Western Alliance Bancorporation (NYSE:WAL):
SECOND QUARTER 2022 FINANCIAL RESULTS
Second Quarter Highlights:
Net income
Earnings per share
PPNR1
Net interest margin
Efficiency
ratio1
Book value per
common share
$260.2 million
$2.39
$351.1 million
3.54%
42.8%
$43.07
$36.671, excluding
goodwill and intangibles
CEO COMMENTARY:
“Western Alliance's solid performance in
the second quarter of 2022 produced record revenues, PPNR and
earnings for the quarter,” said Kenneth Vecchione, President and
Chief Executive Officer. “Our capital driven business model
delivered strong quarterly results, achieving $260.2 million in net
income and earnings per share of $2.39, an increase of 10.1% over
prior year. Quarterly loan and deposit increases of $7.2 billion
and $1.6 billion, respectively, lifted total assets to $66 billion.
Quarterly net interest margin of 3.54% increased 22 basis points
from prior quarter, driving net interest income higher by 16.8% to
$525.0 million. Asset quality remained strong with nonperforming
assets to total assets of 0.15%."
Acquisition of Digital Disbursements and
AmeriHome Mortgage Company:
On January 25, 2022, the Company completed
its acquisition of Digital Settlement Technologies LLC, doing
business as Digital Disbursements, a digital payments platform for
the class action legal industry. On April 7, 2021, the Company
completed its acquisition of Aris Mortgage Holding Company, LLC,
the parent company of AmeriHome Mortgage Company, LLC
("AmeriHome"). The Company's results include the financial results
of Digital Disbursements and AmeriHome beginning on the acquisition
dates noted.
LINKED-QUARTER BASIS
YEAR-OVER-YEAR
FINANCIAL HIGHLIGHTS:
- Net income of $260.2 million and earnings per share of $2.39,
compared to $240.1 million and $2.22, respectively
- Net income of $260.2 million and earnings per share of $2.39,
up 16.3% and 10.1%, from $223.8 million and $2.17,
respectively
- Net revenue of $620.0 million, an increase of 11.6%, or $64.2
million, compared to an increase in non-interest expenses of 8.2%,
or $20.3 million
- Net revenue of $620.0 million, an increase of 22.4%, or $113.5
million, compared to an increase in non-interest expenses of 9.8%,
or $24.1 million
- Pre-provision net revenue1 of $351.1 million, up $43.9 million
from $307.2 million
- Pre-provision net revenue1 of $351.1 million, up $89.4 million
from $261.7 million
- Effective tax rate of 19.6%, compared to 19.5%
- Effective tax rate of 19.6%, compared to 19.0%
FINANCIAL POSITION RESULTS:
- HFI loans of $48.4 billion, up $5.3 billion, net of a $1.9
billion HFS to HFI loan transfer, or 52.2% annualized
- Increase in HFI loans of $16.4 billion, net of a $1.9 billion
HFS to HFI loan transfer, or 48.9%
- Total deposits of $53.7 billion, up $1.6 billion, or 11.9%
annualized
- Increase in total deposits of $11.8 billion, or 28.1%
- Stockholders' equity of $5.0 billion, down $53 million
- Increase in stockholders' equity of $924.5 million
LOANS AND ASSET QUALITY:
- Nonperforming assets (nonaccrual loans and repossessed assets)
to total assets of 0.15%, compared to 0.17%
- Nonperforming assets to total assets of 0.15%, compared to
0.20%
- Annualized net loan charge-offs to average loans outstanding of
0.01%, compared to approximately 0.00%
- Annualized net loan charge-offs to average loans outstanding of
0.01%, compared to approximately 0.00%
KEY PERFORMANCE METRICS:
- Net interest margin of 3.54%, compared to 3.32%
- Net interest margin of 3.54%, compared to 3.51%
- Return on average assets and on tangible common equity1 of
1.62% and 25.6%, compared to 1.64% and 23.9%, respectively
- Return on average assets and on tangible common equity1 of
1.62% and 25.6%, compared to 1.86% and 28.1%, respectively
- Tangible common equity ratio1 of 6.1%, compared to 6.7%
- Tangible common equity ratio1 of 6.1%, compared to 7.1%
- Tangible book value per share1, net of tax, of $36.67, a
decrease of 1.2% from $37.13
- Tangible book value per share1, net of tax, of $36.67, an
increase of 11.6% from $32.86
- Efficiency ratio1 of 42.8%, compared to 44.1%
- Efficiency ratio1 of 42.8%, compared to 47.5%
1 See reconciliation of Non-GAAP Financial
Measures.
Income Statement
Net interest income was $525.0 million in the second quarter
2022, an increase of $75.5 million from $449.5 million in the first
quarter 2022, and an increase of $154.5 million, or 41.7%, compared
to the second quarter 2021. The increase in net interest income
from the first quarter 2022 is due to strong HFI loan growth and a
higher rate environment, which drove an increase in yields on
interest earning assets and also pushed interest rates higher on
deposits and short-term borrowings. HFI loan growth, partially
offset by higher interest rates on deposits, drove the increase in
net interest income from the second quarter 2021.
The Company recorded a provision for credit losses totaling
$27.5 million in the second quarter 2022, an increase of $18.5
million from $9.0 million in the first quarter 2022, compared to a
provision release of $14.5 million in the second quarter 2021. The
provision for credit losses during the second quarter 2022 is
primarily due to loan growth and emerging economic uncertainty.
The Company’s net interest margin in the second quarter 2022 was
3.54%, an increase from 3.32% in the first quarter 2022, and an
increase from 3.51% in the second quarter 2021. The higher rate
environment drove an increase in net interest margin, with yields
on interest earning assets more than offsetting the increase in
rates on deposits and short-term borrowings. The increase in net
interest margin from the second quarter 2021 was driven by HFI loan
growth, partially offset by higher debt and deposit balances
coupled with higher rates on deposits.
Non-interest income was $95.0 million for the second quarter
2022, compared to $106.3 million for the first quarter 2022, and
$136.0 million for the second quarter 2021. The $11.3 million
decrease in non-interest income from the first quarter 2022 was
primarily the result of a decrease in net gain on loan origination
and sale activities of $9.7 million from decreased gain on sale
margins and a small loss on sale of securities in the current
quarter of $0.2 million compared to a gain of $6.9 million in the
first quarter 2022, which was partially offset by an increase in
gain on recovery from credit guarantees of $6.7 million and an
increase in loan servicing revenue of $4.3 million. The $41.0
million decrease from the second quarter 2021 was driven by a
decrease in net gain on loan origination and sale activities of
$104.8 million from lower production volume and gain on sale
margins and a $10.0 million loss on fair value adjustments on
assets measured at fair value compared to a gain of $3.2 million in
the second quarter 2021, partially offset by a $66.2 million
increase in loan servicing revenue and a $9.0 million gain on
recovery from credit guarantees, which arose from the credit risk
transfer transactions undertaken by the Company that transfer first
loss exposure to unrelated third parties.
