | 6.73 | ||||||||||||||
Securities: | ||||||||||||||||||||
Securities - taxable | 9,168 | 113.5 | 4.91 | 8,272 | 101.1 | 4.85 | ||||||||||||||
Securities - tax-exempt | 2,106 | 22.7 | 5.35 | 2,103 | 21.7 | 5.12 | ||||||||||||||
Total securities (1) | 11,274 | 136.2 | 4.99 | 10,375 | 122.8 | 4.91 | ||||||||||||||
Cash and other | 2,572 | 43.8 | 6.75 | 2,911 | 43.0 | 5.87 | ||||||||||||||
Total interest earning assets | 65,325 | 1,039.0 | 6.37 | 64,482 | 1,026.6 | 6.37 | ||||||||||||||
Non-interest earning assets | ||||||||||||||||||||
Cash and due from banks | 287 | 279 | ||||||||||||||||||
Allowance for credit losses | (340 | ) | (334 | ) | ||||||||||||||||
Bank owned life insurance | 185 | 184 | ||||||||||||||||||
Other assets | 4,525 | 4,513 | ||||||||||||||||||
Total assets | $ | 69,982 | $ | 69,124 | ||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest-bearing transaction accounts | $ | 14,268 | $ | 104.6 | 2.91 | % | $ | 12,947 | $ | 98.9 | 3.03 | % | ||||||||
Savings and money market | 14,595 | 119.1 | 3.24 | 13,832 | 106.3 | 3.05 | ||||||||||||||
Certificates of deposit | 9,453 | 120.0 | 5.03 | 9,125 | 111.0 | 4.83 | ||||||||||||||
Total interest-bearing deposits | 38,316 | 343.7 | 3.56 | 35,904 | 316.2 | 3.49 | ||||||||||||||
Short-term borrowings | 5,492 | 79.4 | 5.74 | 6,260 | 97.2 | 6.16 | ||||||||||||||
Long-term debt | 594 | 14.6 | 9.73 | 764 | 16.7 | 8.68 | ||||||||||||||
Qualifying debt | 891 | 9.6 | 4.26 | 888 | 9.5 | 4.26 | ||||||||||||||
Total interest-bearing liabilities | 45,293 | 447.3 | 3.92 | 43,816 | 439.6 | 3.98 | ||||||||||||||
Interest cost of funding earning assets | 2.72 | 2.70 | ||||||||||||||||||
Non-interest-bearing liabilities | ||||||||||||||||||||
Non-interest-bearing demand deposits | 17,579 | 18,402 | ||||||||||||||||||
Other liabilities | 1,330 | 1,052 | ||||||||||||||||||
Stockholders' equity | 5,780 | 5,854 | ||||||||||||||||||
Total liabilities and stockholders' equity | $ | 69,982 | $ | 69,124 | ||||||||||||||||
Net interest income and margin (4) | $ | 591.7 | 3.65 | % | $ | 587.0 | 3.67 | % | ||||||||||||
(1) | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.1 million and $8.9 million for the three months ended December 31, 2023 and September 30, 2023, respectively. | |
(2) | Included in the yield computation are net loan fees of $30.8 million and $28.0 million for the three months ended December 31, 2023 and September 30, 2023, respectively. | |
(3) | Includes non-accrual loans. | |
(4) | Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Analysis of Average Balances, Yields and Rates | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
Average
| Interest | Average Yield /
| Average
| Interest | Average Yield /
| |||||||||||||||
($ in millions) | ||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||
Loans held for sale | $ | 1,830 | $ | 29.6 | 6.42 | % | $ | 2,659 | $ | 37.8 | 5.63 | % | ||||||||
Loans held for investment: | ||||||||||||||||||||
Commercial and industrial | 18,530 | 343.2 | 7.40 | 21,654 | 349.3 | 6.45 | ||||||||||||||
CRE - non-owner-occupied | 9,715 | 188.7 | 7.71 | 9,077 | 148.8 | 6.51 | ||||||||||||||
CRE - owner-occupied | 1,786 | 26.0 | 5.88 | 1,830 | 24.4 | 5.39 | ||||||||||||||
