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Third Quarter 2009 Highlights:
-- Record organic growth in customer deposits of $388 million during the quarter to $4.73 billion
-- Record customer funds (sum of deposits and customer repurchase agreements) of $5.00 billion, including organic growth of $352 million during the quarter
-- Regulatory capital of $669 million and a Total Risk-Based Capital ratio of 14.7 percent, well above the percentage considered "well capitalized" by federal banking standards
-- Record liquidity of $795 million held in cash and due from banks
-- Net revenue (sum of net interest income and non-interest income, excluding securities activities and losses on the sale of assets) of $57.1 million, down 1.5% from $58.0 million in the second quarter 2009 and down 0.3% from $57.3 million for the third quarter 2008
-- Interest margin of 3.69% during the quarter, including 42 basis point effect from record cash position, compared to 4.17% in second quarter 2009 and 4.36% in third quarter 2008
-- Incurred a net loss of $23.9 million in the third quarter 2009, compared to $14.1 million net loss in the second quarter 2009 and $94.7 million net loss in the third quarter 2008
-- Diluted net loss per common share of $0.37
Financial Performance
Western Alliance Bancorporation reported a net loss of $23.9 million in the third quarter 2009, including a reserve build of $20.0 million, net losses on the sale of assets of $7.3 million, and net gains from securities activities of $5.0 million. The net loss on asset sales includes $3.4 million in write downs on four bank-owned premises. These bank-owned premises are being consolidated into other branch facilities as part of the Company's efficiency improvement plan. The net gain from securities was primarily from sales of some adjustable rate preferred stock, which had been previously impaired.
Total loans declined $61 million to $3.97 billion at September 30, 2009 from $4.03 billion on June 30, 2009 and increased $21 million from $3.95 billion at September 30, 2008.
Customer funds increased $344 million to $5.00 billion at September 30, 2009 from June 30, 2009, comprised of a $380 million increase in deposits and a $36 million decrease in customer repurchase agreements. From September 30, 2008, customer funds increased $1.25 billion, comprised of a $1.28 billion increase in deposits and a $31 million decrease in customer repurchase agreements. Non-interest bearing title company deposits declined $33 million to $105 million during the 12 months ended September 30, 2009 and decreased $3 million from June 30, 2009.
Robert Sarver, Chairman and Chief Executive Officer of Western Alliance, remarked, "We continue to see the impact of the recession in our particularly hard hit markets on our performance. While non-performing assets continue to rise due to falling collateral values, we have increased our reserve build by $20 million, are consolidating bank branches where appropriate, and begun to execute strategic cost reduction programs. We are in process of merging four of our 41 offices into nearby facilities, as well as centralizing other operations. These efficiency improvements should be visible in the first quarter of 2010.
"These actions, coupled with the franchise value we are creating from our continued exceptional growth in deposits, which are up over $1 billion year to date, should better position the company for strong performance once economic conditions improve."
Income Statement
Net interest income decreased 1.8 percent to $49.0 million in the third quarter 2009 from $49.9 million in the third quarter 2008. The net interest margin in the third quarter 2009 was 3.69 percent compared to 4.17 percent in the second quarter 2009 and 4.36 percent in the third quarter 2008. The decrease in the interest margin was largely due to increases in our record liquidity position. The effect of our short term investments, primarily balances on deposit at the Federal Reserve, has reduced our margin by approximately 42 basis points.
The provision for loan losses was $50.8 million for the third quarter 2009 compared to $37.6 million for the second quarter 2009 and $14.7 million for the third quarter 2008. Nonaccrual loans and repossessed assets were $239.1 million or 4.10 percent of total assets at September 30, 2009, compared with $158.5 million or 2.78 percent of total assets at June 30, 2009 and $40.6 million or 0.78 percent of total assets at September 30, 2008. Net loan charge-offs in the third quarter 2009 were $30.7 million or 3.05 percent of average loans (annualized), compared to net charge-offs of $30.6 million or 3.00 percent of average loans (annualized) for the second quarter 2009 and $16.3 million or 1.65 percent of average loans (annualized) for the third quarter 2008. Loans past due 90 days and still accruing totaled $2.5 million at quarter end, down from $36.1 million at June 30, 2009 and up from $0.7 million at September 30, 2008. Loans past due 30-89 days totaled $44.0 million at quarter end, down from $75.5 million at June 30, 2009 and up from $35.0 million at September 30, 2008.
Non-interest income, excluding increases in fair value of financial instruments measured at fair value and net losses on the sale of repossessed assets, was $8.1 million for the third quarter 2009, up 9.8 percent from $7.4 million for the same period in 2008. For the second quarter 2009, non-interest income was $7.2 million.
