Earnings Release
Western Alliance Bancorporation Reports Fourth Quarter and Full Year 2022 Financial Results
PHOENIX--(BUSINESS WIRE)--Western Alliance Bancorporation (NYSE:WAL):
FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS
Fourth Quarter Highlights: |
| | | | | | | | | | |
Net income | | Earnings per share | | PPNR1 | | Net interest margin | | Efficiency ratio1 | | Book value per common share |
$293.0 million | | $2.67 | | $367.8 million | | 3.98% | | 46.9% | | $46.47 |
| | | | | $40.251, excluding goodwill and intangibles |
CEO COMMENTARY: |
“Western Alliance’s diversified, national commercial business strategy drove the strong momentum that was sustained throughout the year, closing out the fourth quarter with record revenues, earnings and tangible book value as we thoughtfully deployed liquidity into sound organic growth,” said Kenneth A. Vecchione, President and Chief Executive Officer. “We achieved a record $293.0 million in net income and earnings per share of $2.67 for the quarter, an increase of 15.1% from the prior year, while tangible book value per share rose 6.4% year-over-year to $40.25. Quarterly deposits declined $1.9 billion, primarily driven by short-term seasonal tax and insurance escrow deposit outflows in our Mortgage Warehouse Group. These seasonal factors have already reversed since year end, with quarter-to-date 2023 average total deposit balances up more than $2.4 billion from year end.” “Western Alliance’s full year results are a direct reflection of our collaborative culture and flexible business model that strongly position us to sustain our earnings trajectory into 2023, all while continuing our focus on asset quality. Net charge-offs for the year totaled a modest $1.5 million, with a non-performing assets to total assets ratio of 0.14% at the end of the year. Our growing net interest income during the year drove an increase in earnings as PPNR climbed 25.7% over the prior year to $1.4 billion, with net income of $1.1 billion and earnings per share up 11.9% to $9.70.” |
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 | FULL YEAR |
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FINANCIAL HIGHLIGHTS: |
- Net income of $293.0 million and earnings per share of $2.67, compared to $264.0 million and $2.42, respectively
| - Net income of $1.1 billion and earnings per share of $9.70, up 17.6% and 11.9%, from $899.2 million and $8.67, respectively
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- Net revenue of $701.2 million, an increase of 5.6%, or $37.3 million, compared to an increase in non-interest expenses of 9.0%, or $27.6 million
| - Net revenue of $2.5 billion, an increase of 30.1%, or $587.9 million, compared to an increase in non-interest expenses of 35.9%, or $305.3 million
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- Pre-provision net revenue1 of $367.8 million, up $9.7 million from $358.1 million
| - Pre-provision net revenue1 of $1.4 billion, up $282.6 million from $1.1 billion
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- Effective tax rate of 19.7%, compared to 19.9%
| - Effective tax rate of 19.7%, compared to 19.9%
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FINANCIAL POSITION RESULTS: |
- HFI loans of $51.9 billion, down $339 million, or 0.6%
| - Increase in HFI loans of $10.9 billion, or 27.9%, net of EBO loans with a $1.9 billion balance at December 31, 2022 transferred from HFS to HFI during 2022
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- Total deposits of $53.6 billion, down $1.9 billion, or 3.5%
| - Increase in total deposits of $6.0 billion, or 12.7%
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- Stockholders' equity of $5.4 billion, up $335 million
| - Increase in stockholders' equity of $393 million
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LOANS AND ASSET QUALITY: |
- Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.14%, compared to 0.15%
| - Nonperforming assets to total assets of 0.14%, compared to 0.15%
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- Annualized net loan charge-offs (recoveries) to average loans outstanding of 0.01%, compared to (0.02)%
| - Net loan charge-offs (recoveries) to average loans outstanding of approximately 0.00%, compared to 0.02%
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| KEY PERFORMANCE METRICS: |
- Net interest margin of 3.98%, compared to 3.78%
| - Net interest margin of 3.67%, compared to 3.41%
|
- Return on average assets and on tangible common equity1 of 1.67% and 27.0%, compared to 1.53% and 24.9%, respectively
| - Return on average assets and on tangible common equity1 of 1.62% and 25.4%, compared to 1.83% and 26.2%, respectively
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- Tangible common equity ratio1 of 6.5%, compared to 5.9%
| - Tangible common equity ratio1 of 6.5%, compared to 7.3%
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- CET 1 ratio of 9.3%, compared to 8.7%
| - CET 1 ratio of 9.3%, compared to 9.1%
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- Tangible book value per share1, net of tax, of $40.25, an increase of 8.3% from $37.16
| - Tangible book value per share1, net of tax, of $40.25, an increase of 6.4% from $37.84
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- Efficiency ratio1 of 46.9%, compared to 45.5%
| - Efficiency ratio1 of 44.9%, compared to 42.9%
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1 See reconciliation of Non-GAAP Financial Measures. |
Income Statement
Net interest income was $639.7 million in the fourth quarter 2022, an increase of $37.6 million from $602.1 million in the third quarter 2022, and an increase of $189.1 million, or 42.0%, compared to the fourth quarter 2021. The increase in net interest income from the third quarter 2022 is due to 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 and higher yields on HFI loans, partially offset by higher interest rates on deposits and an increase in other borrowings, drove the increase in net interest income from the fourth quarter 2021.
