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Western Alliance Bancorporation Reports First Quarter 2024 Financial Results
FIRST QUARTER 2024 FINANCIAL RESULTS
Quarter Highlights:
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net income Earnings per share PPNR(1) Net interest margin Efficiency ratio Book value per
common share
$177.4 million $1.60 3.60% 65.2% $53.33
$247.0 million
-------------------- -------------------- -------------------- --------------------
CEO COMMENTARY:
LINKED-QUARTER BASIS YEAR-OVER-YEAR ------------------------------------------------------------------------------------------------------------------------------------------------ ---------------------------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS: Net income of $177.4 million and earnings per share of $1.60, up 19.9% and 20.3%, from $147.9 million and $1.33, respectively Net income of $177.4 million and earnings per share of $1.60, up 24.8% and 25.0%, from $142.2 million and $1.28, respectively Net revenue of $728.8 million, an increase of 6.8%, or $46.6 million, compared to an increase in non-interest expenses of 4.3%, or $19.9 million Net revenue of $728.8 million, an increase of 32.1%, or $176.9 million, compared to an increase in non-interest expenses of 38.5%, or $133.9 million Pre-provision net revenue(1) of $247.0 million, up $26.7 million from $220.3 million Pre-provision net revenue(1) of $247.0 million, up $43.0 million from $204.0 million Effective tax rate of 23.5%, compared to 29.9% Effective tax rate of 23.5%, compared to 23.0% FINANCIAL POSITION RESULTS: HFI loans of $50.7 billion, up $403 million, or 0.8%. Increase in HFI loans of $4.3 billion, or 9.2% Total deposits of $62.2 billion, up $6.9 billion, or 12.5% Increase in total deposits of $14.6 billion, or 30.8% HFI loan-to-deposit ratio of 81.5%, down from 90.9% HFI loan-to-deposit ratio of 81.5%, down from 97.6% Stockholders' equity of $6.2 billion, up $94 million Increase in stockholders' equity of $651 million LOANS AND ASSET QUALITY: Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.53%, compared to 0.40% Nonperforming assets to total assets of 0.53%, compared to 0.17% Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.07% Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.05% KEY PERFORMANCE METRICS:
(1) See reconciliation of Non-GAAP Financial Measures. See reconciliation of Non-GAAP Financial Measures.
Income Statement
Net interest income totaled $598.9 million in the first quarter 2024, an increase of $7.2 million, or 1.2%, from $591.7 million in the fourth quarter 2023, and a decrease of $11.0 million, or 1.8%, compared to the first quarter 2023. The increase in net interest income from the fourth quarter 2023 is due to a decrease in average short-term borrowings combined with an increase in average HFS loan and securities balances, partially offset by an increase in deposit balances and rates. The decrease in net interest income from the first quarter 2023 was driven by an increase in both the balances and rates of deposits, partially offset by higher yields on HFI loans and a higher average securities balance.
The Company recorded a provision for credit losses of $15.2 million in the first quarter 2024, an increase of $5.9 million from $9.3 million in the fourth quarter 2023, and a decrease of $4.2 million from $19.4 million in the first quarter 2023. The provision for credit losses during the first quarter 2024 is primarily reflective of loan growth, net-charge offs of $9.8 million and a stable economic outlook.
The Company's net interest margin in the first quarter 2024 was 3.60%, a decrease from 3.65% in the fourth quarter 2023, and a decrease from 3.79% in the first quarter 2023. Lower yields on average earning assets drove a decrease in net interest margin from the fourth quarter 2023. The decrease in net interest margin from the first quarter 2023 was driven by higher average balances and rates on deposits, partially offset by higher yields on HFI loan balances and a higher average securities balance.
Non-interest income was $129.9 million for the first quarter 2024, compared to $90.5 million for the fourth quarter 2023, and $(58.0) million for the first quarter 2023. The $39.4 million increase in non-interest income from the fourth quarter 2023 was primarily due to an increase of $37.3 million in net loan servicing revenue due to higher servicing income and fair value changes combined with lower losses on sales of investment securities of $13.9 million. These changes were partially offset by a $12.8 million decrease in service charges and fees and a $2.5 million decrease in net gain on loan origination and sale activities from lower spreads. The $187.9 million increase in non-interest income from the first quarter 2023 was primarily driven by fair value loss adjustments in the first quarter 2023 due to the Company's balance sheet repositioning efforts that did not reoccur, paired with higher income from equity investments and net gain on loan origination and sale activities.