Net revenue (sum of net interest income and non-interest income, excluding securities impairment charges, net mark-to-market gains and net gains/losses on the sale of repossessed assets) was $57.1 million for the third quarter 2009, down 0.3 percent from $57.3 million for the third quarter 2008. For the second quarter 2009, net revenue was $58.0 million.
Non-interest expense (excluding goodwill impairment charges) was $44.8 million for the third quarter 2009, up $4.2 from $40.6 million for the same period in 2008. For the second quarter 2009, non-interest expense was $48.6 million. The Company had 1,023 full-time equivalent employees at September 30, 2009, compared to 1,076 at June 30, 2009 and 1,017 one year ago.
The net loss increased $9.8 million to $23.9 million for the third quarter 2009 compared to a $14.1 million net loss for the second quarter 2009. Diluted loss per share was $0.37 compared with a $0.31 diluted loss per share for the second quarter 2009. Average diluted shares increased 34.7 percent to 71.7 million for the third quarter 2009 compared to 53.3 million for the second quarter primarily due to the common equity offering completed in May 2009.
Balance Sheet
Gross loans totaled $3.97 billion at September 30, 2009, a decrease of 1.5 percent from June 30, 2009 and an increase of 0.5 percent from $3.95 billion at September 30, 2008. At September 30, 2009 the allowance for loan losses was 2.62 percent of gross loans up from 2.09 percent at June 30, 2009 and 1.45 percent at September 30, 2008.
Customer funds totaled $5.00 billion at September 30, 2009, an increase of $344 million or 7.4 percent from June 30, 2009 and an increase of $1.25 billion or 33.4 percent from $3.74 billion at September 30, 2008.
Non-interest bearing deposits comprised 24.4 percent of total deposits at September 30, 2009. As of September 30, 2009, non-interest bearing deposits from title companies were 2.3 percent of total deposits, compared to 2.5 percent at June 30, 2009, and 4.0 percent at September 30, 2008.
At September 30, 2009 the Company's loans were 79.4 percent of customer funds, compared to 105.4 percent one year earlier and 86.6 percent at June 30, 2009. Wholesale borrowings, including non-relationship brokered deposits, totaled $201 million at September 30, 2009, down $771 million from $972 million one year earlier, and down $196 million from $397 million at June 30, 2009.
Stockholders' equity increased $125 million from September 30, 2008 and decreased $19 million from June 30, 2009 to $603 million at September 30, 2009. Our accumulated other comprehensive income increased to $6.0 million at September 30, 2009, compared to $0.9 million at June 30, 2009 due mainly to the recovery of market values of certain trust preferred securities. At September 30, 2009 tangible common equity was 7.3 percent of tangible assets and total risk-based capital was 14.7 percent of risk-weighted assets.
Total assets increased 11.5 percent to $5.83 billion at September 30, 2009 from $5.23 billion at September 30, 2008.
Operating Unit Highlights
Our Nevada banking operations, which are comprised of Bank of Nevada and First Independent Bank of Nevada, reported that loans declined $85 million during the third quarter and declined $145 million during the last 12 months to $2.49 billion at September 30, 2009. Customer funds increased $239 million and $565 million to $2.96 billion during the same periods, respectively. Net loss for our Nevada banks was $23.8 million during the third quarter 2009, compared with a net loss of $90.9 million during the third quarter 2008, including a $79.2 million goodwill impairment charge.
Our California banking operations, which are comprised of Torrey Pines Bank and Alta Alliance Bank, reported that loans declined $5 million during the third quarter 2009 and increased $56 million during the last 12 months to $768 million. Customer funds increased $44 million and $439 million to $1.12 billion during the same periods, respectively. Net income for our California banks was $0.3 million during the third quarter 2009 compared with a net loss of $2.9 million during the third quarter 2008.
Our Arizona banking operations, which consists of Alliance Bank of Arizona, reported loan growth of $19 million during the third quarter 2009 and an increase of $85 million during the last 12 months to $708 million. Customer funds increased $60 million and $232 million to $928 million during the same periods, respectively. Net loss for our Arizona banks was $1.1 million during the third quarter 2009 compared with a net loss of $1.7 million during the third quarter 2008.
Our Asset Management business line, which includes Miller/Russell and Associates, Shine Investments Advisory Services and Premier Trust, had assets under management of $1.68 billion at September 30, 2009, down 14.7 percent from $1.97 billion at September 30, 2008. Assets under administration by the three entities decreased 12.0 percent from $2.16 billion at September 30, 2008 to $1.90 billion at September 30, 2009. Net loss for the Asset Management segment for the quarter ended September 30, 2009 was $0.4 million, including a goodwill impairment charge at Miller/Russell and Associates of $0.6 million.