Net revenue was $620.0 million for the second quarter 2022, an
increase of $64.2 million, or 11.6%, compared to $555.8 million for
the first quarter 2022, and an increase of $113.5 million, or
22.4%, compared to $506.5 million for the second quarter 2021.
Non-interest expense was $268.9 million for the second quarter
2022, compared to $248.6 million for the first quarter 2022, and
$244.8 million for the second quarter 2021. The Company’s
efficiency ratio1 was 42.8% for the second quarter 2022, compared
to 44.1% in the first quarter 2022, and 47.5% for the second
quarter 2021. Non-interest expense increased from the first quarter
2022 due to increased deposit costs and loan servicing expenses.
The increase in non-interest expense from the second quarter 2021
is attributable to increased legal, professional, and director's
fees, deposit and compensation costs, partially offset by lower
acquisition and restructuring costs and loan servicing
expenses.
Income tax expense was $63.4 million for the second quarter
2022, compared to $58.1 million for the first quarter 2022, and
$52.4 million for the second quarter 2021.
Net income was $260.2 million for the second quarter 2022, an
increase of $20.1 million from $240.1 million for the first quarter
2022, and an increase of $36.4 million from $223.8 million for the
second quarter 2021. Earnings per share was $2.39 for the second
quarter 2022, compared to $2.22 for the first quarter 2022, and
$2.17 for the second quarter 2021.
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 second
quarter 2022, the Company’s PPNR1 was $351.1 million, up $43.9
million from $307.2 million in the first quarter 2022, and up $89.4
million from $261.7 million in the second quarter 2021.
The Company had 3,254 full-time equivalent employees and 60
offices at June 30, 2022, compared to 3,170 employees and 60
offices at March 31, 2022, and 3,075 employees and 53 offices at
June 30, 2021.
1 See reconciliation of Non-GAAP Financial Measures.
Balance Sheet
HFI loans, net of deferred fees totaled $48.4 billion at June
30, 2022, compared to $41.1 billion at March 31, 2022, and $30.0
billion at June 30, 2021. HFI loan growth of $5.3 billion from the
prior quarter excludes a $1.9 billion transfer of government
guaranteed early buyout ("EBO") residential loans from HFS to HFI
and was driven by increases of $2.9 billion in commercial and
industrial, $1.5 billion in residential real estate, and $926
million in CRE non-owner occupied loans. From June 30, 2021, HFI
loan growth of $16.4 billion (which excludes $1.9 billion of
transferred EBO loans), was primarily driven by residential real
estate, commercial and industrial, and CRE non-owner occupied loans
which increased $7.7 billion, $6.5 billion, and $2.1 billion,
respectively.
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 June 30, 2022, the allowance for loan losses
to funded HFI loans ratio was 0.56%, compared to 0.63% at March 31,
2022, and 0.78% at June 30, 2021. The allowance for credit losses,
which includes the allowance for unfunded loan commitments, to
funded HFI loans ratio was 0.68% at June 30, 2022, compared to
0.73% at March 31, 2022, and 0.88% at June 30, 2021. The decrease
in the allowance for credit loss ratios from the prior quarter and
the prior year is due to loan mix changes resulting from growth in
low loss segments. The Company is a party to credit linked note
transactions, which effectively transfers a portion of the risk of
loan losses on reference pools of loans to the purchasers of the
notes. As of June 30, 2022 and March 31, 2022, the Company is
protected from credit losses on reference pools of loans totaling
$11.1 billion and $5.4 billion, 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 as of June 30, 2022 and March 31, 2022 include
an allowance of $19 million and $10 million, respectively, related
to these pools of loans. The allowance for credit losses to funded
HFI loans ratio, adjusted to take into consideration the transfer
of risk associated with the credit linked note transactions, was
0.88% at June 30, 2022 and 0.84% at March 31, 2022.
Deposits totaled $53.7 billion at June 30, 2022, an increase of
$1.6 billion from $52.2 billion at March 31, 2022, and an increase
of $11.8 billion from $41.9 billion at June 30, 2021. By deposit
type, the increase from the prior quarter is attributable to an
increase of $760 million from certificates of deposits, $473
million from savings and money market accounts, $201 million from
non-interest bearing demand deposits, and $119 million from
interest bearing demand deposits. From June 30, 2021, deposits
increased across all deposit types, with increases in
interest-bearing demand deposits of $4.2 billion, non-interest
bearing demand deposits of $3.6 billion, savings and money market
accounts of $3.2 billion, and certificates of deposit of $761
million. Non-interest bearing deposits were $23.7 billion at June
30, 2022, compared to $23.5 billion at March 31, 2022, and $20.1
billion at June 30, 2021.
The table below shows the Company's deposit types as a
percentage of total deposits:
Jun 30, 2022
Mar 31, 2022
Jun 30, 2021
Non-interest bearing
44.2
%
45.1
%
48.0
%
Savings and money market
35.4
35.6
37.7
Interest-bearing demand
15.6
15.8
10.0
Certificates of deposit
4.8
3.5
4.3
The Company’s ratio of HFI loans to deposits was 90.0% at June
30, 2022, compared to 78.8% at March 31, 2022, and 71.6% at June
30, 2021.
Borrowings were $5.2 billion at June 30, 2022, $833 million at
March 31, 2022, and $615 million at June 30, 2021. The increase in
borrowings from March 31, 2022 is due primarily to an increase in
short-term borrowings of $3.9 billion and the issuance of credit
linked notes totaling $486 million, net of $8 million in issuance
costs, during the quarter. The increase in borrowings from June 30,
2021 is due to the increases described above and the issuance of
$225 million in credit linked notes, net of issuance costs, during
the second half of 2021.
Qualifying debt totaled $891 million at June 30, 2022, compared
to $893 million at March 31, 2022, and $1.1 billion at June 30,
2021. The decrease in qualifying debt from June 30, 2021 is
primarily related to $250 million in subordinated debt redemptions
during 2021.
Stockholders’ equity was $5.0 billion at June 30, 2022, compared
to $5.0 billion at March 31, 2022, and $4.0 billion at June 30,
2021. Stockholders' equity remained consistent quarter over quarter
as net income was offset by dividends to shareholders and
unrealized fair value losses of approximately $285 million on the
Company's available for sale securities, which are recorded in
other comprehensive income, net of tax. A cash dividend of $0.35
per share was paid to common shareholders on May 27, 2022, totaling
$37.9 million, and a cash dividend of $0.27 per depository share
was paid to preferred shareholders on June 30, 2022, totaling $3.2
million. The increase in stockholders' equity from June 30, 2021 is
primarily a function of net income, issuance of preferred stock,
and sales of common stock under the Company's ATM program,
partially offset by dividends to shareholders and losses on
available for sale securities.