The Company recorded a provision for credit losses of $3.1 million in the fourth quarter 2022, a decrease of $25.4 million from $28.5 million in the third quarter 2022, and a decrease of $10.1 million from $13.2 million in the fourth quarter 2021. The provision for credit losses during the fourth quarter 2022 is primarily due to heightened economic uncertainty, offset by a decrease in loans.
The Company’s net interest margin in the fourth quarter 2022 was 3.98%, an increase from 3.78% in the third quarter 2022, and an increase from 3.33% in the fourth 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 borrowings. The increase in net interest margin from the fourth quarter 2021 was driven by HFI loan growth plus an increase in rates, partially offset by higher deposits and borrowings coupled with higher rates.
Non-interest income was $61.5 million for the fourth quarter 2022, compared to $61.8 million for the third quarter 2022, and $110.4 million for the fourth quarter 2021. The $0.3 million decrease in non-interest income from the third quarter 2022 was primarily related to fair value loss adjustments from HFI loans transferred to HFS and sold in the fourth quarter 2022 and a revaluation in the third quarter 2022 of the contingent consideration liability related to the Digital Disbursements acquisition that did not recur. These items were partially offset by a $10.9 million increase in net gain on loan origination and sale activities due to gains from hedging activity, partially offset by a reduction in spreads and production volume. Net loan servicing revenue decreased $1.6 million due to a decrease in the value of MSRs, which was partially offset by an increase in servicing revenue. The $48.9 million decrease from the fourth quarter 2021 was driven by a decrease in net gain on loan origination and sale activities of $47.8 million from lower production volume, partially offset by a $19.1 million increase in loan servicing revenue.
Net revenue was $701.2 million for the fourth quarter 2022, an increase of $37.3 million, or 5.6%, compared to $663.9 million for the third quarter 2022, and an increase of $140.2 million, or 25.0%, compared to $561.0 million for the fourth quarter 2021.
Non-interest expense was $333.4 million for the fourth quarter 2022, compared to $305.8 million for the third quarter 2022, and $237.8 million for the fourth quarter 2021. The Company’s efficiency ratio1 was 46.9% for the fourth quarter 2022, compared to 45.5% in the third quarter 2022, and 41.8% for the fourth quarter 2021. Non-interest expense increased from the third quarter 2022 due primarily to increased deposit costs. The increase in non-interest expense from the fourth quarter 2021 is also attributable to increased deposit costs.
Income tax expense was $71.7 million for the fourth quarter 2022, compared to $65.6 million for the third quarter 2022, and $64.0 million for the fourth quarter 2021.
Net income was $293.0 million for the fourth quarter 2022, an increase of $29.0 million from $264.0 million for the third quarter 2022, and an increase of $47.0 million from $246.0 million for the fourth quarter 2021. Earnings per share totaled $2.67 for the fourth quarter 2022, compared to $2.42 for the third quarter 2022, and $2.32 for the fourth 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 fourth quarter 2022, the Company’s PPNR1 was $367.8 million, up $9.7 million from $358.1 million in the third quarter 2022, and up $44.6 million from $323.2 million in the fourth quarter 2021.
The Company had 3,365 full-time equivalent employees and 56 offices at December 31, 2022, compared to 3,368 employees and 60 offices at September 30, 2022, and 3,139 employees and 58 offices at December 31, 2021.
1 See reconciliation of Non-GAAP Financial Measures.
Balance Sheet
HFI loans, net of deferred fees totaled $51.9 billion at December 31, 2022, compared to $52.2 billion at September 30, 2022, and $39.1 billion at December 31, 2021. The decrease in HFI loans of $339 million from the prior quarter was driven by a decrease of $1.6 billion in commercial and industrial loans, partially offset by increases of $651 million in CRE non-owner occupied, $392 million in construction and land development, and $254 million in residential real estate loans. From December 31, 2021, HFI loan growth of $10.9 billion (which excludes transfers of government guaranteed early buyout ("EBO") residential loans from HFS to HFI in 2022 with a balance of $1.9 billion at December 31, 2022), was primarily driven by residential real estate, commercial and industrial, and CRE non-owner occupied, loans which increased $4.8 billion, $2.8 billion, and, $2.4 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 December 31, 2022, the allowance for loan losses to funded HFI loans ratio was 0.60%, compared to 0.58% at September 30, 2022, and 0.65% at December 31, 2021. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.69% at December 31, 2022, compared to 0.68% at September 30, 2022, and 0.74% at December 31, 2021. 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. As of December 31, 2022, September 30, 2022, and December 31, 2021, the Company is protected from first credit losses on reference pools of loans totaling $12.0 billion, $10.8 billion, and $6.4 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 include an allowance of $21.9 million as of December 31, 2022, $19 million as of September 30, 2022, and $7.2 million as of December 31, 2021, related to these pools of loans. The allowance for credit losses to funded HFI loans ratio, adjusted to reduce the HFI loan balance by the amount of loans in covered reference pools, was 0.89% at December 31, 2022, 0.86% at September 30, 2022, and 0.89% at December 31, 2021.