Our affinity credit card business line, PartnersFirst, has customer receivables of $47 million, an increase of $24 million since September 30, 2008. Pretax losses incurred by PartnersFirst for the quarter ended September 30, 2009 were $3.2 million.
Attached to this press release is summarized financial information for the quarter ended September 30, 2009.
Conference Call
Western Alliance Bancorporation will host a conference call to discuss its third quarter 2009 financial results at 10:30 a.m. ET on Monday, October 26, 2009. Participants may access the call by dialing 1-800-860-2442. The call will be recorded and made available for replay after 2:00 p.m. ET October 26 until 9 a.m. ET by dialing 1-877-344-7529 using the pass code 434903.
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. 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: factors listed in the Form 10-K 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 loan losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; 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.
We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements set forth in this press release to reflect new information, future events or otherwise.
About Western Alliance Bancorporation
Western Alliance Bancorporation is the parent company of Bank of Nevada, First Independent Bank of Nevada, Alliance Bank of Arizona, Torrey Pines Bank, Alta Alliance Bank, Miller/Russell & Associates, Shine Investment Advisory Services, Premier Trust, and PartnersFirst. These dynamic organizations provide a broad array of banking, leasing, trust, investment, and mortgage services to clients in Nevada, Arizona and California, investment services in Colorado, and bank card services nationwide. Staffed with experienced financial professionals, these organizations deliver a broader product array and larger credit capacity than community banks, yet are empowered to be more responsive to customers' needs than larger institutions. Additional investor information can be accessed on the Investor Relations page of the company's website, www.westernalliancebancorp.com.
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
At or for the Three Months For the Nine Months
Ended September 30, Ended September 30,
2009 2008 Change % 2009 2008 Change %
Selected Balance Sheet Data:
($ in millions)
Total assets $ 5,831.3 $ 5,229.0 11.5 %
Gross loans, including net deferred fees 3,968.0 3,947.2 0.5
Securities and money market investments 727.8 622.0 17.0
Federal funds sold and other 5.0 35.1 (85.8 )
Customer funds 4,996.3 3,744.4 33.4
Borrowings and brokered deposits 99.4 865.1 (88.5 )
Junior subordinated and subordinated debt 101.9 106.7 (4.5 )
Stockholders' equity 602.9 477.9 26.2
Selected Income Statement Data:
($ in thousands)
Interest income $ 67,746 $ 74,025 (8.5 ) % $ 208,210 $ 223,503 (6.8 ) %
Interest expense 18,776 24,163 (22.3 ) 57,709 78,777 (26.7 )
Net interest income 48,970 49,862 (1.8 ) 150,501 144,726 4.0
Provision for loan losses 50,750 14,716 244.9 108,307 35,927 201.5
Net interest income after provision for loan losses (1,780 ) 35,146 (105.1 ) 42,194 108,799 (61.2 )
Securities gains (losses) and other valuation changes 5,019 (27,350 ) (118.4 ) (20,694 ) (30,338 ) (31.8 )
Net gain (loss) on sale of repossessed assets and bank premises (7,283 ) (32 ) 22,659.4 (16,193 ) 321 (5,144.5 )
Other noninterest income 8,142 7,412 9.8 22,167 22,429 (1.2 )
Noninterest expense 45,428 119,924 (62.1 ) 182,540 197,119 (7.4 )
Income (loss) before income taxes (41,330 ) (104,748 ) (60.5 ) (155,066 ) (95,908 ) 61.7