At June 30, 2022, tangible common equity, net of tax1, was 6.1%
of tangible assets1 and total capital was 11.9% of risk-weighted
assets. The Company’s tangible book value per share1 was $36.67 at
June 30, 2022, a decrease of 1.2% from $37.13, and up 11.6% from
$32.86 at June 30, 2021. The decrease in tangible book value per
share from March 31, 2022 is attributable to fair value marks on
the Company's available for sale securities, which are recorded in
other comprehensive income, net of tax.
Total assets increased 9.0% to $66.1 billion at June 30, 2022,
from $60.6 billion at March 31, 2022, and increased 34.6% from
$49.1 billion at June 30, 2021. The increase in total assets from
March 31, 2022 was driven by continued organic loan and deposit
growth. The increase in total assets from June 30, 2021 was also
driven by continued organic loan growth.
1 See reconciliation of Non-GAAP Financial Measures.
Asset Quality
Provision for credit losses totaled $27.5 million for the second
quarter 2022, compared to $9.0 million for the first quarter 2022,
and a recovery of credit losses of $14.5 million for the second
quarter 2021. Net loan charge-offs in the second quarter 2022 were
$1.4 million, or 0.01% of average loans (annualized), compared to
$0.2 million, or approximately 0.00%, in the first quarter 2022,
and $0.1 million, or approximately 0.00%, in the second quarter
2021.
Nonaccrual loans decreased $6 million to $85 million during the
quarter and decreased $12 million from June 30, 2021. Loans past
due 90 days and still accruing interest were zero (excluding
government insured loans of $555 million) at June 30, 2022,
compared to zero at March 31, 2022 and June 30, 2021. Loans past
due 30-89 days and still accruing interest totaled $117 million
(excluding government insured loans of $161 million) at June 30,
2022, an increase from $58 million at March 31, 2022, and an
increase from $10 million at June 30, 2021.
Repossessed assets totaled $12 million at June 30, 2022, flat
from March 31, 2022, and an increase of $8 million from $4 million
at June 30, 2021. Classified assets totaled $346 million at June
30, 2022, a decrease of $19 million from $365 million at March 31,
2022, and an increase of $107 million from $239 million at June 30,
2021.
The ratio of classified assets to Tier 1 capital plus the
allowance for credit losses, a common regulatory measure of asset
quality, was 6.7% at June 30, 2022, compared to 7.4% at March 31,
2022, and 6.4% at June 30, 2021.
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 and
beginning on January 25, 2022 includes the financial results of
Digital Disbursements.
- 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 $29.4
billion at June 30, 2022, an increase of $3.7 billion during the
quarter, and an increase of $8.8 billion during the last twelve
months. Deposits for the Commercial segment totaled $29.5 billion
at June 30, 2022, a decrease of $651 million during the quarter,
and an increase of $3.2 billion during the last twelve months.
Pre-tax income for the Commercial segment was $239.9 million for
the three months ended June 30, 2022, an increase of $3.1 million
from the three months ended March 31, 2022, and an increase of
$30.8 million from the three months ended June 30, 2021. For the
six months ended June 30, 2022, the Commercial segment reported
total pre-tax income of $476.6 million, an increase of $46.6
million compared to the six months ended June 30, 2021.
The Consumer Related segment reported an HFI loan balance of
$18.9 billion at June 30, 2022, an increase of $3.6 billion during
the quarter, and an increase of $9.5 billion during the last twelve
months. The Consumer Related segment also has loans held for sale,
initially acquired as part of the AmeriHome acquisition, of $3.0
billion at June 30, 2022, a decrease of $1.8 billion during the
quarter. Deposits for the Consumer Related segment totaled $19.7
billion, an increase of $1.2 billion during the quarter, and an
increase of $4.8 billion during the last twelve months.
Pre-tax income for the Consumer Related segment was $160.1
million for the three months ended June 30, 2022, an increase of
$33.2 million from the three months ended March 31, 2022, and an
increase of $46.5 million from the three months ended June 30,
2021. Pre-tax income for the Consumer Related segment for the six
months ended June 30, 2022 totaled $287.1 million, an increase of
$102.0 million compared to the six months ended June 30, 2021.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and
live webcast to discuss its second quarter 2022 financial results
at 12:00 p.m. ET on Friday, July 22, 2022. Participants may access
the call by dialing 1-888-396-8049 and using the conference ID
57514725 or via live audio webcast using the website link
https://event.on24.com/wcc/r/3825847/3012FB8A58AE72C7E9C5700F7983D54D.
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 July 22nd
through 11:00 p.m. ET August 22nd by dialing 1-877-674-7070, using
passcode 514725#.
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, 2021 and the Company's
subsequent Quarterly Reports on Form 10-Q, each as filed with the
Securities and Exchange Commission; 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 war between Russia and Ukraine; 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 $60 billion in assets, Western Alliance
Bancorporation (NYSE:WAL) is one of the country’s top-performing
banking companies. The company is #2 best-performing of the 50
largest public U.S. banks in the S&P Global Market Intelligence
listing for 2021, ranks high year after year on the Forbes list of
“America’s Best Banks” and was named #1 Best Emerging Regional Bank
per Bank Director’s 2022 RankingBanking study. Its primary
subsidiary, Western Alliance Bank, Member FDIC, helps clients
realize their ambitions with teams of experienced bankers and
mortgage experts who deliver superior service and a full spectrum
of customized loan, deposit and treasury management capabilities,
including 24/7 funds transfer and other blockchain-based offerings.