Deposits totaled $53.6 billion at December 31, 2022, a decrease of $1.9 billion from $55.6 billion at September 30, 2022, and an increase of $6.0 billion from $47.6 billion at December 31, 2021. By deposit type, the decrease from the prior quarter is attributable to a decrease of $5.2 billion from non-interest bearing demand deposits, partially offset by increases of $1.9 billion from certificates of deposits, $1.2 billion from interest bearing demand deposits, and $195 million from savings and money market accounts. From December 31, 2021, certificates of deposit, interest-bearing demand deposits, and savings and money market accounts increased by $3.0 billion, $2.6 billion, and $2.1 billion, respectively. These increases were partially offset by a decrease in non-interest bearing demand deposits of $1.7 billion. Non-interest bearing deposits were $19.7 billion at December 31, 2022, compared to $24.9 billion at September 30, 2022, and $21.4 billion at December 31, 2021.
The table below shows the Company's deposit types as a percentage of total deposits:
| | Dec 31, 2022 | | Sep 30, 2022 | | Dec 31, 2021 |
Non-interest bearing | | 36.7 | % | | 44.8 | % | | 44.9 | % |
Savings and money market | | 36.2 | | | 34.6 | | | 36.3 | |
Interest-bearing demand | | 17.7 | | | 15.0 | | | 14.5 | |
Certificates of deposit | | 9.4 | | | 5.6 | | | 4.3 | |
The Company’s ratio of HFI loans to deposits was 96.7% at December 31, 2022, compared to 93.9% at September 30, 2022, and 82.1% at December 31, 2021.
Borrowings were $6.3 billion at December 31, 2022 and September 30, 2022, and $1.5 billion at December 31, 2021. Borrowings remained flat from September 30, 2022 due primarily to the issuance of $93 million of credit linked notes in the fourth quarter 2022 offset by a decrease in short-term borrowings. The increase in borrowings from December 31, 2021 is due to an increase in short-term borrowings of $4.3 billion and issuance of $579 million of credit linked notes, net of issuance costs, during 2022.
Qualifying debt totaled $893 million at December 31, 2022, compared to $889 million at September 30, 2022, and $896 million at December 31, 2021.
Stockholders’ equity was $5.4 billion at December 31, 2022, compared to $5.0 billion at September 30, 2022 and December 31, 2021. The increase in stockholders’ equity quarter over quarter was due to net income and unrealized fair value gains of approximately $77 million on the Company's available for sale securities, which are recorded in other comprehensive (loss) income, net of tax, partially offset by dividends to shareholders. A cash dividend of $0.36 per share was paid to common shareholders on December 2, 2022, totaling $39.2 million, and a cash dividend of $0.27 per depository share was paid to preferred shareholders on December 30, 2022, totaling $3.2 million. The increase in stockholders' equity from December 31, 2021 is primarily a function of net income and sales of common stock under the Company's ATM program, partially offset by dividends to shareholders and unrealized fair value losses on available for sale securities.
At December 31, 2022, tangible common equity, net of tax1, was 6.5% of tangible assets1 and total capital was 12.1% of risk-weighted assets. The Company’s tangible book value per share1 was $40.25 at December 31, 2022, an increase of 8.3% from $37.16, and up 6.4% from $37.84 at December 31, 2021. The increase in tangible book value per share from September 30, 2022 is attributable to net income and fair value marks on the Company's available for sale securities, which are recorded in other comprehensive (loss) income, net of tax.
Total assets decreased 2.1% to $67.7 billion at December 31, 2022, from $69.2 billion at September 30, 2022, and increased 21.0% from $56.0 billion at December 31, 2021. The decrease in total assets from September 30, 2022 and December 31, 2021 was driven by decreases in HFS and HFI loans.
1 See reconciliation of Non-GAAP Financial Measures.
Asset Quality
Provision for credit losses totaled $3.1 million for the fourth quarter 2022, compared to $28.5 million for the third quarter 2022, and $13.2 million for the fourth quarter 2021. Net loan charge-offs (recoveries) in the fourth quarter 2022 were $1.8 million, or 0.01% of average loans (annualized), compared to $(1.9) million, or (0.02)%, in the third quarter 2022, and $1.4 million, or 0.02%, in the fourth quarter 2021.
Nonaccrual loans decreased $5 million to $85 million during the quarter and increased $12 million from December 31, 2021. Loans past due 90 days and still accruing interest were zero (excluding government guaranteed loans of $582 million) at December 31, 2022, compared to zero at September 30, 2022 and December 31, 2021 (excluding government guaranteed loans of $644 million and zero at September 30, 2022 and December 31, 2021, respectively). Loans past due 30-89 days and still accruing interest totaled $70 million (excluding government guaranteed loans of $334 million) at December 31, 2022, an increase from $56 million at September 30, 2022, and an increase from $53 million at December 31, 2021 (excluding government guaranteed loans of $245 million and zero at September 30, 2022 and December 31, 2021, respectively).