Income tax expense (benefit) (17,415 ) (10,040 ) 73.5 (30,572 ) (7,757 ) 294.1
Net income (loss) $ (23,915 ) $ (94,708 ) (74.7 ) $ (124,494 ) $ (88,151 ) 41.2
Intangible asset amortization expense, net of tax $ 614 $ 598 2.7 $ 1,843 $ 1,706 8.0
Diluted net income (loss) per common share $ (0.37 ) $ (2.84 ) (87.0 ) $ (2.42 ) $ (2.86 ) (15.4 )
Common Share Data:
Diluted net income (loss) per common share $ (0.37 ) $ (2.84 ) (87.0 ) % $ (2.42 ) $ (2.86 ) (15.4 ) %
Book value per common share 6.56 12.41 (47.1 )
Tangible book value per share (net of tax) 5.94 8.44 (29.6 )
Average shares outstanding (in thousands):
Basic 71,697 33,299 115.3 54,471 30,867 76.5
Diluted 71,697 33,299 115.3 54,471 30,867 76.5
Common shares outstanding 72,489 38,499 88.3
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data (continued)
Unaudited
At or for the Three Months For the Nine Months
Ended Sept. 30, Ended Sept. 30,
2009 2008 Change % 2009 2008 Change %
Selected Performance Ratios:
Return on average assets (1) (1.63 ) % (7.23 ) % (77.5 ) % (3.03 ) % (2.27 ) % 33.5 %
Cash return on average tangible assets (1)(2) (1.60 ) (7.43 ) (78.5 ) (3.02 ) (2.31 ) 30.7
Return on average stockholders' equity (1) (14.78 ) (71.63 ) (79.4 ) (30.16 ) (23.06 ) 30.8
Cash return on average tangible stockholders' equity (1)(2) (15.83 ) (104.79 ) (84.9 ) (33.23 ) (33.79 ) (1.7 )
Net interest margin (1) 3.69 4.36 (15.4 ) 4.07 4.27 (4.7 )
Net interest spread 3.26 3.87 (15.8 ) 3.63 3.71 (2.2 )
Efficiency ratio - tax equivalent basis 78.34 70.45 11.2 78.94 69.95 12.9
Loan to deposit ratio 83.50 112.49 (25.8 )
Capital Ratios:
Tangible equity 9.5 % 6.3 % 50.8 %
Tangible common equity 7.3 6.3 15.9
Tier 1 Leverage ratio 9.6 8.3 15.7
Tier 1 Risk Based Capital 12.1 8.9 36.0
Total Risk Based Capital 14.7 11.4 28.9
Asset Quality Ratios:
Net charge-offs to average loans outstanding (1) 3.05 % 1.65 % 84.8 % 2.60 % 0.98 % 165.3 %
Nonaccrual loans to gross loans 4.19 0.71 490.1
Nonaccrual loans and repossessed assets to total assets 4.10 0.78 425.6
Loans past due 90 days and still accruing to total loans 0.06 0.02 200.0
Allowance for loan losses to gross loans 2.62 1.45 80.7
Allowance for loan losses to nonaccrual loans 62.65 204.58 (69.4 )
===================================================
(1) Annualized for the three and nine-month periods ended September
30, 2009 and 2008.
(2) Cash return is defined as net income before intangible asset
amortization expense.
Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited Three Months Ended Nine Months Ended
September 30, September 30,
($ in thousands, except per share data) 2009 2008 2009 2008
Interest income on:
Loans, including fees $ 61,046 $ 64,977 $ 187,567 $ 193,498
Securities 6,225 8,968 19,939 29,730
Federal funds sold and other 475 80 704 275
Total interest income 67,746 74,025 208,210 223,503
Interest expense on:
Deposits 15,678 16,844 46,817 53,566
Borrowings 1,841 5,677 7,174 19,841
Junior subordinated and subordinated debt 1,257 1,642 3,718 5,370
Total interest expense 18,776 24,163 57,709 78,777
Net interest income 48,970 49,862 150,501 144,726
Provision for loan losses 50,750 14,716 108,307 35,927
Net interest income after provision for loan losses (1,780 ) 35,146 42,194 108,799
Mark-to-market gains (losses), net 6,063 5,338 21,342 7,630
Securities impairment charges (1,044 ) (32,688 ) (42,036 ) (37,968 )
Net loss on repossessed assets and bank premises (7,283 ) (32 ) (16,193 ) 321
Other income:
Trust and investment advisory services 2,369 2,668 6,967 8,199
Service charges 2,212 1,586 5,874 4,424