Business clients also benefit from a powerful array of specialized
financial services that provide strong expertise and tailored
solutions for a wide variety of industries and sectors. Serving
clients across the country wherever business happens, Western
Alliance Bank operates individual, full-service banking brands and
has 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 June 30,
2022
2021
Change %
(in millions)
Total assets
$
66,055
$
49,069
34.6
%
Loans held for sale
3,010
4,465
(32.6
)
HFI loans, net of deferred fees
48,365
30,027
61.1
Investment securities
8,802
7,845
12.2
Total deposits
53,712
41,921
28.1
Qualifying debt
891
1,140
(21.8
)
Stockholders' equity
4,959
4,035
22.9
Tangible common equity, net of tax (1)
3,971
3,426
15.9
Selected Income Statement Data:
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2022
2021
Change %
2022
2021
Change %
(in millions, except per share
data)
(in millions, except per share
data)
Interest income
$
579.6
$
398.5
45.4
%
$
1,064.1
$
732.6
45.2
%
Interest expense
54.6
28.0
95.0
89.6
44.8
NM
Net interest income
525.0
370.5
41.7
974.5
687.8
41.7
Provision for (recovery of) credit
losses
27.5
(14.5
)
NM
36.5
(46.9
)
NM
Net interest income after provision for
credit losses
497.5
385.0
29.2
938.0
734.7
27.7
Non-interest income
95.0
136.0
(30.1
)
201.3
155.7
29.3
Non-interest expense
268.9
244.8
9.8
517.5
379.8
36.3
Income before income taxes
323.6
276.2
17.2
621.8
510.6
21.8
Income tax expense
63.4
52.4
21.0
121.5
94.3
28.8
Net income
260.2
223.8
16.3
500.3
416.3
20.2
Dividends on preferred stock
3.2
—
—
6.4
—
—
Net income available to common
stockholders
$
257.0
$
223.8
14.8
$
493.9
$
416.3
18.6
Diluted earnings per common share
$
2.39
$
2.17
10.1
$
4.61
$
4.07
13.3
(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 June 30,
For the Six Months Ended June
30,
2022
2021
Change %
2022
2021
Change %
Diluted earnings per common share
$
2.39
$
2.17
10.1
%
$
4.61
$
4.07
13.3
%
Book value per common share
43.07
38.70
11.3
Tangible book value per common share, net
of tax (1)
36.67
32.86
11.6
Average common shares outstanding
(in millions):
Basic
107.3
102.7
4.5
106.7
101.8
4.8
Diluted
107.7
103.4
4.2
107.1
102.4
4.6
Common shares outstanding
108.3
104.2
3.9
Selected Performance Ratios:
Return on average assets (2)
1.62
%
1.86
%
(12.9
) %
1.63
%
1.89
%
(13.8
) %
Return on average tangible common equity
(1, 2)
25.6
28.1
(8.9
)
24.8
26.2
(5.4
)
Net interest margin (2)
3.54
3.51
0.9
3.44
3.45
(0.3
)
Efficiency ratio - tax equivalent basis
(1)
42.8
47.5
(9.9
)
43.4
44.2
(1.8
)
Loan to deposit ratio
90.0
71.6
25.7
Asset Quality Ratios:
Net charge-offs to average loans
outstanding (2)
0.01
%
0.00
%
NM
0.01
%
0.01
%
—
%
Nonaccrual loans to funded HFI loans
0.18
0.32
(43.8
)
Nonaccrual loans and repossessed assets to
total assets
0.15
0.20
(25.0
)
Allowance for loan losses to funded HFI
loans
0.56
0.78
(28.2
)
Allowance for loan losses to nonaccrual
HFI loans
322
242
33.2
Capital Ratios:
Jun 30, 2022
Mar 31, 2022
Jun 30, 2021
Tangible common equity (1)
6.1
%
6.7
%
7.1
%
Common Equity Tier 1 (3)
9.0
9.0
9.2
Tier 1 Leverage ratio (3)
7.6
8.0
7.3
Tier 1 Capital (3)
9.7
9.8
9.4
Total Capital (3)
11.9
12.0
12.8
(1)
See Reconciliation of Non-GAAP
Financial Measures.
(2)
Annualized on an actual/actual
basis for periods less than 12 months.
(3)
Capital ratios for June 30, 2022
are preliminary.
NM
Changes +/- 100% are not
meaningful.
Western Alliance Bancorporation and
Subsidiaries
Condensed Consolidated Income
Statements
Unaudited
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in millions, except per
share data)
Interest income:
Loans
$
516.6
$
353.8
$
951.3
$
652.2
Investment securities
59.3
43.5
107.3
77.5
Other
3.7
1.2
5.5
2.9
Total interest income
579.6
398.5
1,064.1
732.6
Interest expense:
Deposits
27.1
11.6
41.2
22.4
Qualifying debt
8.6
7.2
17.0
13.1
Borrowings
18.9
9.2
31.4
9.3
Total interest expense
54.6
28.0
89.6
44.8
Net interest income
525.0
370.5
974.5
687.8
Provision for (recovery of) credit
losses
27.5
(14.5
)
36.5
(46.9
)
Net interest income after provision for
credit losses
497.5
385.0
938.0
734.7
Non-interest income:
Net loan servicing revenue (expense)
45.4
(20.8
)
86.5
(20.8
)
Net gain on loan origination and sale
activities
27.2
132.0
64.1
132.0
Gain on recovery from credit
guarantees
9.0
—
11.3
—
Service charges and fees
7.6
7.4
14.6
14.1
Commercial banking related income
5.8
4.5
10.9
7.9
Income from equity investments
5.2
6.8
9.3
14.4
(Loss) gain on sales of investment
securities
(0.2
)
—
6.7
0.1
Fair value (loss) gain adjustments on
assets measured at fair value, net
(10.0
)
3.2
(16.6
)
1.7
Other
5.0
2.9
14.5
6.3
Total non-interest income
95.0
136.0
201.3
155.7
Non-interest expenses:
Salaries and employee benefits
139.0
128.9
277.3
212.6
Legal, professional, and directors'
fees
25.1
14.0
49.1
24.1
Data processing
19.7
15.0
37.3
24.9
Deposit costs
18.1
7.1
27.4
13.4
Loan servicing expenses
14.7
22.3
25.5
22.3
Occupancy
13.0
10.4
25.8
19.0
Insurance
6.9
5.5
14.1
9.7
Loan acquisition and origination
expenses
6.4
10.5
12.9
10.5
Business development and marketing
5.4
3.2
9.8
4.6
Net (gain) on sales and valuations of
repossessed and other assets
(0.3
)
(1.5
)
(0.2
)
(1.8
)
Acquisition and restructure expenses
—
15.7
0.4
16.1
Other
20.9
13.7
38.1
24.4
Total non-interest expense
268.9
244.8
517.5
379.8
Income before income taxes
323.6
276.2
621.8
510.6
Income tax expense
63.4
52.4
121.5
94.3
Net income
260.2
223.8
500.3
416.3
Dividends on preferred stock
3.2
—
6.4
—
Net income available to common
stockholders
$
257.0
$
223.8
$
493.9
$
416.3
Earnings per common share:
Diluted shares
107.7
103.4
107.1
102.4
Diluted earnings per share
$
2.39
$
2.17
$
4.61
$
4.07
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Income Statements
Unaudited
Three Months Ended
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Jun 30, 2021
(in millions, except per share
data)
Interest income:
Loans
$
516.6
$
434.7
$
438.6
$
398.0
$
353.8
Investment securities
59.3
48.0
43.7
43.5
43.5
Other
3.7
1.8
1.0
1.3
1.2
Total interest income
579.6
484.5
483.3
442.8
398.5
Interest expense:
Deposits
27.1
14.1
12.8
12.3
11.6
Qualifying debt
8.6
8.4
9.2
10.8
7.2
Borrowings
18.9
12.5
10.7
9.3
9.2
Total interest expense
54.6
35.0
32.7
32.4
28.0
Net interest income
525.0
449.5
450.6
410.4
370.5
Provision for (recovery of) credit
losses
27.5
9.0
13.2
12.3
(14.5
)
Net interest income after provision for
credit losses
497.5
440.5
437.4
398.1
385.0