Repossessed assets totaled $11 million at December 31, 2022, flat from September 30, 2022, and a $1 million decrease from $12 million at December 31, 2021. Classified assets totaled $393 million at December 31, 2022, an increase of $8 million from $385 million at September 30, 2022, and an increase of $92 million from $301 million at December 31, 2021.
The ratio of classified assets to Tier 1 capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 6.8% at December 31, 2022, compared to 7.0% at September 30, 2022, and 6.4% at December 31, 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 $31.4 billion at December 31, 2022, a decrease of $646 million during the quarter, and an increase of $6.3 billion during the year. Deposits for the Commercial segment totaled $29.5 billion at December 31, 2022, a decrease of $512 million during the quarter, and a decrease of $973 million during the year.
Pre-tax income for the Commercial segment was $320.5 million for the three months ended December 31, 2022, an increase of $22.3 million from the three months ended September 30, 2022, and an increase of $82.2 million from the three months ended December 31, 2021. For the year ended December 31, 2022, the Commercial segment reported total pre-tax income of $1.1 billion, an increase of $233.8 million compared to the year ended December 31, 2021.
The Consumer Related segment reported an HFI loan balance of $20.4 billion at December 31, 2022, an increase of $307 million during the quarter, and an increase of $6.5 billion during the year. The Consumer Related segment also has loans held for sale of $1.2 billion at December 31, 2022, a decrease of $1.0 billion during the quarter, and a decrease of $4.5 billion during the year. Deposits for the Consumer Related segment totaled $18.5 billion, a decrease of $2.5 billion during the quarter, and an increase of $3.1 billion during the year.
Pre-tax income for the Consumer Related segment was $69.8 million for the three months ended December 31, 2022, a decrease of $23.4 million from the three months ended September 30, 2022, and a decrease of $65.2 million from the three months ended December 31, 2021. Pre-tax income for the Consumer Related segment for the year ended December 31, 2022 totaled $450.1 million, a decrease of $46.0 million compared to the year ended December 31, 2021.
Conference Call and Webcast
Western Alliance Bancorporation will host a conference call and live webcast to discuss its fourth quarter 2022 financial results at 12:00 p.m. ET on Wednesday, January 25, 2023. Participants may access the call by dialing 1-844-200-6205 and using access code 669213 or via live audio webcast using the website link https://events.q4inc.com/attendee/484930167. The webcast is also available via the Company’s website at www.westernalliancebancorporation.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 3:00 p.m. ET January 25th through 11:00 p.m. ET February 25th by dialing 1-866-813-9403, using access code 597938.
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 $65 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, business clients benefit from a full spectrum of tailored banking solutions and outstanding service delivered by industry experts who put customers first. Major accolades include #2 best-performing of the 50 largest public U.S. banks in the S&P Global Market Intelligence listing for 2021, and #1 Best Emerging Regional Bank for 2022 by Bank Director. Serving clients across the country wherever business happens, Western Alliance Bank operates individual, full-service banking and financial brands with offices in key markets nationwide. For more information, visit westernalliancebank.com.
Western Alliance Bancorporation and Subsidiaries |
Summary Consolidated Financial Data |
Unaudited |
| | | | | | | | | | | | |
Selected Balance Sheet Data: | | | | | | | | | | | | |
| | | | | | | | As of December 31, |