Net revenue totaled $728.8 million for the first quarter 2024, an increase of $46.6 million or 6.8%, compared to $682.2 million for the fourth quarter 2023, and an increase of $176.9 million or 32.1%, compared to $551.9 million for the first quarter 2023.
Non-interest expense was $481.8 million for the first quarter 2024, compared to $461.9 million for the fourth quarter 2023, and $347.9 million for the first quarter 2023. The Company's efficiency ratio, adjusted for deposit costs(1) was 57.3% (or 54.4% further adjusted for notable items(1)) for the first quarter 2024, compared to 59.1% in the fourth quarter 2023, and 55.1% for the first quarter 2023. The increase in non-interest expense from the fourth quarter 2023 is due primarily to a $39.3 million gain on debt extinguishment related to the early payoff of the AmeriHome senior notes in the fourth quarter 2023 that did not reoccur, combined with increased salaries and benefits of $20.3 million due to seasonal compensation costs, partially offset by a decrease in insurance cost of $49.7 million due to the higher FDIC special assessment recognized in the fourth quarter 2023. The increase in non-interest expense from the first quarter 2023 is primarily attributable to an increase in deposit and insurance costs.
Income tax expense was $54.4 million for the first quarter 2024, compared to $63.1 million for the fourth quarter 2023, and $42.4 million for the first quarter 2023. The decrease in income tax expense from the fourth quarter 2023 is primarily related to the timing of benefits from Low Income Housing Tax Credit investments.
Net income was $177.4 million for the first quarter 2024, an increase of $29.5 million from $147.9 million for the fourth quarter 2023, and an increase of $35.2 million from $142.2 million for the first quarter 2023. Earnings per share totaled $1.60 for the first quarter 2024, compared to $1.33 for the fourth quarter 2023, and $1.28 for the first quarter 2023.
The Company views its pre-provision net revenue(1) ("PPNR") as a key metric for assessing the Company's earnings power, which it defines as net revenue less non-interest expense. For the first quarter 2024, the Company's PPNR(1) was $247.0 million, up $26.7 million from $220.3 million in the fourth quarter 2023, and up $43.0 million from $204.0 million in the first quarter 2023.
The Company had 3,312 full-time equivalent employees and 56 offices at March 31, 2024, compared to 3,260 full-time equivalent employees and 57 offices at December 31, 2023, and 3,340 full-time equivalent employees and 57 offices at March 31, 2023.
(1) See reconciliation of Non-GAAP Financial Measures. See reconciliation of Non-GAAP Financial Measures.
Balance Sheet
HFI loans, net of deferred fees totaled $50.7 billion at March 31, 2024, compared to $50.3 billion at December 31, 2023, and $46.4 billion at March 31, 2023. The increase in HFI loans of $403 million from the prior quarter was primarily driven by an increase of $646 million in commercial and industrial loans, partially offset by decreases of $154 million and $108 million in residential real estate and construction and land development loans, respectively. The increase in HFI loans of $4.3 billion from March 31, 2023 was primarily driven by a $4.2 billion and $374 million increase in commercial and industrial and construction and land development loans, respectively. This increase was partially offset by a $400 million decrease in residential real estate loans. HFS loans totaled $1.8 billion at March 31, 2024, compared to $1.4 billion at December 31, 2023, and $7.0 billion at March 31, 2023. The balance of HFS loans at March 31, 2024 and December 31, 2023 primarily consisted of AmeriHome HFS loans. The increase of $439 million in HFS loans from the prior quarter is primarily related to an increase in agency conforming loans. The decrease of $5.2 billion in HFS loans from March 31, 2023 primarily related to the sale and disposition of loans during 2023 related to the Company's balance sheet repositioning strategy.
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 March 31, 2024, the allowance for loan losses to funded HFI loans ratio was 0.67%, flat from December 31, 2023, and 0.66% at March 31, 2023. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.74% at March 31, 2024, compared to 0.73% at December 31, 2023, and 0.75% at March 31, 2023. 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 $9.0 billion, $9.1 billion, and $9.8 billion as of March 31, 2024, December 31, 2023, and March 31, 2023, 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 related to these pools of loans of $14.2 million as of March 31, 2024, $14.7 million as of December 31, 2023, and $20.8 million as of March 31, 2023. 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 0.90% at March 31, 2024, 0.89% at December 31, 2023, and 0.95% at March 31, 2023.