Construction and land development | 4,789 | 112.6 | 9.33 | 3,798 | 80.2 | 8.38 | ||||||||||||||
Residential real estate | 14,758 | 157.6 | 4.24 | 15,803 | 143.5 | 3.60 | ||||||||||||||
Consumer | 71 | 1.3 | 7.52 | 71 | 1.1 | 6.26 | ||||||||||||||
Total loans HFI (1), (2), (3) | 49,649 | 829.4 | 6.65 | 52,233 | 747.3 | 5.70 | ||||||||||||||
Securities: | ||||||||||||||||||||
Securities - taxable | 9,168 | 113.5 | 4.91 | 6,397 | 68.4 | 4.25 | ||||||||||||||
Securities - tax-exempt | 2,106 | 22.7 | 5.35 | 2,068 | 21.0 | 5.07 | ||||||||||||||
Total securities (1) | 11,274 | 136.2 | 4.99 | 8,465 | 89.4 | 4.45 | ||||||||||||||
Cash and other | 2,572 | 43.8 | 6.75 | 1,361 | 13.8 | 4.02 | ||||||||||||||
Total interest earning assets | 65,325 | 1,039.0 | 6.37 | 64,718 | 888.3 | 5.50 | ||||||||||||||
Non-interest earning assets | ||||||||||||||||||||
Cash and due from banks | 287 | 289 | ||||||||||||||||||
Allowance for credit losses | (340 | ) | (308 | ) | ||||||||||||||||
Bank owned life insurance | 185 | 181 | ||||||||||||||||||
Other assets | 4,525 | 4,613 | ||||||||||||||||||
Total assets | $ | 69,982 | $ | 69,493 | ||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest-bearing transaction accounts | $ | 14,268 | $ | 104.6 | 2.91 | % | $ | 8,754 | $ | 43.6 | 1.98 | % | ||||||||
Savings and money market accounts | 14,595 | 119.1 | 3.24 | 18,651 | 88.0 | 1.87 | ||||||||||||||
Certificates of deposit | 9,453 | 120.0 | 5.03 | 4,260 | 26.0 | 2.42 | ||||||||||||||
Total interest-bearing deposits | 38,316 | 343.7 | 3.56 | 31,665 | 157.6 | 1.97 | ||||||||||||||
Short-term borrowings | 5,492 | 79.4 | 5.74 | 5,440 | 54.8 | 3.99 | ||||||||||||||
Long-term debt | 594 | 14.6 | 9.73 | 1,240 | 27.1 | 8.68 | ||||||||||||||
Qualifying debt | 891 | 9.6 | 4.26 | 890 | 9.1 | 4.08 | ||||||||||||||
Total interest-bearing liabilities | 45,293 | 447.3 | 3.92 | 39,235 | 248.6 | 2.51 | ||||||||||||||
Interest cost of funding earning assets | 2.72 | 1.52 | ||||||||||||||||||
Non-interest-bearing liabilities | ||||||||||||||||||||
Non-interest-bearing demand deposits | 17,579 | 23,729 | ||||||||||||||||||
Other liabilities | 1,330 | 1,296 | ||||||||||||||||||
Stockholders' equity | 5,780 | 5,233 | ||||||||||||||||||
Total liabilities and stockholders' equity | $ | 69,982 | $ | 69,493 | ||||||||||||||||
Net interest income and margin (4) | $ | 591.7 | 3.65 | % | $ | 639.7 | 3.98 | % | ||||||||||||
(1) | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.1 million and $9.0 million for the three months ended December 31, 2023 and 2022, respectively. | |
(2) | Included in the yield computation are net loan fees of $30.8 million and $34.8 million for the three months ended December 31, 2023 and 2022, respectively. | |
(3) | Includes non-accrual loans. | |
(4) | Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||||||
Analysis of Average Balances, Yields and Rates | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
Average
| Interest | Average Yield /
| Average
| Interest | Average Yield /
| |||||||||||||||
($ in millions) | ||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||
Loans HFS | $ | 3,347 | $ | 213.4 | 6.38 | % | $ | 4,364 | $ | 180.3 | 4.13 | % | ||||||||
Loans HFI: | ||||||||||||||||||||