| | | | | | | | 2022 | | 2021 | | Change % |
| | | | | | | | (in millions) | | |
Total assets | | | | | | | | $ | 67,734 | | $ | 55,983 | | | 21.0 | % |
Loans held for sale | | | | | | | | | 1,184 | | | 5,635 | | | (79.0 | ) |
HFI loans, net of deferred fees | | | | | | | | | 51,862 | | | 39,075 | | | 32.7 | |
Investment securities | | | | | | | | | 8,760 | | | 7,541 | | | 16.2 | |
Total deposits | | | | | | | | | 53,644 | | | 47,612 | | | 12.7 | |
Borrowings | | | | | | | | | 6,299 | | | 1,502 | | | NM | |
Qualifying debt | | | | | | | | | 893 | | | 896 | | | (0.3 | ) |
Stockholders' equity | | | | | | | | | 5,356 | | | 4,963 | | | 7.9 | |
Tangible common equity, net of tax (1) | | | | | | | | | 4,383 | | | 4,035 | | | 8.6 | |
| Common equity Tier 1 capital | | | | | | | | | 5,073 | | | 4,068 | | | 24.7 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Selected Income Statement Data: | | | | | | | | | | | | |
| | For the Three Months Ended December 31, | | For the Year Ended December 31, |
| | 2022 | | 2021 | | Change % | | 2022 | | 2021 | | Change % |
| | (in millions, except per share data) | | | | (in millions, except per share data) | | |
Interest income | | $ | 888.3 | | $ | 483.3 | | 83.8 | % | | $ | 2,691.8 | | $ | 1,658.7 | | | 62.3 | % |
Interest expense | | | 248.6 | | | 32.7 | | NM | | | | 475.5 | | | 109.9 | | | NM | |
Net interest income | | | 639.7 | | | 450.6 | | 42.0 | | | | 2,216.3 | | | 1,548.8 | | | 43.1 | |
Provision for (recovery of) credit losses | | | 3.1 | | | 13.2 | | (76.5 | ) | | | 68.1 | | | (21.4 | ) | | NM | |
Net interest income after provision for credit losses | | | 636.6 | | | 437.4 | | 45.5 | | | | 2,148.2 | | | 1,570.2 | | | 36.8 | |
Non-interest income | | | 61.5 | | | 110.4 | | (44.3 | ) | | | 324.6 | | | 404.2 | | | (19.7 | ) |
Non-interest expense | | | 333.4 | | | 237.8 | | 40.2 | | | | 1,156.7 | | | 851.4 | | | 35.9 | |
Income before income taxes | | | 364.7 | | | 310.0 | | 17.6 | | | | 1,316.1 | | | 1,123.0 | | | 17.2 | |
Income tax expense | | | 71.7 | | | 64.0 | | 12.0 | | | | 258.8 | | | 223.8 | | | 15.6 | |
Net income | | | 293.0 | | | 246.0 | | 19.1 | | | | 1,057.3 | | | 899.2 | | | 17.6 | |
Dividends on preferred stock | | | 3.2 | | | 3.5 | | (8.6 | ) | | | 12.8 | | | 3.5 | | | NM | |
Net income available to common stockholders | | $ | 289.8 | | $ | 242.5 | | 19.5 | | | $ | 1,044.5 | | $ | 895.7 | | | 16.6 | |
Diluted earnings per common share | | $ | 2.67 | | $ | 2.32 | | 15.1 | | | $ | 9.70 | | $ | 8.67 | | | 11.9 | |
(1) | | See Reconciliation of Non-GAAP Financial Measures. |
NM | | Changes +/- 100% are not meaningful. |
| Western Alliance Bancorporation and Subsidiaries |
Summary Consolidated Financial Data |
Unaudited | | | | | | | | | | | | |
| | | | | | | | | | | | |
Common Share Data: | | | | | | | | | | | | |
| | At or For the Three Months Ended December 31, | | For the Year Ended December 31, |
| | 2022 | | 2021 | | Change % | | 2022 | | 2021 | | Change % |
Diluted earnings per common share | | $ | 2.67 | | $ | 2.32 | | 15.1 | % | | $ | 9.70 | | $ | 8.67 | | 11.9 | % |
Book value per common share | | | 46.47 | | | 43.78 | | 6.1 | | | | | | | |
Tangible book value per common share, net of tax (1) | | | 40.25 | | | 37.84 | | 6.4 | | | | | | | |
Average common shares outstanding (in millions): | | | | | | | | | | | | |
Basic | | | 108.0 | | | 103.9 | | 4.0 | | | | 107.2 | | | 102.7 | | 4.4 | |
Diluted | | | 108.4 | | | 104.5 | | 3.7 | | | | 107.6 | | | 103.3 | | 4.2 | |
Common shares outstanding | | | 108.9 | | | 106.6 | | 2.1 | | | | | | | |
Selected Performance Ratios: | | | | | | | | | | | | |
Return on average assets (2) | | 1.67 | % | | 1.69 | % | | (1.2 | ) % | | 1.62 | % | | 1.83 | % | | (11.5 | ) % |
Return on average tangible common equity (1, 2) | | 27.0 | | | 25.8 | | | 4.7 | | | 25.4 | | | 26.2 | | | (3.1 | ) |