Bank owned life insurance 574 593 1,523 1,966
Other 2,987 2,565 7,803 7,840
8,142 7,412 22,167 22,429
Other expense:
Compensation 24,488 21,812 73,839 65,263
Occupancy 5,428 5,280 15,953 15,487
Customer service 2,827 910 8,777 3,223
Intangible amortization 945 920 2,835 2,624
Goodwill impairment 576 79,242 45,576 79,242
Other 11,164 11,760 35,560 31,280
45,428 119,924 182,540 197,119
Income (loss) before income taxes (41,330 ) (104,748 ) (155,066 ) (95,908 )
Income tax expense (benefit) (17,415 ) (10,040 ) (30,572 ) (7,757 )
Net income (loss) $ (23,915 ) $ (94,708 ) $ (124,494 ) $ (88,151 )
Preferred stock dividends $ 1,750 - 5,250 -
Accretion on preferred stock discount 689 - 2,045 -
Net income (loss) available to common stockholders $ (26,354 ) $ (94,708 ) $ (131,789 ) $ (88,151 )
Diluted earnings (loss) per share $ (0.37 ) $ (2.84 ) $ (2.42 ) $ (2.86 )
Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Statements of Operations
Unaudited
Quarter Ended
($ in thousands, except per share data) Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
Interest income on:
Loans, including fees $ 61,046 $ 63,268 $ 63,253 $ 64,030 $ 64,977
Securities 6,225 6,822 6,892 8,011 8,968
Federal funds sold and other 475 206 23 47 80
Total interest income 67,746 70,296 70,168 72,088 74,025
Interest expense on:
Deposits 15,678 16,026 15,113 15,185 16,183
Borrowings 1,841 2,271 3,062 4,834 6,338
Junior subordinated and subordinated debt 1,257 1,198 1,263 1,887 1,642
Total interest expense 18,776 19,495 19,438 21,906 24,163
Net interest income 48,970 50,801 50,730 50,182 49,862
Provision for loan losses 50,750 37,573 19,984 32,262 14,716
Net interest income after provision for loan losses (1,780 ) 13,228 30,746 17,920 35,146
Mark-to-market gains (losses), net 6,063 11,264 4,015 3,314 5,251
Securities impairment charges (1,044 ) (2,587 ) (38,405 ) (118,864 ) (32,688 )
Net loss on repossessed assets and bank premises (7,283 ) (3,974 ) (4,936 ) (1,000 ) (32 )
Other income:
Trust and other fees 2,369 2,361 2,237 2,290 2,668
Service charges 2,212 1,980 1,682 1,711 1,586
Bank owned life insurance 574 435 514 673 593
Other 2,987 2,392 2,424 2,469 2,601
8,142 7,168 6,857 7,143 7,448
Other expense:
Compensation 24,488 24,527 24,824 23,086 21,812
Occupancy 5,428 5,254 5,271 5,404 5,280
Customer service 2,827 3,465 2,485 934 910
Intangible amortization 945 945 945 1,007 920
Goodwill impairment 576 - 45,000 59,603 79,242
Other 11,164 14,425 9,971 13,197 11,709
45,428 48,616 88,496 103,231 119,873
Income (loss) before income taxes (41,330 ) (23,517 ) (90,219 ) (194,718 ) (104,748 )
Income tax expense (benefit) (17,415 ) (9,380 ) (3,777 ) (46,409 ) (10,040 )
Net income (loss) $ (23,915 ) $ (14,137 ) $ (86,442 ) $ (148,309 ) $ (94,708 )
Preferred stock dividends 1,750 1,750 1,750 778 -
Accretion on preferred stock discount 689 674 682 303 -
Net income (loss) available to common stockholders $ (26,354 ) $ (16,561 ) $ (88,874 ) $ (149,390 ) $ (94,708 )
Diluted earnings (loss) per share $ (0.37 ) $ (0.31 ) $ (2.33 ) $ (3.94 ) $ (2.84 )
Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Balance Sheets
Unaudited
Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30,
($ in millions) 2009 2009 2009 2008 2008
Assets
Cash and due from banks $ 752.9 $ 548.6 $ 224.3 $ 136.8 $ 137.8
Federal funds sold and other 5.0 20.3 3.3 3.2 35.1
Cash and cash equivalents 757.9 568.9 227.6 140.0 172.9
Securities and money market investments 727.8 725.7 583.6 565.4 622.0
Gross loans, including net deferred loan fees:
Construction and land development 685.2 727.4 793.5 820.9 804.9