Non-interest income:
Net loan servicing revenue (expense)
45.4
41.1
2.3
2.2
(20.8
)
Net gain on loan origination and sale
activities
27.2
36.9
73.2
121.0
132.0
Gain on recovery from credit
guarantees
9.0
2.3
7.2
—
—
Service charges and fees
7.6
7.0
7.1
7.1
7.4
Commercial banking related income
5.8
5.1
4.9
4.6
4.5
Income from equity investments
5.2
4.1
5.2
2.5
6.8
(Loss) gain on sales of investment
securities
(0.2
)
6.9
8.3
—
—
Fair value (loss) gain adjustments on
assets measured at fair value, net
(10.0
)
(6.6
)
(0.8
)
(2.2
)
3.2
Other
5.0
9.5
3.0
2.9
2.9
Total non-interest income
95.0
106.3
110.4
138.1
136.0
Non-interest expenses:
Salaries and employee benefits
139.0
138.3
120.6
133.5
128.9
Legal, professional, and directors'
fees
25.1
24.0
20.8
13.7
14.0
Data processing
19.7
17.6
17.9
15.4
15.0
Deposit costs
18.1
9.3
9.1
7.3
7.1
Loan servicing expenses
14.7
10.8
15.6
15.6
22.3
Occupancy
13.0
12.8
12.4
12.4
10.4
Insurance
6.9
7.2
7.1
6.2
5.5
Loan acquisition and origination
expenses
6.4
6.5
8.6
9.7
10.5
Business development and marketing
5.4
4.4
6.1
2.8
3.2
Net (gain) loss on sales and valuations of
repossessed and other assets
(0.3
)
0.1
(0.4
)
(1.3
)
(1.5
)
Loss on extinguishment of debt
—
—
5.9
—
—
Acquisition and restructure expenses
(recoveries)
—
0.4
(3.2
)
2.4
15.7
Other
20.9
17.2
17.3
16.1
13.7
Total non-interest expense
268.9
248.6
237.8
233.8
244.8
Income before income taxes
323.6
298.2
310.0
302.4
276.2
Income tax expense
63.4
58.1
64.0
65.5
52.4
Net income
260.2
240.1
246.0
236.9
223.8
Dividends on preferred stock
3.2
3.2
3.5
—
—
Net income available to common
stockholders
$
257.0
$
236.9
$
242.5
$
236.9
$
223.8
Earnings per common share:
Diluted shares
107.7
106.6
104.5
103.9
103.4
Diluted earnings per share
$
2.39
$
2.22
$
2.32
$
2.28
$
2.17
Western Alliance Bancorporation and
Subsidiaries
Five Quarter Condensed Consolidated
Balance Sheets
Unaudited
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Jun 30, 2021
(in millions)
Assets:
Cash and due from banks
$
1,886
$
2,602
$
516
$
918
$
3,396
Investment securities
8,802
8,277
7,541
7,696
7,845
Loans held for sale
3,010
4,762
5,635
6,534
4,465
Loans held for investment:
Commercial and industrial
20,754
17,862
18,297
16,525
14,284
Commercial real estate - non-owner
occupied
7,775
6,849
6,526
5,844
5,696
Commercial real estate - owner
occupied
1,848
1,805
1,898
1,996
2,028
Construction and land development
3,231
3,278
3,023
2,943
2,857
Residential real estate
14,701
11,270
9,282
7,453
5,121
Consumer
56
55
49
41
41
Loans, net of deferred fees
48,365
41,119
39,075
34,802
30,027
Allowance for loan losses
(273
)
(258
)
(252
)
(247
)
(233
)
Loans, net of deferred fees and
allowance
48,092
40,861
38,823
34,555
29,794
Mortgage servicing rights
826
950
698
605
726
Premises and equipment, net
210
196
182
161
150
Operating lease right-of-use asset
136
142
133
106
95
Other assets acquired through foreclosure,
net
12
12
12
12
4
Bank owned life insurance
180
179
180
179
178
Goodwill and other intangibles, net
695
698
635
608
611
Other assets
2,206
1,897
1,628
1,401
1,805
Total assets
$
66,055
$
60,576
$
55,983
$
52,775
$
49,069
Liabilities and Stockholders'
Equity:
Liabilities:
Deposits
Non-interest bearing demand deposits
$
23,721
$
23,520
$
21,353
$
21,058
$
20,106
Interest bearing:
Demand
8,387
8,268
6,924
4,955
4,188
Savings and money market
19,026
18,553
17,279
17,440
15,810
Certificates of deposit
2,578
1,818
2,056
1,830
1,817
Total deposits
53,712
52,159
47,612
45,283
41,921
Borrowings
5,210
833
1,502
1,003
615
Qualifying debt
891
893
896
1,065
1,140
Operating lease liability
151
155
143
115
102
Accrued interest payable and other
liabilities
1,132
1,524
867
795
1,256
Total liabilities
61,096
55,564
51,020
48,261
45,034
Stockholders' Equity:
Preferred stock
295
295
295
295
—
Common stock and additional paid-in
capital
1,990
1,979
1,879
1,610
1,603
Retained earnings
3,192
2,973
2,773
2,567
2,367
Accumulated other comprehensive (loss)
income
(518
)
(235
)
16
42
65
Total stockholders' equity
4,959
5,012
4,963
4,514
4,035
Total liabilities and stockholders'
equity
$
66,055
$
60,576
$
55,983
$
52,775
$
49,069
Western Alliance Bancorporation and
Subsidiaries
Changes in the Allowance For Credit
Losses on Loans
Unaudited
Three Months Ended
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Jun 30, 2021
(in millions)
Allowance for loan losses
Balance, beginning of period
$
257.6
$
252.5
$
246.9
$
232.9
$
247.1
Provision for (recovery of) credit losses
(1)
17.0
5.3
7.0
17.0
(14.1
)
Recoveries of loans previously
charged-off:
Commercial and industrial
0.8
2.4
1.8
0.1
0.4
Commercial real estate - non-owner
occupied
—
—
0.3
—
1.7
Commercial real estate - owner
occupied
0.1
—
—
0.1
—
Construction and land development
—
—
—
0.1
—
Residential real estate
0.1
—
0.4
—
0.1
Consumer
—
—
—
—
—
Total recoveries
1.0
2.4
2.5
0.3
2.2
Loans charged-off:
Commercial and industrial
2.4
2.6
3.8
3.3
2.3
Commercial real estate - non-owner
occupied
—
—
—
—
—
Commercial real estate - owner
occupied
—
—
—
—
—
Construction and land development
—
—
—
—
—
Residential real estate
—
—
0.1
—
—
Consumer
—
—
—
—
—
Total loans charged-off
2.4
2.6
3.9
3.3
2.3
Net loan charge-offs
1.4
0.2
1.4
3.0
0.1
Balance, end of period
$
273.2
$
257.6
$
252.5
$
246.9
$
232.9
Allowance for unfunded loan
commitments
Balance, beginning of period
$
43.3
$
37.6
$
32.1
$
31.3
$
32.6
Provision for (recovery of) credit losses
(1)
10.5
5.7
5.5
0.8
(1.3
)
Balance, end of period (2)
$
53.8
$
43.3
$
37.6
$
32.1
$
31.3
Components of the allowance for credit
losses on loans
Allowance for loan losses
$
273.2
$
257.6
$
252.5
$
246.9
$
232.9
Allowance for unfunded loan
commitments
53.8
43.3
37.6
32.1
31.3
Total allowance for credit losses on
loans
$
327.0
$
300.9
$
290.1
$
279.0
$
264.2
Net charge-offs to average loans -
annualized
0.01
%
0.00
%
0.02
%
0.04
%
0.00
%
Allowance ratios
Allowance for loan losses to funded HFI
loans (3)
0.56
%
0.63
%
0.65
%
0.71
%
0.78
%
Allowance for credit losses to funded HFI
loans (3)
0.68
0.73
0.74
0.80
0.88
Allowance for loan losses to nonaccrual
HFI loans
322
283
348
316
242
Allowance for credit losses to nonaccrual
HFI loans
386
331
400
357
274
(1)
The above tables reflect the provision for
credit losses on funded and unfunded loans. There was no provision
for credit losses on investment securities for the three months
ended June 30, 2022. The allowance for credit losses on investment
securities totaled $3 million as of June 30, 2022.