Return on average tangible common equity, excluding AOCI (1, 2) | | 23.1 | | | 26.0 | | | (11.2 | ) | | 23.1 | | | 26.6 | | | (13.2 | ) |
Net interest margin (2) | | 3.98 | | | 3.33 | | | 19.5 | | | 3.67 | | | 3.41 | | | 7.6 | |
Efficiency ratio - tax equivalent basis (1) | | 46.9 | | | 41.8 | | | 12.2 | | | 44.9 | | | 42.9 | | | 4.7 | |
Loan to deposit ratio | | 96.7 | | | 82.1 | | | 17.8 | | | | | | | |
| | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | |
Net charge-offs (recoveries) to average loans outstanding (2) | | 0.01 | % | | 0.02 | % | | (50.0 | ) % | | 0.00 | % | | 0.02 | % | | NM | |
Nonaccrual loans to funded HFI loans | | 0.16 | | | 0.19 | | | (15.8 | ) | | | | | | |
Nonaccrual loans and repossessed assets to total assets | | 0.14 | | | 0.15 | | | (6.7 | ) | | | | | | |
Allowance for loan losses to funded HFI loans | | 0.60 | | | 0.65 | | | (7.7 | ) | | | | | | |
Allowance for loan losses to nonaccrual HFI loans | | 364 | | | 348 | | | 4.6 | | | | | | | |
Capital Ratios: | | | | | | |
| | Dec 31, 2022 | | Sep 30, 2022 | | Dec 31, 2021 |
Tangible common equity (1) | | 6.5 | % | | 5.9 | % | | 7.3 | % |
Common Equity Tier 1 (3) | | 9.3 | | | 8.7 | | | 9.1 | |
Tier 1 Leverage ratio (3) | | 7.8 | | | 7.5 | | | 7.8 | |
Tier 1 Capital (3) | | 10.0 | | | 9.3 | | | 9.9 | |
Total Capital (3) | | 12.1 | | | 11.4 | | | 12.3 | |
(1) | | See Reconciliation of Non-GAAP Financial Measures. |
(2) | | Annualized on an actual/actual basis for periods less than 12 months. |
(3) | | Capital ratios for December 31, 2022 are preliminary. |
NM | | Changes +/- 100% are not meaningful. |
| Western Alliance Bancorporation and Subsidiaries |
Condensed Consolidated Income Statements |
Unaudited | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | (dollars in millions, except per share data) | | | | |
Interest income: | | | | | | | | |
Loans | | $ | 785.1 | | | $ | 438.6 | | | $ | 2,393.4 | | | $ | 1,488.8 | |
Investment securities | | | 89.4 | | | | 43.7 | | | | 272.6 | | | | 164.7 | |
Other | | | 13.8 | | | | 1.0 | | | | 25.8 | | | | 5.2 | |
Total interest income | | | 888.3 | | | | 483.3 | | | | 2,691.8 | | | | 1,658.7 | |
Interest expense: | | | | | | | | |
Deposits | | | 157.6 | | | | 12.8 | | | | 276.4 | | | | 47.5 | |
Qualifying debt | | | 9.1 | | | | 9.2 | | | | 35.0 | | | | 33.1 | |
Borrowings | | | 81.9 | | | | 10.7 | | | | 164.1 | | | | 29.3 | |
Total interest expense | | | 248.6 | | | | 32.7 | | | | 475.5 | | | | 109.9 | |
Net interest income | | | 639.7 | | | | 450.6 | | | | 2,216.3 | | | | 1,548.8 | |
Provision for (recovery of) credit losses | | | 3.1 | | | | 13.2 | | | | 68.1 | | | | (21.4 | ) |
Net interest income after provision for credit losses | | | 636.6 | | | | 437.4 | | | | 2,148.2 | | | | 1,570.2 | |
Non-interest income: | | | | | | | | |
Net gain on loan origination and sale activities | | | 25.4 | | | | 73.2 | | | | 104.0 | | | | 326.2 | |
Net loan servicing revenue (expense) | | | 21.4 | | | | 2.3 | | | | 130.9 | | | | (16.3 | ) |
Service charges and fees | | | 5.9 | | | | 7.1 | | | | 27.0 | | | | 28.3 | |
Commercial banking related income | | | 5.5 | | | | 4.9 | | | | 21.5 | | | | 17.4 | |
Income from equity investments | | | 4.2 | | | | 5.2 | | | | 17.8 | | | | 22.1 | |
Gain on recovery from credit guarantees | | | 3.0 | | | | 7.2 | | | | 14.7 | | | | 7.2 | |
Gain on sales of investment securities | | | 0.1 | | | | 8.3 | | | | 6.8 | | | | 8.3 | |
Fair value loss adjustments on assets measured at fair value, net | | | (9.2 | ) | | | (0.8 | ) | | | (28.6 | ) | | | (1.3 | ) |
Other | | | 5.2 | | | | 3.0 | | | | 30.5 | | | | 12.3 | |
Total non-interest income | | | 61.5 | | | | 110.4 | | | | 324.6 | | | | 404.2 | |
Non-interest expenses: | | | | | | | | |
Salaries and employee benefits | | | 125.7 | | | | 120.6 | | | | 539.5 | | | | 466.7 | |
Deposit costs | | | 82.2 | | | | 9.1 | | | | 165.8 | | | | 29.8 | |