Commercial and industrial | 17,886 | 1,337.9 | 7.54 | 20,083 | 1,002.8 | 5.05 | ||||||||||||||
CRE - non-owner occupied | 9,736 | 734.8 | 7.56 | 7,769 | 416.4 | 5.37 | ||||||||||||||
CRE - owner occupied | 1,800 | 102.3 | 5.79 | 1,841 | 93.2 | 5.16 | ||||||||||||||
Construction and land development | 4,498 | 419.7 | 9.33 | 3,426 | 229.1 | 6.69 | ||||||||||||||
Residential real estate | 15,126 | 596.4 | 3.94 | 13,771 | 468.5 | 3.40 | ||||||||||||||
Consumer | 72 | 5.2 | 7.23 | 61 | 3.1 | 5.07 | ||||||||||||||
Total loans HFI (1), (2), (3) | 49,118 | 3,196.3 | 6.53 | 46,951 | 2,213.1 | 4.74 | ||||||||||||||
Securities: | ||||||||||||||||||||
Securities - taxable | 8,002 | 381.3 | 4.76 | 6,325 | 195.3 | 3.09 | ||||||||||||||
Securities - tax-exempt | 2,097 | 86.2 | 5.15 | 2,067 | 77.3 | 4.68 | ||||||||||||||
Total securities (1) | 10,099 | 467.5 | 4.84 | 8,392 | 272.6 | 3.48 | ||||||||||||||
Other | 2,848 | 158.1 | 5.55 | 1,574 | 25.8 | 1.64 | ||||||||||||||
Total interest earning assets (4) | 65,412 | 4,035.3 | 6.22 | 61,281 | 2,691.8 | 4.45 | ||||||||||||||
Non-interest earning assets | ||||||||||||||||||||
Cash and due from banks | 273 | 260 | ||||||||||||||||||
Allowance for credit losses | (326 | ) | (280 | ) | ||||||||||||||||
Bank owned life insurance | 183 | 180 | ||||||||||||||||||
Other assets | 4,581 | 3,948 | ||||||||||||||||||
Total assets | $ | 70,123 | $ | 65,389 | ||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest-bearing transaction accounts | $ | 12,422 | $ | 352.0 | 2.83 | % | $ | 8,331 | $ | 78.8 | 0.95 | % | ||||||||
Savings and money market accounts | 14,903 | 428.1 | 2.87 | 18,518 | 158.6 | 0.86 | ||||||||||||||
Certificates of deposit | 7,945 | 362.5 | 4.56 | 2,772 | 39.0 | 1.40 | ||||||||||||||
Total interest-bearing deposits | 35,270 | 1,142.6 | 3.24 | 29,621 | 276.4 | 0.93 | ||||||||||||||
Short-term borrowings | 7,800 | 434.6 | 5.57 | 3,424 | 92.1 | 2.69 | ||||||||||||||
Long-term debt | 862 | 81.3 | 9.43 | 1,008 | 72.0 | 7.14 | ||||||||||||||
Qualifying debt | 892 | 37.9 | 4.25 | 893 | 35.0 | 3.92 | ||||||||||||||
Total interest-bearing liabilities | 44,824 | 1,696.4 | 3.78 | 34,946 | 475.5 | 1.36 | ||||||||||||||
Interest cost of funding earning assets | 2.59 | 0.78 | ||||||||||||||||||
Non-interest-bearing liabilities | ||||||||||||||||||||
Non-interest-bearing demand deposits | 18,293 | 24,133 | ||||||||||||||||||
Other liabilities | 1,287 | 1,211 | ||||||||||||||||||
Stockholders' equity | 5,719 | 5,099 | ||||||||||||||||||
Total liabilities and stockholders' equity | $ | 70,123 | $ | 65,389 | ||||||||||||||||
Net interest income and margin (5) | $ | 2,338.9 | 3.63 | % | $ | 2,216.3 | 3.67 | % | ||||||||||||
(1) | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $35.5 million and $33.7 million for the year ended December 31, 2023 and 2022, respectively. | |
(2) | Included in the yield computation are net loan fees of $131.2 million and $132.2 million for the year ended December 31, 2023 and 2022, respectively. | |
(3) | Includes non-accrual loans. | |
(4) | Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis. |
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||
Operating Segment Results | ||||||||||||||||