Deposits totaled $62.2 billion at March 31, 2024, an increase of $6.9 billion from $55.3 billion at December 31, 2023, and an increase of $14.6 billion from $47.6 billion at March 31, 2023. By deposit type, the increase from the prior quarter is attributable to increases of $3.9 billion from non-interest bearing demand deposits, $1.4 billion from savings and money market deposits, $1.0 billion from interest-bearing demand deposits, and $564 million from certificates of deposits. From March 31, 2023, interest-bearing demand deposits increased $6.2 billion, certificates of deposit increased $4.1 billion, savings and money market deposits increased $2.3 billion, and non-interest bearing demand deposits increased $1.9 billion. Non-interest bearing deposits were $18.4 billion at March 31, 2024, compared to $14.5 billion at December 31, 2023, and $16.5 billion at March 31, 2023.
The table below shows the Company's deposit types as a percentage of total deposits:
Mar 31, 2024 Dec 31, 2023 Mar 31, 2023
-------------------------- -------------------------- --------------------------
29.6 % 26.2 % 34.6 %
Non-interest bearing
26.0 26.7 29.1
Savings and money market
27.3 28.8 22.5
Interest-bearing demand
The Company's ratio of HFI loans to deposits was 81.5% at March 31, 2024, compared to 90.9% at December 31, 2023, and 97.6% at March 31, 2023.
Borrowings were $6.2 billion at March 31, 2024, $7.2 billion at December 31, 2023, and $15.9 billion at March 31, 2023. Borrowings decreased $1.0 billion from December 31, 2023, primarily due to a decrease in short-term borrowings. The decrease in borrowings from March 31, 2023 is due primarily to a decrease in short-term borrowings of $9.0 billion, combined with payoffs of the AmeriHome senior notes and credit linked notes, as part of the Company's balance sheet repositioning.
Qualifying debt totaled $896 million at March 31, 2024, compared to $895 million at December 31, 2023 and March 31, 2023.
Stockholders' equity was $6.2 billion at March 31, 2024, compared to $6.1 billion at December 31, 2023 and $5.5 billion at March 31, 2023. The increase in stockholders' equity from the prior quarter was due to net income, partially offset by unrealized fair value losses of $88 million on the Company's available-for-sale securities, which are recorded in other comprehensive loss, net of tax, and dividends to shareholders. Cash dividends of $40.7 million ($0.37 per common share) and $3.2 million ($0.27 per depository share) were paid to shareholders during the first quarter 2024. The increase in stockholders' equity from March 31, 2023 is primarily a function of net income, partially offset by dividends to shareholders.
The Company's common equity tier 1 capital ratio was 11.0% at March 31, 2024, compared to 10.8% and 9.4% at December 31, 2023 and March 31, 2023, respectively. At March 31, 2024, tangible common equity, net of tax(1), was 6.8% of tangible assets(1) and total capital was 14.0% of risk-weighted assets. The Company's tangible book value per share(1) was $47.30 at March 31, 2024, an increase of 1.2% from $46.72 at December 31, 2023, and an increase of 13.8% from $41.56 at March 31, 2023. The increase in tangible book value per share from December 31, 2023 and March 31, 2023 is attributable to net income.
Total assets increased 8.6% to $77.0 billion at March 31, 2024 from $70.9 billion at December 31, 2023, and increased 8.4% from $71.0 billion at March 31, 2023. The increase in total assets from December 31, 2023 was primarily driven by an increase in investments and cash. The increase in total assets from March 31, 2023 was primarily driven by an increase in investments and HFI loans, partially offset by a decrease in HFS loans.
(1) See reconciliation of Non-GAAP Financial Measures. See reconciliation of Non-GAAP Financial Measures.
Asset Quality
Provision for credit losses totaled $15.2 million for the first quarter 2024, compared to $9.3 million for the fourth quarter 2023, and $19.4 million for the first quarter 2023. Net loan charge-offs in the first quarter 2024 were $9.8 million, or 0.08% of average loans (annualized), compared to $8.5 million, or 0.07%, in the fourth quarter 2023, and $6.0 million, or 0.05%, in the first quarter 2023.