(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 $19 million as of June 30, 2022 related to an $11.1
billion pool of loans covered under four separate credit linked
note transactions.
Western Alliance Bancorporation and
Subsidiaries
Asset Quality Metrics
Unaudited
Three Months Ended
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Jun 30, 2021
(in millions)
Nonaccrual loans and repossessed
assets
Nonaccrual loans
$
85
$
91
$
73
$
78
$
96
Nonaccrual loans to funded HFI loans
0.18
%
0.22
%
0.19
%
0.22
%
0.32
%
Repossessed assets
$
12
$
12
$
12
$
12
$
4
Nonaccrual loans and repossessed assets to
total assets
0.15
%
0.17
%
0.15
%
0.17
%
0.20
%
Loans Past Due
Loans past due 90 days, still accruing
(1)
$
—
$
—
$
—
$
—
$
—
Loans past due 90 days, still accruing to
funded HFI loans
—
%
—
%
—
%
—
%
—
%
Loans past due 30 to 89 days, still
accruing (2)
$
117
$
58
$
53
$
24
$
10
Loans past due 30 to 89 days, still
accruing to funded HFI loans
0.24
%
0.14
%
0.13
%
0.07
%
0.03
%
Other credit quality metrics
Special mention loans
$
317
$
350
$
331
$
364
$
405
Special mention loans to funded HFI
loans
0.66
%
0.85
%
0.85
%
1.05
%
1.35
%
Classified loans on accrual
$
232
$
253
$
216
$
175
$
138
Classified loans on accrual to funded HFI
loans
0.48
%
0.61
%
0.55
%
0.50
%
0.46
%
Classified assets
$
346
$
365
$
301
$
265
$
239
Classified assets to total assets
0.52
%
0.60
%
0.54
%
0.50
%
0.49
%
(1)
Excludes government guaranteed residential
mortgage loans of $555 million as of June 30, 2022.
(2)
Excludes government guaranteed residential
mortgage loans of $161 million as of June 30, 2022.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
June 30, 2022
March 31, 2022
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
($ in millions)
Interest earning assets
Loans held for sale
$
4,333
$
43.1
3.99
%
$
6,521
$
50.4
3.14
%
Loans held for investment:
Commercial and industrial
19,576
205.6
4.27
17,487
165.9
3.91
CRE - non-owner occupied
7,152
83.1
4.67
6,690
73.2
4.44
CRE - owner occupied
1,836
22.7
5.05
1,859
22.8
5.07
Construction and land development
3,336
47.7
5.73
3,090
41.7
5.47
Residential real estate
13,698
113.8
3.33
10,384
80.2
3.13
Consumer
58
0.6
4.29
52
0.5
3.95
Total HFI loans (1), (2), (3)
45,656
473.5
4.19
39,562
384.3
3.98
Securities:
Securities - taxable
6,674
41.3
2.48
5,534
29.9
2.19
Securities - tax-exempt
2,017
18.0
4.53
2,136
18.1
4.29
Total securities (1)
8,691
59.3
2.94
7,670
48.0
2.77
Cash and other
1,650
3.7
0.91
2,058
1.8
0.36
Total interest earning assets
60,330
579.6
3.91
55,811
484.5
3.58
Non-interest earning assets
Cash and due from banks
262
245
Allowance for credit losses
(266
)
(262
)
Bank owned life insurance
179
181
Other assets
3,766
3,299
Total assets
$
64,271
$
59,274
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
8,346
$
8.0
0.38
%
$
7,743
$
2.7
0.14
%
Savings and money market
18,771
16.5
0.35
18,131
9.6
0.21
Certificates of deposit
2,040
2.6
0.52
1,920
1.8
0.38
Total interest-bearing deposits
29,157
27.1
0.37
27,794
14.1
0.21
Short-term borrowings
2,917
8.6
1.19
1,150
1.7
0.62
Long-term debt
786
10.3
5.24
770
10.8
5.67
Qualifying debt
894
8.6
3.85
896
8.4
3.81
Total interest-bearing
liabilities
33,754
54.6
0.65
30,610
35.0
0.46
Interest cost of funding earning
assets
0.37
0.26
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
24,327
22,580
Other liabilities
1,169
1,095
Stockholders’ equity
5,021
4,989
Total liabilities and stockholders'
equity
$
64,271
$
59,274
Net interest income and margin (4)
$
525.0
3.54
%
$
449.5
3.32
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $8.2 million and $8.0 million for the three months ended June
30, 2022 and March 31, 2022, respectively.