Unaudited | ||||||||||||||||
Balance Sheet: | ||||||||||||||||
Consolidated
| Commercial | Consumer
| Corporate &
| |||||||||||||
At December 31, 2023: | (dollars in millions) | |||||||||||||||
Assets: | ||||||||||||||||
Cash, cash equivalents, and investment securities | $ | 14,569 | $ | 13 | $ | 125 | $ | 14,431 | ||||||||
Loans HFS | 1,402 | - | 1,402 | - | ||||||||||||
Loans HFI, net of deferred fees and costs | 50,297 | 29,136 | 21,161 | - | ||||||||||||
Less: allowance for credit losses | (337 | ) | (284 | ) | (53 | ) | - | |||||||||
Net loans HFI | 49,960 | 28,852 | 21,108 | - | ||||||||||||
Other assets acquired through foreclosure, net | 8 | 8 | - | - | ||||||||||||
Goodwill and other intangible assets, net | 669 | 292 | 377 | - | ||||||||||||
Other assets | 4,254 | 390 | 1,826 | 2,038 | ||||||||||||
Total assets | $ | 70,862 | $ | 29,555 | $ | 24,838 | $ | 16,469 | ||||||||
Liabilities: | ||||||||||||||||
Deposits | $ | 55,333 | $ | 23,897 | $ | 24,925 | $ | 6,511 | ||||||||
Borrowings and qualifying debt | 8,125 | 7 | 402 | 7,716 | ||||||||||||
Other liabilities | 1,326 | 109 | 338 | 879 | ||||||||||||
Total liabilities | 64,784 | 24,013 | 25,665 | 15,106 | ||||||||||||
Allocated equity: | 6,078 | 2,555 | 1,300 | 2,223 | ||||||||||||
Total liabilities and stockholders' equity | $ | 70,862 | $ | 26,568 | $ | 26,965 | $ | 17,329 | ||||||||
Excess funds provided (used) | - | (2,987 | ) | 2,127 | 860 | |||||||||||
No. of offices | 57 | 46 | 8 | 3 | ||||||||||||
No. of full-time equivalent employees | 3,260 | 584 | 711 | 1,965 | ||||||||||||
Income Statement: | ||||||||||||||||
Three Months Ended December 31, 2023: | (in millions) | |||||||||||||||
Net interest income | $ | 591.7 | $ | 309.9 | $ | 251.1 | $ | 30.7 | ||||||||
Provision for (recovery of) credit losses | 9.3 | 8.6 | 2.9 | (2.2 | ) | |||||||||||
Net interest income after provision for credit losses | 582.4 | 301.3 | 248.2 | 32.9 | ||||||||||||
Non-interest income | 90.5 | 16.8 | 60.3 | 13.4 | ||||||||||||
Non-interest expense | 461.9 | 149.7 | 232.9 | 79.3 | ||||||||||||
Income (loss) before income taxes | 211.0 | 168.4 | 75.6 | (33.0 | ) | |||||||||||
Income tax expense (benefit) | 63.1 | 49.7 | 19.8 | (6.4 | ) | |||||||||||
Net income (loss) | $ | 147.9 | $ | 118.7 | $ | 55.8 | $ | (26.6 | ) | |||||||
Year Ended December 31, 2023: | (in millions) | |||||||||||||||
Net interest income | $ | 2,338.9 | $ | 1,387.4 | $ | 898.9 | $ | 52.6 | ||||||||
Provision for credit losses | 62.6 | 38.3 | 3.3 | 21.0 | ||||||||||||
Net interest income after provision for credit losses | 2,276.3 | 1,349.1 | 895.6 | 31.6 | ||||||||||||
Non-interest income | 280.7 | (23.3 | ) | 286.9 | 17.1 | |||||||||||
Non-interest expense | 1,623.4 | 580.6 | 924.5 | 118.3 | ||||||||||||
Income (loss) before provision for income taxes | 933.6 | 745.2 | 258.0 | (69.6 | ) | |||||||||||
Income tax expense (benefit) | 211.2 | 174.8 | 59.2 | (22.8 | ) | |||||||||||
Net income (loss) | $ | 722.4 | $ | 570.4 | $ | 198.8 | $ | (46.8 | ) | |||||||
Western Alliance Bancorporation and Subsidiaries | ||||||||||||||||
Operating Segment Results | ||||||||||||||||
Unaudited | ||||||||||||||||
Balance Sheet: | ||||||||||||||||
Consolidated
| Commercial | Consumer