Nonaccrual loans increased $126 million to $399 million during the quarter and increased $292 million from March 31, 2023. Loans past due 90 days and still accruing interest totaled $6 million at March 31, 2024, $42 million at December 31, 2023, and $1 million at March 31, 2023 (excluding government guaranteed loans of $349 million, $399 million, and $494 million, respectively). Loans past due 30-89 days and still accruing interest totaled $117 million at March 31, 2024, a decrease from $164 million at December 31, 2023, and an increase from $58 million at March 31, 2023 (excluding government guaranteed loans of $224 million, $279 million, and $281 million, respectively).
Repossessed assets totaled $8 million at March 31, 2024, flat from December 31, 2023, and a decrease of $3 million from March 31, 2023. Classified assets totaled $781 million at March 31, 2024, an increase of $108 million from $673 million at December 31, 2023, and an increase of $322 million from $459 million at March 31, 2023.
The ratio of classified assets to Tier 1 capital plus the allowance for credit losses(2), a common regulatory measure of asset quality, was 12.0% at March 31, 2024, compared to 10.5% at December 31, 2023, and 7.8% at March 31, 2023.
(1) See reconciliation of Non-GAAP Financial Measures. 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 $29.6 billion at March 31, 2024, an increase of $506 million during the quarter, and an increase of $2.4 billion during the last twelve months. Loans held for sale totaled zero at March 31, 2024 and December 31, 2023, compared to $4.7 billion as of March 31, 2023 as the Company executed its balance sheet repositioning strategy. Deposits for the Commercial segment totaled $25.1 billion at March 31, 2024, an increase of $1.2 billion during the quarter, and an increase of $3.2 billion during the last twelve months.
Pre-tax income for the Commercial segment was $143.6 million for the three months ended March 31, 2024, a decrease of $24.8 million from the three months ended December 31, 2023, and a decrease of $15.8 million from the three months ended March 31, 2023.
The Consumer Related segment reported an HFI loan balance of $21.1 billion at March 31, 2024, a decrease of $103 million during the quarter, and an increase of $1.9 billion during the last twelve months. The Consumer Related segment also had loans held for sale of $1.8 billion at March 31, 2024, an increase of $439 million during the quarter, and a decrease of $449 million during the last twelve months. Deposits for the Consumer Related segment totaled $30.5 billion, an increase of $5.6 billion during the quarter, and an increase of $10.5 billion during the last twelve months.
Pre-tax income for the Consumer Related segment was $92.8 million for the three months ended March 31, 2024, an increase of $17.2 million from the three months ended December 31, 2023, and an increase of $36.0 million from the three months ended March 31, 2023.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its first quarter 2024 financial results at 12:00 p.m. ET on Friday, April 19, 2024. Participants may access the call by dialing 1-833-470-1428 and using access code 075340 or via live audio webcast using the website link https://events.q4inc.com/attendee/894297638. 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 April 19th through 11:59 p.m. ET May 19th by dialing 1-866-813-9403, using access code 742981.
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, 2023, 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 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 and receiving #1 rankings on Institutional Investor's All-America Executive Team Midcap 2023-2024 for Best CEO, Best CFO, Best Company Board of Directors and Best Investor Relations Team. 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 March 31,
---------------------------------------------------------------------------------------------------------------------------------------------------
2024 2023 Change %
--------------------------- ---------------------------------------------- ----------------------------------
(in millions)
$ 76,989 $ 71,047 8.4 %
Total assets
1,841 7,022 (73.8 )
Loans held for sale
50,700 46,435 9.2
HFI loans, net of deferred fees
16,092 16,092 16,092 9,105 9,105 9,105 76.7 76.7 76.7
Investment securities
62,228 47,587 30.8
Total deposits
6,221 15,853 (60.8 )
Borrowings
896 895 0.1
Qualifying debt
6,172 5,521 11.8
Stockholders' equity
5,213 4,551 14.5
Tangible common equity, net of tax (1)
5,787 5,159 12.2
Common equity Tier 1 capital
Selected Income Statement Data:
For the Three Months Ended March 31,
---------------------------------------------------------------------------------------------------------------------------------------------------
2024 2023 Change %
--------------------------- ---------------------------------------------- ----------------------------------
(in millions, except per share data)
$ 1,055.0 $ 968.9 8.9 %
Interest income
456.1 359.0 27.0
Interest expense
-------------------- ------- -------------------- ------ --------------------
598.9 609.9 (1.8 )
Net interest income
15.2 19.4 (21.6 )
Provision for credit losses
-------------------- ------- -------------------- ------ --------------------
583.7 590.5 (1.2 )
Net interest income after provision for credit losses
129.9 (58.0 ) NM
Non-interest income
481.8 347.9 38.5
Non-interest expense
-------------------- ------- -------------------- ------ --------------------
231.8 184.6 25.6
Income before income taxes
54.4 42.4 28.3
Income tax expense
-------------------- ------- -------------------- ------ --------------------
177.4 142.2 24.8
Net income
3.2 3.2 --
Dividends on preferred stock
-------------------- ------- -------------------- ------ --------------------
$ 174.2 $ 139.0 25.3
Net income available to common stockholders
==================== ======= ==================== ====== ====================
(1) See Reconciliation of Non-GAAP Financial Measures. See Reconciliation of Non-GAAP Financial Measures.