Commercial real estate 1,925.7 1,866.0 1,827.3 1,763.4 1,673.9
Residential real estate 600.4 595.0 586.5 589.2 571.9
Commercial 687.7 768.9 806.8 860.3 842.8
Consumer 77.3 80.5 71.2 71.1 62.0
Net deferred fees (8.3 ) (8.9 ) (9.5 ) (9.2 ) (8.3 )
3,968.0 4,028.9 4,075.8 4,095.7 3,947.2
Less: Allowance for loan losses (104.2 ) (84.1 ) (77.2 ) (74.8 ) (57.1 )
Loans, net 3,863.8 3,944.8 3,998.6 4,020.9 3,890.1
Premises and equipment, net 128.6 136.7 138.1 140.9 142.9
Bank owned life insurance 91.8 91.3 90.8 90.7 90.0
Goodwill and other intangibles 51.6 53.1 54.1 100.0 160.6
Other assets 209.8 181.0 174.5 184.9 150.5
Total assets $ 5,831.3 $ 5,701.5 $ 5,267.3 $ 5,242.8 $ 5,229.0
Liabilities and Stockholders' Equity
Liabilities
Noninterest bearing demand deposits $ 1,154.8 $ 1,108.6 $ 1,039.2 $ 1,010.6 $ 985.0
Interest bearing deposits:
Demand 339.4 296.3 260.6 253.5 237.4
Savings and money market 1,802.5 1,704.2 1,579.0 1,342.8 1,377.8
Time, $100 and over 875.0 714.7 642.0 647.4 590.4
Other time 560.5 528.4 500.7 338.1 258.4
4,732.2 4,352.2 4,021.5 3,592.4 3,449.0
Customer repurchase agreements 264.1 300.4 272.3 321.0 295.4
Total customer funds 4,996.3 4,652.6 4,293.8 3,913.4 3,744.4
Wholesale brokered deposits 20.0 40.0 40.0 60.0 60.0
Borrowings 79.4 254.4 370.8 637.1 805.1
Junior subordinated and subordinated debt 101.9 102.3 102.8 103.0 106.7
Accrued interest payable and other liabilities 30.8 30.6 32.9 33.8 34.9
Total liabilities 5,228.4 5,079.9 4,840.3 4,747.3 4,751.1
Stockholders' Equity
Common stock and additional paid-in capital 681.9 680.1 486.2 484.2 466.0
Preferred Stock 127.2 126.6 125.9 125.2 -
Retained earnings (deficit) (212.2 ) (186.0 ) (169.4 ) (85.4 ) 64.0
Accumulated other comprehensive loss 6.0 0.9 (15.7 ) (28.5 ) (52.1 )
Total stockholders' equity 602.9 621.6 427.0 495.5 477.9
Total liabilities and stockholders' equity $ 5,831.3 $ 5,701.5 $ 5,267.3 $ 5,242.8 $ 5,229.0
Western Alliance Bancorporation and Subsidiaries
Changes in the Allowance For Loan Losses
Unaudited
Quarter Ended
Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30,
($ in thousands) 2009 2009 2009 2008 2008
Balance, beginning of period $ 84,143 $ 77,184 $ 74,827 $ 57,097 $ 58,688
Provisions charged to operating expenses 50,750 37,573 19,984 32,262 14,716
Recoveries of loans previously charged-off:
Construction and land development 608 212 - 28 4
Commercial real estate 139 - - 3 -
Residential real estate 11 143 51 12 31
Commercial and industrial 442 501 370 131 115
Consumer 6 42 29 13 12
Total recoveries 1,206 898 450 187 162
Loans charged-off:
Construction and land development 13,717 10,381 1,850 2,197 10,113
Commercial real estate 3,125 6,310 1,117 1,364 1,366
Residential real estate 5,619 6,427 6,127 3,387 758
Commercial and industrial 8,329 7,355 7,965 6,975 4,173
Consumer 1,128 1,039 1,018 796 59
Total charged-off 31,918 31,512 18,077 14,719 16,469
Net charge-offs 30,712 30,614 17,627 14,532 16,307
Balance, end of period $ 104,181 $ 84,143 $ 77,184 $ 74,827 $ 57,097
Net charge-offs (annualized) to average loans outstanding 3.05 % 3.00 % 1.72 % 1.45 % 1.66 %
Allowance for loan losses to gross loans 2.62 2.09 1.89 1.83 1.45
Nonaccrual loans $ 166,286 $ 116,377 $ 98,653 $ 58,302 $ 27,909
Repossessed assets 72,807 42,137 15,455 14,545 12,681
Loans past due 90 days, still accruing 2,538 36,060 53,239 11,515 686
Loans past due 30 to 89 days, still accruing 43,980 75,480 53,123 45,193 34,990
Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
Three Months Ended September 30,
2009 2008
Average Interest Average Average Interest Average