(2)
Included in the yield computation are net
loan fees of $36.4 million and $29.1 million for the three months
ended June 30, 2022 and March 31, 2022, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Three Months Ended
June 30, 2022
June 30, 2021
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
($ in millions)
Interest earning assets
Loans held for sale
$
4,333
$
43.1
3.99
%
$
5,347
$
42.7
3.21
%
Loans held for investment:
Commercial and industrial
19,576
205.6
4.27
13,897
148.2
4.37
CRE - non-owner-occupied
7,152
83.1
4.67
5,698
67.8
4.78
CRE - owner-occupied
1,836
22.7
5.05
2,025
24.1
4.88
Construction and land development
3,336
47.7
5.73
2,792
39.9
5.73
Residential real estate
13,698
113.8
3.33
3,748
30.7
3.29
Consumer
58
0.6
4.29
34
0.4
4.52
Total HFI loans (1), (2), (3)
45,656
473.5
4.19
28,194
311.1
4.48
Securities:
Securities - taxable
6,674
41.3
2.48
5,630
26.0
1.85
Securities - tax-exempt
2,017
18.0
4.53
2,166
17.5
4.07
Total securities (1)
8,691
59.3
2.94
7,796
43.5
2.47
Other
1,650
3.7
0.91
1,911
1.2
0.25
Total interest earning assets
60,330
579.6
3.91
43,248
398.5
3.77
Non-interest earning assets
Cash and due from banks
262
458
Allowance for credit losses
(266
)
(257
)
Bank owned life insurance
179
178
Other assets
3,766
4,518
Total assets
$
64,271
$
48,145
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
8,346
$
8.0
0.38
%
$
4,370
$
1.5
0.14
%
Savings and money market accounts
18,771
16.5
0.35
15,168
8.0
0.21
Certificates of deposit
2,040
2.6
0.52
1,737
2.1
0.49
Total interest-bearing deposits
29,157
27.1
0.37
21,275
11.6
0.22
Short-term borrowings
2,917
8.6
1.19
1,506
4.5
1.21
Long-term debt
786
10.3
5.24
353
4.7
5.30
Qualifying debt
894
8.6
3.85
701
7.2
4.12
Total interest-bearing
liabilities
33,754
54.6
0.65
23,835
28.0
0.47
Interest cost of funding earning
assets
0.37
0.26
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
24,327
18,385
Other liabilities
1,169
2,140
Stockholders’ equity
5,021
3,785
Total liabilities and stockholders'
equity
$
64,271
$
48,145
Net interest income and margin (4)
$
525.0
3.54
%
$
370.5
3.51
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $8.2 million and $8.5 million for the three months ended June
30, 2022 and 2021, respectively.
(2)
Included in the yield computation are net
loan fees of $36.4 million and $32.6 million for the three months
ended June 30, 2022 and 2021, respectively.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
Unaudited
Six Months Ended
June 30, 2022
June 30, 2021
Average
Balance
Interest
Average Yield /
Cost
Average
Balance
Interest
Average Yield /
Cost
($ in millions)
($ in millions)
Interest earning assets
Loans held for sale
$
5,421
$
93.6
3.48
%
$
2,688
$
42.7
3.21
%
Loans held for investment:
Commercial and industrial
18,537
371.5
4.10
13,925
299.1
4.43
CRE - non-owner occupied
6,922
156.2
4.56
5,674
132.9
4.73
CRE - owner occupied
1,847
45.5
5.06
2,059
48.5
4.86
Construction and land development
3,214
89.3
5.61
2,639
75.5
5.77
Residential real estate
12,050
194.1
3.25
3,131
52.7
3.39
Consumer
55
1.1
4.14
34
0.8
4.96
Total HFI loans (1), (2), (3)
42,625
857.7
4.09
27,462
609.5
4.53
Securities:
Securities - taxable
6,107
71.1
2.35
5,084
44.5
1.77
Securities - tax-exempt
2,076
36.2
4.41
2,074
33.0
4.03
Total securities (1)
8,183
107.3
2.86
7,158
77.5
2.42
Other
1,853
5.5
0.60
3,877
2.9
0.15
Total interest earning assets
58,082
1,064.1
3.75
41,185
732.6
3.67
Non-interest earning assets
Cash and due from banks
254
313
Allowance for credit losses
(264
)
(273
)
Bank owned life insurance
180
177
Other assets
3,534
2,904
Total assets
$
61,786
$
44,306
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts
$
8,046
$
10.7
0.27
%
$
4,139
$
2.8
0.14
%
Savings and money market accounts
18,453
26.1
0.29
14,584
15.1
0.21
Certificates of deposit
1,981
4.4
0.45
1,709
4.5
0.54
Total interest-bearing deposits
28,480
41.2
0.29
20,432
22.4
0.22
Short-term borrowings
2,038
10.4
1.03
769
4.6
1.21
Long-term debt
778
21.0
5.45
178
4.7
5.30
Qualifying debt
895
17.0
3.83
625
13.1
4.24
Total interest-bearing
liabilities
32,191
89.6
0.56
22,004
44.8
0.41
Interest cost of funding earning
assets
0.31
0.22
Non-interest-bearing
liabilities
Non-interest-bearing demand deposits
23,458
17,186
Other liabilities
1,132
1,460
Stockholders’ equity
5,005
3,656
Total liabilities and stockholders'
equity
$
61,786
$
44,306
Net interest income and margin (4)
$
974.5
3.44
%
$
687.8
3.45
%
(1)
Yields on loans and securities have been
adjusted to a tax equivalent basis. The tax equivalent adjustment
was $16.2 million and $16.5 million for the six ended June 30, 2022
and 2021, respectively.
(2)
Included in the yield computation are net
loan fees of $65.5 million for the six ended June 30, 2022 and
2021.
(3)
Includes non-accrual loans.
(4)
Net interest margin is computed by
dividing net interest income by total average earning assets,
annualized on an actual/actual basis.