Legal, professional, and directors' fees | | | 26.0 | | | | 20.8 | | | | 99.9 | | | | 58.6 | |
Data processing | | | 23.9 | | | | 17.9 | | | | 83.0 | | | | 58.2 | |
Occupancy | | | 15.8 | | | | 12.4 | | | | 55.5 | | | | 43.8 | |
Loan servicing expenses | | | 14.8 | | | | 15.6 | | | | 55.5 | | | | 53.5 | |
Insurance | | | 8.9 | | | | 7.1 | | | | 31.1 | | | | 23.0 | |
Business development and marketing | | | 7.3 | | | | 6.1 | | | | 22.1 | | | | 13.5 | |
Loan acquisition and origination expenses | | | 4.4 | | | | 8.6 | | | | 23.1 | | | | 28.8 | |
Loss on extinguishment of debt | | | — | | | | 5.9 | | | | — | | | | 5.9 | |
Net gain on sales and valuations of repossessed and other assets | | | (0.3 | ) | | | (0.4 | ) | | | (0.7 | ) | | | (3.5 | ) |
Acquisition and restructure expenses (recoveries) | | | — | | | | (3.2 | ) | | | 0.4 | | | | 15.3 | |
Other | | | 24.7 | | | | 17.3 | | | | 81.5 | | | | 57.8 | |
Total non-interest expense | | | 333.4 | | | | 237.8 | | | | 1,156.7 | | | | 851.4 | |
Income before income taxes | | | 364.7 | | | | 310.0 | | | | 1,316.1 | | | | 1,123.0 | |
Income tax expense | | | 71.7 | | | | 64.0 | | | | 258.8 | | | | 223.8 | |
Net income | | | 293.0 | | | | 246.0 | | | | 1,057.3 | | | | 899.2 | |
Dividends on preferred stock | | | 3.2 | | | | 3.5 | | | | 12.8 | | | | 3.5 | |
Net income available to common stockholders | | $ | 289.8 | | | $ | 242.5 | | | $ | 1,044.5 | | | $ | 895.7 | |
| | | | | | | | |
Earnings per common share: | | | | | | | | |
Diluted shares | | | 108.4 | | | | 104.5 | | | | 107.6 | | | | 103.3 | |
Diluted earnings per share | | $ | 2.67 | | | $ | 2.32 | | | $ | 9.70 | | | $ | 8.67 | |
Western Alliance Bancorporation and Subsidiaries |
Five Quarter Condensed Consolidated Income Statements |
Unaudited |
| | Three Months Ended |
| | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | Dec 31, 2021 |
| | (in millions, except per share data) |
Interest income: | | | | | | | | | | |
Loans | | $ | 785.1 | | | $ | 657.0 | | | $ | 516.6 | | | $ | 434.7 | | | $ | 438.6 | |
Investment securities | | | 89.4 | | | | 75.9 | | | | 59.3 | | | | 48.0 | | | | 43.7 | |
Other | | | 13.8 | | | | 6.5 | | | | 3.7 | | | | 1.8 | | | | 1.0 | |
Total interest income | | | 888.3 | | | | 739.4 | | | | 579.6 | | | | 484.5 | | | | 483.3 | |
Interest expense: | | | | | | | | | | |
Deposits | | | 157.6 | | | | 77.6 | | | | 27.1 | | | | 14.1 | | | | 12.8 | |
Qualifying debt | | | 9.1 | | | | 8.9 | | | | 8.6 | | | | 8.4 | | | | 9.2 | |
Borrowings | | | 81.9 | | | | 50.8 | | | | 18.9 | | | | 12.5 | | | | 10.7 | |
Total interest expense | | | 248.6 | | | | 137.3 | | | | 54.6 | | | | 35.0 | | | | 32.7 | |
Net interest income | | | 639.7 | | | | 602.1 | | | | 525.0 | | | | 449.5 | | | | 450.6 | |
Provision for credit losses | | | 3.1 | | | | 28.5 | | | | 27.5 | | | | 9.0 | | | | 13.2 | |
Net interest income after provision for credit losses | | | 636.6 | | | | 573.6 | | | | 497.5 | | | | 440.5 | | | | 437.4 | |
Non-interest income: | | | | | | | | | | |
Net gain on loan origination and sale activities | | | 25.4 | | | | 14.5 | | | | 27.2 | | | | 36.9 | | | | 73.2 | |
Net loan servicing revenue | | | 21.4 | | | | 23.0 | | | | 45.4 | | | | 41.1 | | | | 2.3 | |
Service charges and fees | | | 5.9 | | | | 6.5 | | | | 7.6 | | | | 7.0 | | | | 7.1 | |
Commercial banking related income | | | 5.5 | | | | 5.1 | | | | 5.8 | | | | 5.1 | | | | 4.9 | |
Income from equity investments | | | 4.2 | | | | 4.3 | | | | 5.2 | | | | 4.1 | | | | 5.2 | |
Gain on recovery from credit guarantees | | | 3.0 | | | | 0.4 | | | | 9.0 | | | | 2.3 | | | | 7.2 | |
Gain (loss) on sales of investment securities | | | 0.1 | | | | — | | | | (0.2 | ) | | | 6.9 | | | | 8.3 | |
Fair value loss adjustments on assets measured at fair value, net | | | (9.2 | ) | | | (2.8 | ) | | | (10.0 | ) | | | (6.6 | ) | | | (0.8 | ) |
Other | | | 5.2 | | | | 10.8 | | | | 5.0 | | | | 9.5 | | | | 3.0 | |