Balance Yield/ Balance Yield/
Cost Cost
Earning Assets ($ in millions) ($ in thousands) ($ in millions) ($ in thousands)
Securities (1) $ 600.8 $ 5,781 3.91 % $ 611.5 $ 8,355 5.74 %
Federal funds sold & other 35.6 475 5.29 % 15.8 80 2.01 %
Loans (1) 4,027.0 61,046 6.01 % 3,926.0 64,977 6.58 %
Short term investments 570.3 334 0.23 % - - 0.00 %
Restricted stock 41.1 110 1.06 % 40.9 613 5.96 %
Total earnings assets 5,274.8 67,746 5.11 % 4,594.2 74,025 6.45 %
Non-earning Assets
Cash and due from banks 220.0 118.2
Allowance for loan losses (89.5 ) (60.4 )
Bank owned life insurance 91.4 89.6
Other assets 336.9 467.9
Total assets $ 5,833.6 $ 5,209.5
Interest-bearing liabilities
Sources of Funds
Interest-bearing deposits:
Interest-bearing checking $ 326.9 $ 928 1.13 % $ 252.9 $ 969 1.52 %
Savings and money market 1,777.4 6,700 1.50 % 1,538.7 8,666 2.24 %
Time deposits 1,343.5 8,050 2.38 % 792.9 6,548 3.29 %
3,447.8 15,678 1.80 % 2,584.5 16,183 2.49 %
Borrowings 467.8 1,841 1.56 % 1,020.5 6,338 2.47 %
Junior subordinated and subordinated debt 102.3 1,257 4.87 % 114.2 1,642 5.72 %
Total interest-bearing liabilities 4,017.9 18,776 1.85 % 3,719.2 24,163 2.58 %
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 1,141.3 943.3
Other liabilities 32.4 21.0
Stockholders' equity 642.0 526.0
Total liabilities and stockholders' equity $ 5,833.6 $ 5,209.5
Net interest income and margin $ 48,970 3.69 % $ 49,862 4.36 %
Net interest spread 3.26 % 3.87 %
(1) Yields on loans and securities have been adjusted to a tax
equivalent basis. The taxable-equivalent adjustment was $141 and
$470 for the third quarter ended 2009 and 2008, respectively.
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results Inter-
Unaudited segment Consoli-
Asset Credit Card Elimi- dated
($ in millions) Nevada California Arizona Management Services Other nations Company
At Sept. 30, 2009:
Assets $ 3,457.1 $ 1,217.5 $ 1,024.9 $ 19.3 $ 47.4 $ 118.6 $ (53.5 ) $ 5,831.3
Gross loans and deferred fees 2,488.8 767.9 707.6 - 46.7 - (43.0 ) 3,968.0
Less: Allowance for loan losses (74.9 ) (9.4 ) (16.6 ) - (3.3 ) - - (104.2 )
Net loans 2,413.9 758.5 691.0 - 43.4 - (43.0 ) 3,863.8
Customer deposits 2,772.9 1,089.5 877.4 - - - (7.6 ) 4,732.2
Stockholders' equity 315.7 125.8 73.6 17.1 (5.2 ) 81.4 (5.5 ) 602.9
No. of branches 21 9 11 - - - - 41
No. of FTE 583 182 145 43 29 41 - 1,023
(in thousands)
Three Months Ended Sept. 30, 2009:
Net interest income $ 29,918 $ 10,266 $ 8,160 $ 12 $ 629 $ (15 ) $ - $ 48,970
Provision for loan losses 41,931 2,028 4,866 - 1,925 - - 50,750
Net interest income after provision for loan losses (12,013 ) 8,238 3,294 12 (1,296 ) (15 ) - (1,780 )
Securities gains (losses) and other valuation changes 744 176 66 75 - 1,818 2,140 5,019
Net gain (loss) on sale of repossessed assets (6,658 ) - (625 ) - - - - (7,283 )
Noninterest income, excluding securities and fair value gains 3,457 897 1,610 2,377 614 388 (1,201 ) 8,142
(losses)
Noninterest expense (23,132 ) (8,951 ) (6,319 ) (2,640 ) (2,515 ) (3,072 ) 1,201 (45,428 )
Income (loss) before income taxes (37,602 ) 360 (1,974 ) (176 ) (3,197 ) (881 ) 2,140 (41,330 )
Income tax expense (benefit) (13,784 ) 26 (849 ) 217 (1,340 ) (287 ) (1,398 ) (17,415 )
Net income (loss) $ (23,818 ) $ 334 $ (1,125 ) $ (393 ) $ (1,857 ) $ (594 ) $ 3,538 $ (23,915 )
($ in thousands)
Nine Months Ended Sept. 30, 2009:
Net interest income $ 94,186 $ 31,781 $ 24,525 $ 43 $ 1,459 $ (1,493 ) $ - $ 150,501
Provision for loan losses 86,580 4,818 13,081 - 3,828 - - 108,307