| Corporate &
| |||||||||||||
At December 31, 2022: | (dollars in millions) | |||||||||||||||
Assets: | ||||||||||||||||
Cash, cash equivalents, and investment securities | $ | 9,803 | $ | 12 | $ | - | $ | 9,791 | ||||||||
Loans held for sale | 1,184 | - | 1,184 | - | ||||||||||||
Loans, net of deferred fees and costs | 51,862 | 31,414 | 20,448 | - | ||||||||||||
Less: allowance for credit losses | (310 | ) | (262 | ) | (48 | ) | - | |||||||||
Total loans | 51,552 | 31,152 | 20,400 | - | ||||||||||||
Other assets acquired through foreclosure, net | 11 | 11 | - | - | ||||||||||||
Goodwill and other intangible assets, net | 680 | 293 | 387 | - | ||||||||||||
Other assets | 4,504 | 435 | 2,180 | 1,889 | ||||||||||||
Total assets | $ | 67,734 | $ | 31,903 | $ | 24,151 | $ | 11,680 | ||||||||
Liabilities: | ||||||||||||||||
Deposits | $ | 53,644 | $ | 29,494 | $ | 18,492 | $ | 5,658 | ||||||||
Borrowings and qualifying debt | 7,192 | 27 | 340 | 6,825 | ||||||||||||
Other liabilities | 1,542 | 83 | 656 | 803 | ||||||||||||
Total liabilities | 62,378 | 29,604 | 19,488 | 13,286 | ||||||||||||
Allocated equity: | 5,356 | 2,684 | 1,691 | 981 | ||||||||||||
Total liabilities and stockholders' equity | $ | 67,734 | $ | 32,288 | $ | 21,179 | $ | 14,267 | ||||||||
Excess funds provided (used) | - | 385 | (2,972 | ) | 2,587 | |||||||||||
No. of offices | 56 | 46 | 8 | 2 | ||||||||||||
No. of full-time equivalent employees | 3,365 | 671 | 785 | 1,909 | ||||||||||||
Income Statement: | ||||||||||||||||
Three Months Ended December 31, 2022: | (in millions) | |||||||||||||||
Net interest income | $ | 639.7 | $ | 428.0 | $ | 216.4 | $ | (4.7 | ) | |||||||
Provision for (recovery of) credit losses | 3.1 | (5.9 | ) | 8.2 | 0.8 | |||||||||||
Net interest income (expense) after provision for credit losses | 636.6 | 433.9 | 208.2 | (5.5 | ) | |||||||||||
Non-interest income | 61.5 | 8.7 | 49.2 | 3.6 | ||||||||||||
Non-interest expense | 333.4 | 122.1 | 187.6 | 23.7 | ||||||||||||
Income (loss) before income taxes | 364.7 | 320.5 | 69.8 | (25.6 | ) | |||||||||||
Income tax expense (benefit) | 71.7 | 76.1 | 16.3 | (20.7 | ) | |||||||||||
Net income (loss) | $ | 293.0 | $ | 244.4 | $ | 53.5 | $ | (4.9 | ) | |||||||
Year Ended December 31, 2022: | (in millions) | |||||||||||||||
Net interest income | $ | 2,216.3 | $ | 1,546.3 | $ | 854.1 | $ | (184.1 | ) | |||||||
Provision for (recovery of) credit losses | 68.1 | 47.2 | 21.1 | (0.2 | ) | |||||||||||
Net interest income (expense) after provision for credit losses | 2,148.2 | 1,499.1 | 833.0 | (183.9 | ) | |||||||||||
Non-interest income | 324.6 | 59.7 | 247.2 | 17.7 | ||||||||||||
Non-interest expense | 1,156.7 | 463.5 | 630.1 | 63.1 | ||||||||||||
Income (loss) before income taxes | 1,316.1 | 1,095.3 | 450.1 | (229.3 | ) | |||||||||||
Income tax expense (benefit) | 258.8 | 260.5 | 107.1 | (108.8 | ) | |||||||||||
Net income (loss) | $ | 1,057.3 | $ | 834.8 | $ | 343.0 | $ | (120.5 | ) | |||||||
Western Alliance Bancorporation and Subsidiaries | |||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
Unaudited | |||||||||||||||
Pre-Provision Net Revenue by Quarter: | |||||||||||||||
Three Months Ended | |||||||||||||||