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
Common Share Data:
At or For the Three Months Ended March 31,
----------------------------------------------------------------------------------------------------------------------------------
2024 2023 Change %
------------------------------ ------------------------------ ------------------------------
$ 1.60 $ 1.28 25.0 %
Diluted earnings per common share
53.33 47.72 11.8
Book value per common share
47.30 41.56 13.8
Tangible book value per common share, net of tax (1)
Average common shares outstanding (in millions):
108.5 108.2 0.3
Basic
109.0 108.3 0.6
Diluted
Selected Performance Ratios:
0.98 % 0.81 % 21.0 %
Return on average assets (2)
13.4 12.2 9.8
Return on average tangible common equity (1, 2)
3.60 3.79 (5.0 )
Net interest margin (2)
57.3 55.1 4.0
Efficiency ratio, adjusted for deposit costs (1)
81.5 97.6 (16.5 )
HFI loan to deposit ratio
Asset Quality Ratios:
0.08 % 0.05 % 60.0 %
Net charge-offs to average loans outstanding (2)
0.79 0.23 NM
Nonaccrual loans to funded HFI loans
0.53 0.17 NM
Nonaccrual loans and repossessed assets to total assets
0.67 0.66 1.5
Allowance for loan losses to funded HFI loans
Capital Ratios:
Mar 31, 2024 Dec 31, 2023 Mar 31, 2023
------------------------------ ------------------------------ ------------------------------
6.8 % 7.3 % 6.5 %
Tangible common equity (1)
11.0 10.8 9.4
Common Equity Tier 1 (3)
8.5 8.6 7.8
Tier 1 Leverage ratio (3)
11.7 11.5 10.1
Tier 1 Capital (3)
(1) See Reconciliation of Non-GAAP Financial Measures. See Reconciliation of Non-GAAP Financial Measures. (2) Annualized on an actual/actual basis for periods less than 12 months. Annualized on an actual/actual basis for periods less than 12 months. (3) Capital ratios for March 31, 2024 are preliminary. Capital ratios for March 31, 2024 are preliminary.
Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Income Statements
Unaudited
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------------ ------------------------------------------------------
(dollars in millions, except per share data)
Interest income:
$ 871.9 $ 832.7
Loans
144.0 96.1
Investment securities
39.1 40.1
Other
-------------------- -------------- -------------------- -------------------- -------------- --------------------
1,055.0 968.9
Total interest income
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Interest expense:
380.6 231.6
Deposits
9.5 9.3
Qualifying debt
66.0 118.1
Borrowings
-------------------- -------------- -------------------- -------------------- -------------- --------------------
456.1 359.0
Total interest expense
-------------------- -------------- -------------------- -------------------- -------------- --------------------
598.9 609.9
Net interest income
Provision for credit losses 15.2 19.4
-------------------- -------------- -------------------- -------------------- -------------- --------------------
583.7 590.5
Net interest income after provision for credit losses
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Non-interest income:
46.4 41.9
Net loan servicing revenue
45.3 31.4
Net gain on loan origination and sale activities
17.1 1.4
Income from equity investments
9.9 9.5
Service charges and fees
6.5 6.2
Commercial banking related income
0.3 (147.8 )
Fair value gain (loss) adjustments, net
(0.5 ) 3.3
(Loss) gain on recovery from credit guarantees
(0.9 ) (12.5 )
(Loss) gain on sales of investment securities
5.8 8.6
Other
-------------------- -------------- -------------------- -------------------- -------------- --------------------
129.9 (58.0 )
Total non-interest income
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Non-interest expenses:
154.9 148.9
Salaries and employee benefits
137.0 86.9
Deposit costs
58.9 15.7
Insurance
36.0 26.4
Data processing
30.1 23.1
Legal, professional, and directors' fees
17.5 16.5
Occupancy
15.0 13.8
Loan servicing expenses
5.5 5.2
Business development and marketing
4.8 4.4
Loan acquisition and origination expenses
(0.4 ) --
Net (gain) loss on sales and valuations of repossessed and other assets
-- (12.7 )