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate & Other
At June 30, 2022:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
10,688
$
15
$
—
$
10,673
Loans held for sale
3,010
—
3,010
—
Loans, net of deferred fees and costs
48,365
29,448
18,917
—
Less: allowance for credit losses
(273
)
(242
)
(31
)
—
Total loans
48,092
29,206
18,886
—
Other assets acquired through foreclosure,
net
12
12
—
—
Goodwill and other intangible assets,
net
695
294
401
—
Other assets
3,558
275
1,510
1,773
Total assets
$
66,055
$
29,802
$
23,807
$
12,446
Liabilities:
Deposits
$
53,712
$
29,482
$
19,690
$
4,540
Borrowings and qualifying debt
6,101
29
356
5,716
Other liabilities
1,283
235
300
748
Total liabilities
61,096
29,746
20,346
11,004
Allocated equity:
4,959
2,842
1,852
265
Total liabilities and stockholders'
equity
$
66,055
$
32,588
$
22,198
$
11,269
Excess funds provided (used)
—
2,786
(1,609
)
(1,177
)
No. of offices
60
50
8
2
No. of full-time equivalent employees
3,254
607
1,084
1,563
Income Statement:
Three Months Ended June 30,
2022:
(in millions)
Net interest income
$
525.0
$
370.5
$
219.4
$
(64.9
)
Provision for (recovery of) credit
losses
27.5
32.7
(5.2
)
—
Net interest income (expense) after
provision for credit losses
497.5
337.8
224.6
(64.9
)
Non-interest income
95.0
18.0
74.6
2.4
Non-interest expense
268.9
115.9
139.1
13.9
Income (loss) before income taxes
323.6
239.9
160.1
(76.4
)
Income tax expense (benefit)
63.4
57.3
38.1
(32.0
)
Net income (loss)
$
260.2
$
182.6
$
122.0
$
(44.4
)
Six Months Ended June 30, 2022:
(in millions)
Net interest income
$
974.5
$
705.3
$
402.7
$
(133.5
)
Provision for (recovery of) credit
losses
36.5
33.2
5.3
(2.0
)
Net interest income (expense) after
provision for credit losses
938.0
672.1
397.4
(131.5
)
Non-interest income
201.3
34.9
153.8
12.6
Non-interest expense
517.5
230.4
264.1
23.0
Income (loss) before income taxes
621.8
476.6
287.1
(141.9
)
Income tax expense (benefit)
121.5
113.4
68.5
(60.4
)
Net income (loss)
$
500.3
$
363.2
$
218.6
$
(81.5
)
Western Alliance Bancorporation and
Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:
Consolidated Company
Commercial
Consumer Related
Corporate
At December 31, 2021:
(dollars in millions)
Assets:
Cash, cash equivalents, and investment
securities
$
8,057
$
13
$
82
$
7,962
Loans held for sale
5,635
—
5,635
—
Loans, net of deferred fees and costs
39,075
25,092
13,983
—
Less: allowance for credit losses
(252
)
(226
)
(26
)
—
Total loans
38,823
24,866
13,957
—
Other assets acquired through foreclosure,
net
12
12
—
—
Goodwill and other intangible assets,
net
635
295
340
—
Other assets
2,821
254
1,278
1,289
Total assets
$
55,983
$
25,440
$
21,292
$
9,251
Liabilities:
Deposits
$
47,612
$
30,467
$
15,363
$
1,782
Borrowings and qualifying debt
2,398
—
353
2,045
Other liabilities
1,010
233
138
639
Total liabilities
51,020
30,700
15,854
4,466
Allocated equity:
4,963
2,588
1,596
779
Total liabilities and stockholders'
equity
$
55,983
$
33,288
$
17,450
$
5,245
Excess funds provided (used)
—
7,848
(3,842
)
(4,006
)
No. of offices
58
50
7
1
No. of full-time equivalent employees
3,139
628
1,173
1,338
Income Statement:
Three Months Ended June 30,
2021:
(in millions)
Net interest income
$
370.5
$
280.7
$
139.5
$
(49.7
)
(Recovery of) provision for credit
losses
(14.5
)
(18.6
)
7.2
(3.1
)
Net interest income (expense) after
provision for credit losses
385.0
299.3
132.3
(46.6
)
Non-interest income
136.0
13.9
116.9
5.2
Non-interest expense
244.8
104.1
135.6
5.1
Income (loss) before income taxes
276.2
209.1
113.6
(46.5
)
Income tax expense (benefit)
52.4
50.4
27.5
(25.5
)
Net income (loss)
$
223.8
$
158.7
$
86.1
$
(21.0
)
Six Months Ended June 30, 2021:
(in millions)
Net interest income
$
687.8
$
544.5
$
247.5
$
(104.2
)
(Recovery of) provision for credit
losses
(46.9
)
(54.8
)
8.9
(1.0
)
Net interest income (expense) after
provision for credit losses
734.7
599.3
238.6
(103.2
)
Non-interest income
155.7
33.1
117.4
5.2
Non-interest expense
379.8
202.4
170.9
6.5
Income (loss) before income taxes
510.6
430.0
185.1
(104.5
)
Income tax expense (benefit)
94.3
103.2
44.9
(53.8
)
Net income (loss)
$
416.3
$
326.8
$
140.2
$
(50.7
)
Western Alliance Bancorporation and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Unaudited
Pre-Provision Net Revenue by
Quarter:
Three Months Ended
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
(in millions)
Net interest income
$
525.0
$
449.5
$
450.6
$
410.4
$
370.5
Total non-interest income
95.0
106.3
110.4
138.1
136.0
Net revenue
$
620.0
$
555.8
$
561.0
$
548.5
$
506.5
Total non-interest expense
268.9
248.6
237.8
233.8
244.8
Pre-provision net revenue (1)
$
351.1
$
307.2
$
323.2
$
314.7
$
261.7
Less:
Provision for (recovery of) credit
losses
27.5
9.0
13.2
12.3
(14.5
)
Income tax expense
63.4
58.1
64.0
65.5
52.4
Net income
$
260.2
$
240.1
$
246.0
$
236.9
$
223.8
Efficiency Ratio by Quarter:
Total non-interest expense
$
268.9
$
248.6
$
237.8
$
233.8
$
244.8
Divided by:
Total net interest income
525.0
449.5
450.6
410.4
370.5
Plus:
Tax equivalent interest adjustment
8.2
8.0
8.4
8.5
8.5
Total non-interest income
95.0
106.3
110.4
138.1
136.0
$
628.2
$
563.8
$
569.4
$
557.0
$
515.0
Efficiency ratio - tax equivalent basis
(2)
42.8
%
44.1
%
41.8
%
42.0
%
47.5
%
Tangible Common Equity:
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
(dollars and shares in
millions)
Total stockholders' equity
$
4,959
$
5,012
$
4,963
$
4,514
$
4,035
Less:
Goodwill and intangible assets
695
698
635
608
611
Preferred stock
295
295
295
295
—
Total tangible common equity
3,969
4,019
4,033
3,611
3,424
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
2
Total tangible common equity, net of
tax
$
3,971
$
4,021
$
4,035
$
3,613
$
3,426
Total assets
$
66,055
$
60,576
$
55,983
$
52,775
$
49,069
Less: goodwill and intangible assets,
net
695
698
635
608
611
Tangible assets
65,360
59,878
55,348
52,167
48,458
Plus: deferred tax - attributed to
intangible assets
2
2
2
2
2
Total tangible assets, net of
tax
$
65,362
$
59,880
$
55,350
$
52,169
$
48,460
Tangible common equity ratio (3)
6.1
%
6.7
%
7.3
%
6.9
%
7.1
%
Common shares outstanding
108.3
108.3
106.6
104.2
104.2
Tangible book value per share, net of tax
(3)
$
36.67
$
37.13
$
37.84
$
34.67
$
32.86
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
financial condition and capital strength. In addition, we believe
that use of tangible equity and tangible assets improves the
comparability to other institutions that have not engaged in
acquisitions that resulted in recorded goodwill and other
intangibles.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220720006110/en/
Western Alliance Bancorporation Dale Gibbons, 602-952-5476
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