12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||
(in millions) | |||||||||||||||
Net interest income | $ | 591.7 | $ | 587.0 | $ | 550.3 | $ | 609.9 | $ | 639.7 | |||||
Total non-interest income | 90.5 | 129.2 | 119.0 | (58.0 | ) | 61.5 | |||||||||
Net revenue | $ | 682.2 | $ | 716.2 | $ | 669.3 | $ | 551.9 | $ | 701.2 | |||||
Total non-interest expense | 461.9 | 426.2 | 387.4 | 347.9 | 333.4 | ||||||||||
Pre-provision net revenue (1) | $ | 220.3 | $ | 290.0 | $ | 281.9 | $ | 204.0 | $ | 367.8 | |||||
Less: | |||||||||||||||
Provision for credit losses | 9.3 | 12.1 | 21.8 | 19.4 | 3.1 | ||||||||||
Income tax expense | 63.1 | 61.3 | 44.4 | 42.4 | 71.7 | ||||||||||
Net income | $ | 147.9 | $ | 216.6 | $ | 215.7 | $ | 142.2 | $ | 293.0 | |||||
| Pre-Provision Net Revenue, Excluding Notable Items | ||||
Three Months Ended 12/31/2023: | (in millions) | |||
Pre-provision net revenue (1) | $ | 220.3 | ||
Excluding notable items: | ||||
Non-interest income | ||||
MSR fair value adjustments and sales, net of hedging | 25.3 | |||
Loss on sales of HFI loans | 3.7 | |||
Outsized solar investment gains | (8.0 | ) | ||
Loss on sales of investment securities | 14.8 | |||
Non-interest expense | ||||
FDIC special assessment | 66.3 | |||
Gain on extinguishment of debt | (39.3 | ) | ||
Total notable items | 62.8 | |||
Pre-provision net revenue, excluding notable items (1) | $ | 283.1 | ||
Less: | ||||
Provision for credit losses | 9.3 | |||
Income tax expense | 63.1 | |||
Total notable items | 62.8 | |||
Net income | $ | 147.9 | ||
Three Months Ended | ||||||||||||||||||||
12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | ||||||||||||||||
Efficiency Ratio (Tax Equivalent Basis) by Quarter: | (dollars in millions) | |||||||||||||||||||
Total non-interest expense | $ | 461.9 | $ | 426.2 | $ | 387.4 | $ | 347.9 | $ | 333.4 | ||||||||||
Less: Deposit costs | 131.0 | 127.8 | 91.0 | 86.9 | 82.2 | |||||||||||||||
Total non-interest expense, excluding deposit costs | 330.9 | 298.4 | 296.4 | 261.0 | 251.2 | |||||||||||||||
Divided by: | ||||||||||||||||||||
Total net interest income | 591.7 | 587.0 | 550.3 | 609.9 | 639.7 | |||||||||||||||
Plus: | ||||||||||||||||||||
Tax equivalent interest adjustment | 9.1 | 8.9 | 8.7 | 8.8 | 9.0 | |||||||||||||||
Total non-interest income | 90.5 | 129.2 | 119.0 | (58.0 | ) | 61.5 | ||||||||||||||
Less: Deposit costs | 131.0 | 127.8 | 91.0 | 86.9 | 82.2 | |||||||||||||||
$ | 560.3 | $ | 597.3 | $ | 587.0 | $ | 473.8 | $ | 628.0 | |||||||||||
Efficiency ratio (2) | 66.8 | % | 58.8 | % | 57.1 | % | 62.0 | % | 46.9 | % | ||||||||||
Efficiency ratio, adjusted for deposit costs (2) | 59.1 | % | 50.0 | % | 50.5 | % | 55.1 | % | 40.0 | % | ||||||||||
Western Alliance Bancorporation and Subsidiaries | ||||
Reconciliation of Non-GAAP Financial Measures | ||||
Unaudited | ||||
Earnings per Share, Excluding Notable Items: | ||||
Three Months Ended 12/31/2023: | (in millions) | |||
Net income available to common stockholders | $ | 144.7 | ||
Excluding: | ||||
Total notable items (4) | 62.8 | |||
Income tax | ||||
Tax effect of notable items | (14.4 | ) | ||
Elevated effective tax rate | 14.6 | |||
Net income available to common stockholders, excluding notable items | $ | 207.7 | ||