Gain on extinguishment of debt
22.5 19.7
Other
-------------------- -------------- -------------------- -------------------- -------------- --------------------
481.8 347.9
Total non-interest expense
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Income before income taxes 231.8 184.6
Income tax expense 54.4 42.4
-------------------- -------------- -------------------- -------------------- -------------- --------------------
177.4 142.2
Net income
Dividends on preferred stock 3.2 3.2
-------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 174.2 $ 139.0
Net income available to common stockholders
==================== ============== ==================== ==================== ============== ====================
Earnings per common share:
109.0 108.3
Diluted shares
Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Income Statements
Unaudited
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023
------------------------------------------------------ ----------------------------------------------- ------------------------------------------------------ ----------------------------------------------- ------------------------------------------------------
(in millions, except per share data)
Interest income:
$ 871.9 $ 859.0 $ 860.8 $ 857.2 $ 832.7
Loans
144.0 136.2 122.8 112.4 96.1
Investment securities
39.1 43.8 43.0 31.2 40.1
Other
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
1,055.0 1,039.0 1,026.6 1,000.8 968.9
Total interest income
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
Interest expense:
380.6 343.7 316.2 251.1 231.6
Deposits
9.5 9.6 9.5 9.5 9.3
Qualifying debt
66.0 94.0 113.9 189.9 118.1
Borrowings
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
456.1 447.3 439.6 450.5 359.0
Total interest expense
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
598.9 591.7 587.0 550.3 609.9
Net interest income
Provision for credit losses 15.2 9.3 12.1 21.8 19.4
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
583.7 582.4 574.9 528.5 590.5
Net interest income after provision for credit losses
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
Non-interest income:
46.4 9.1 27.2 24.1 41.9
Net loan servicing revenue
45.3 47.8 52.0 62.3 31.4
Net gain on loan origination and sale activities
17.1 13.1 0.5 0.7 1.4
Income from equity investments
9.9 22.7 23.3 20.8 9.5
Service charges and fees
6.5 5.9 5.6 6.0 6.2
Commercial banking related income
0.3 1.3 17.8 12.7 (147.8 )
Fair value gain (loss) adjustments, net
(0.5 ) (2.7 ) (4.0 ) 1.2 3.3
(Loss) gain on recovery from credit guarantees
(0.9 ) (14.8 ) 0.1 (13.6 ) (12.5 )
(Loss) gain on sales of investment securities
5.8 8.1 6.7 4.8 8.6
Other
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
129.9 90.5 129.2 119.0 (58.0 )
Total non-interest income
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
Non-interest expenses:
154.9 134.6 137.2 145.6 148.9
Salaries and employee benefits
137.0 131.0 127.8 91.0 86.9
Deposit costs
58.9 108.6 33.1 33.0 15.7
Insurance
36.0 33.1 33.9 28.6 26.4
Data processing
30.1 29.4 28.3 26.4 23.1
Legal, professional, and directors' fees
17.5 16.9 16.8 15.4 16.5
Occupancy
15.0 14.7 11.9 18.4 13.8
Loan servicing expenses
5.5 6.7 4.9 5.0 5.2
Business development and marketing
4.8 4.8 5.6 5.6 4.4
Loan acquisition and origination expenses
(0.4 ) 0.3 2.2 0.5 --
Net (gain) loss on sales and valuations of repossessed and other assets
-- (39.3 ) -- (0.7 ) (12.7 )
Gain on extinguishment of debt
22.5 21.1 24.5 18.6 19.7
Other
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
481.8 461.9 426.2 387.4 347.9
Total non-interest expense
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
231.8 211.0 277.9 260.1 184.6
Income before income taxes
54.4 63.1 61.3 44.4 42.4
Income tax expense
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
Net income 177.4 147.9 216.6 215.7 142.2
3.2 3.2 3.2 3.2 3.2
Dividends on preferred stock
-------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- ------- -------------------- -------------------- -------------- --------------------
Net income available to common stockholders $