Net interest income after provision for loan losses 7,606 26,963 11,444 43 (2,369 ) (1,493 ) - 42,194
Securities gains (losses) and other valuation changes (5,498 ) 916 270 75 - 825 (17,282 ) (20,694 )
Net gain (loss) on sale of repossessed assets (11,748 ) - (4,445 ) - - - - (16,193 )
Noninterest income, excluding securities and fair value gains 9,362 2,552 4,156 6,991 1,307 1,098 (3,299 ) 22,167
(losses)
Noninterest expense (115,812 ) (29,661 ) (20,669 ) (6,953 ) (7,829 ) (6,918 ) 5,302 (182,540 )
Income (loss) before income taxes (116,090 ) 770 (9,244 ) 156 (8,891 ) (6,488 ) (15,279 ) (155,066 )
Income tax expense (benefit) (25,165 ) 662 (3,577 ) 459 (3,726 ) (2,426 ) 3,201 (30,572 )
Net income (loss) $ (90,925 ) $ 108 $ (5,667 ) $ (303 ) $ (5,165 ) $ (4,062 ) $ (18,480 ) $ (124,494 )
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results Inter-
Unaudited segment Consoli-
Asset Credit Card Elimi- dated
($ in millions) Nevada California Arizona Management Services Other nations Company
At Sept. 30, 2008:
Assets $ 3,596.2 $ 917.4 $ 853.4 $ 18.8 $ 24.2 $ 24.8 $ (205.8 ) $ 5,229.0
Gross loans and deferred fees 2,633.6 711.6 622.2 - 22.8 - (43.0 ) 3,947.2
Less: Allowance for loan losses (40.5 ) (7.7 ) (8.2 ) - (0.7 ) - - (57.1 )
Net loans 2,593.1 703.9 614.0 - 22.1 - (43.0 ) 3,890.1
Customer deposits 2,151.0 666.2 654.6 - - - (22.8 ) 3,449.0
Stockholders' equity 355.0 73.0 58.7 17.1 - (25.9 ) - 477.9
No. of branches 21 9 11 - - - - 41
No. of FTE 597 154 144 46 38 38 - 1,017
($ in thousands)
Three Months Ended Sept. 30, 2008:
Net interest income $ 33,069 $ 10,048 $ 7,597 $ 15 $ 139 $ (1,006 ) $ - $ 49,862
Provision for loan losses 11,024 1,427 2,036 - 229 - - 14,716
Net interest income after provision for loan losses 22,045 8,621 5,561 15 (90 ) (1,006 ) - 35,146
Securities gains (losses) and other valuation changes (23,833 ) (7,402 ) (3,757 ) - - 7,642 - (27,350 )
Net gain (loss) on sale of repossessed assets (32 ) - - - - - - (32 )
Noninterest income, excluding securities and fair value gains 2,883 542 1,510 2,726 295 309 (853 ) 7,412
(losses)
Noninterest expense (98,731 ) (6,707 ) (6,154 ) (2,251 ) (4,448 ) (2,486 ) 853 (119,924 )
Income (loss) before income taxes (97,668 ) (4,946 ) (2,840 ) 490 (4,243 ) 4,459 - (104,748 )
Income tax expense (benefit) (6,769 ) (2,090 ) (1,149 ) 223 (1,772 ) 1,517 - (10,040 )
Net income (loss) $ (90,899 ) $ (2,856 ) $ (1,691 ) $ 267 $ (2,471 ) $ 2,942 $ - $ (94,708 )
($ in thousands)
Nine Months Ended Sept. 30, 2008:
Net interest income $ 98,106 $ 27,855 $ 22,238 $ 60 $ 73 $ (3,606 ) $ - $ 144,726
Provision for loan losses 28,271 3,444 3,521 - 691 - - 35,927
Net interest income after provision for loan losses 69,835 24,411 18,717 60 (618 ) (3,606 ) - 108,799
Securities gains (losses) and other valuation changes (33,778 ) (7,785 ) (4,332 ) - - 15,557 - (30,338 )
Net loss on repossessed assets, bank premises (59 ) - 380 - - - - 321
Noninterest income, excluding securities and fair value gains 9,099 1,557 4,511 8,252 597 673 (2,260 ) 22,429
(losses)
Noninterest expense (137,581 ) (19,502 ) (18,787 ) (7,223 ) (9,357 ) (6,929 ) 2,260 (197,119 )
Income (loss) before income taxes (92,484 ) (1,319 ) 489 1,089 (9,378 ) 5,695 - (95,908 )
Income tax expense (benefit) (5,796 ) (576 ) 64 517 (3,905 ) 1,939 - (7,757 )
Net income (loss) $ (86,688 ) $ (743 ) $ 425 $ 572 $ (5,473 ) $ 3,756 $ - $ (88,151 )
SOURCE: Western Alliance Bancorporation
Western Alliance Bancorporation MEDIA CONTACT: Robert Sarver, Chairman/CEO 602-952-5445 or INVESTOR CONTACT: Dale Gibbons, CFO 702-252-6236
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