Diluted shares | 108.7 | |||
Diluted earnings per share, excluding notable items (1) | $ | 1.91 | ||
Tangible Common Equity: | ||||||||||||||||||||
12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | ||||||||||||||||
(dollars and shares in millions) | ||||||||||||||||||||
Total stockholders' equity | $ | 6,078 | $ | 5,746 | $ | 5,685 | $ | 5,521 | $ | 5,356 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill and intangible assets | 669 | 672 | 674 | 677 | 680 | |||||||||||||||
Preferred stock | 295 | 295 | 295 | 295 | 295 | |||||||||||||||
Total tangible common equity | 5,114 | 4,779 | 4,716 | 4,549 | 4,381 | |||||||||||||||
Plus: deferred tax - attributed to intangible assets | 2 | 2 | 2 | 2 | 2 | |||||||||||||||
Total tangible common equity, net of tax | $ | 5,116 | $ | 4,781 | $ | 4,718 | $ | 4,551 | $ | 4,383 | ||||||||||
Total assets | $ | 70,862 | $ | 70,891 | $ | 68,160 | $ | 71,047 | $ | 67,734 | ||||||||||
Less: goodwill and intangible assets, net | 669 | 672 | 674 | 677 | 680 | |||||||||||||||
Tangible assets | 70,193 | 70,219 | 67,486 | 70,370 | 67,054 | |||||||||||||||
Plus: deferred tax - attributed to intangible assets | 2 | 2 | 2 | 2 | 2 | |||||||||||||||
Total tangible assets, net of tax | $ | 70,195 | $ | 70,221 | $ | 67,488 | $ | 70,372 | $ | 67,056 | ||||||||||
Tangible common equity ratio (3) | 7.3 | % | 6.8 | % | 7.0 | % | 6.5 | % | 6.5 | % | ||||||||||
Common shares outstanding | 109.5 | 109.5 | 109.5 | 109.5 | 108.9 | |||||||||||||||
Tangible book value per share, net of tax (3) | $ | 46.72 | $ | 43.66 | $ | 43.09 | $ | 41.56 | $ | 40.25 | ||||||||||
Return on Average Tangible Common Equity, Excluding Notable Items: | ||||
Three Months Ended 12/31/2023: | ||||
(in millions) | ||||
Net income available to common shareholders, excluding notable items | $ | 207.7 | ||
Divided by: | ||||
Average stockholders' equity | $ | 5,780 | ||
Less: | ||||
Average goodwill and intangible assets | 670 | |||
Average preferred stock | 295 | |||
Average tangible common equity | $ | 4,816 | ||
Return on average tangible common equity, excluding notable items (1) | 17.1 | % | ||
Return on Average Assets, Excluding Notable Items: | |||
Three Months Ended 12/31/2023: | |||
(in millions) | |||
Net income | $ | 147.9 | |
Excluding: | |||
Total notable items (4) | 62.8 | ||
Income tax | |||
Tax effect of notable items | (14.4 | ) | |
Elevated effective tax rate | 14.6 | ||
Net income, excluding notable items | $ | 210.9 | |
Divided by: | |||
Average assets | $ | 69,982 | |
Return on average assets, excluding notable items (1) | 1.20 | % | |
| Non-GAAP Financial Measures Footnotes | ||
(1) | We believe this non-GAAP measurement is a key indicator of the earnings power of the Company. | |
(2) | We believe this non-GAAP ratio provides a useful metric to measure the efficiency of the Company. | |
(3) | We believe this non-GAAP metric provides an important metric with which to analyze and evaluate the financial condition and capital strength of the Company. | |
(4) | See reconciliation of PPNR, excluding notable items, for additional detail regarding the components of notable items. | |
Contacts
Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