Total non-interest income | | | 61.5 | | | | 61.8 | | | | 95.0 | | | | 106.3 | | | | 110.4 | |
Non-interest expenses: | | | | | | | | | | |
Salaries and employee benefits | | | 125.7 | | | | 136.5 | | | | 139.0 | | | | 138.3 | | | | 120.6 | |
Deposit costs | | | 82.2 | | | | 56.2 | | | | 18.1 | | | | 9.3 | | | | 9.1 | |
Legal, professional, and directors' fees | | | 26.0 | | | | 24.8 | | | | 25.1 | | | | 24.0 | | | | 20.8 | |
Data processing | | | 23.9 | | | | 21.8 | | | | 19.7 | | | | 17.6 | | | | 17.9 | |
Occupancy | | | 15.8 | | | | 13.9 | | | | 13.0 | | | | 12.8 | | | | 12.4 | |
Loan servicing expenses | | | 14.8 | | | | 15.2 | | | | 14.7 | | | | 10.8 | | | | 15.6 | |
Insurance | | | 8.9 | | | | 8.1 | | | | 6.9 | | | | 7.2 | | | | 7.1 | |
Business development and marketing | | | 7.3 | | | | 5.0 | | | | 5.4 | | | | 4.4 | | | | 6.1 | |
Loan acquisition and origination expenses | | | 4.4 | | | | 5.8 | | | | 6.4 | | | | 6.5 | | | | 8.6 | |
Net (gain) loss on sales and valuations of repossessed and other assets | | | (0.3 | ) | | | (0.2 | ) | | | (0.3 | ) | | | 0.1 | | | | (0.4 | ) |
Loss on extinguishment of debt | | | — | | | | — | | | | — | | | | — | | | | 5.9 | |
Acquisition and restructure expenses (recoveries) | | | — | | | | — | | | | — | | | | 0.4 | | | | (3.2 | ) |
Other | | | 24.7 | | | | 18.7 | | | | 20.9 | | | | 17.2 | | | | 17.3 | |
Total non-interest expense | | | 333.4 | | | | 305.8 | | | | 268.9 | | | | 248.6 | | | | 237.8 | |
Income before income taxes | | | 364.7 | | | | 329.6 | | | | 323.6 | | | | 298.2 | | | | 310.0 | |
Income tax expense | | | 71.7 | | | | 65.6 | | | | 63.4 | | | | 58.1 | | | | 64.0 | |
Net income | | | 293.0 | | | | 264.0 | | | | 260.2 | | | | 240.1 | | | | 246.0 | |
Dividends on preferred stock | | | 3.2 | | | | 3.2 | | | | 3.2 | | | | 3.2 | | | | 3.5 | |
Net income available to common stockholders | | $ | 289.8 | | | $ | 260.8 | | | $ | 257.0 | | | $ | 236.9 | | | $ | 242.5 | |
| | | | | | | | | | |
Earnings per common share: | | | | | | | | | | |
Diluted shares | | | 108.4 | | | | 107.9 | | | | 107.7 | | | | 106.6 | | | | 104.5 | |
Diluted earnings per share | | $ | 2.67 | | | $ | 2.42 | | | $ | 2.39 | | | $ | 2.22 | | | $ | 2.32 | |
Western Alliance Bancorporation and Subsidiaries |
Five Quarter Condensed Consolidated Balance Sheets |
Unaudited |
| | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | Dec 31, 2021 |
| | (in millions) |
Assets: | | | | | | | | | | |
Cash and due from banks | | $ | 1,043 | | | $ | 1,610 | | | $ | 1,886 | | | $ | 2,602 | | | $ | 516 | |
Investment securities | | | 8,760 | | | | 8,603 | | | | 8,802 | | | | 8,277 | | | | 7,541 | |
Loans held for sale | | | 1,184 | | | | 2,204 | | | | 2,803 | | | | 4,762 | | | | 5,635 | |
Loans held for investment: | | | | | | | | | | |
Commercial and industrial | | | 20,710 | | | | 22,318 | | | | 20,754 | | | | 17,862 | | | | 18,297 | |
Commercial real estate - non-owner occupied | | | 9,319 | | | | 8,668 | | | | 7,775 | | | | 6,849 | | | | 6,526 | |
Commercial real estate - owner occupied | | | 1,818 | | | | 1,848 | | | | 1,848 | | | | 1,805 | | | | 1,898 | |
Construction and land development | | | 4,013 | | | | 3,621 | | | | 3,231 | | | | 3,278 | | | | 3,023 | |
Residential real estate | | | 15,928 | | | | 15,674 | | | | 14,908 | | | | 11,270 | | | | 9,282 | |
Consumer | | | 74 | | | | 72 | | | | 56 | | | | 55 | | | | 49 | |
Loans HFI, net of deferred fees | | | 51,862 | | | | 52,201 | | | | 48,572 | | | | 41,119 | | | | 39,075 | |
Allowance for loan losses | | | (310 | ) | | | (304 | ) | | | (273 | ) | | | (258 | ) | | | (252 | ) |
Loans HFI, net of deferred fees and allowance | | | 51,552 | | | | 51,897 | | | | 48,299 | | | | 40,861 | | | | 38,823 | |
Mortgage servicing rights | | | 1,148 | | | | 1,044 | | | | 826 | | | | 950 | | | | 698 | |
Premises and equipment, net | | | 276 | | | | 237 | | | | 210 | | | | 196 | | | | 182 | |
Operating lease right-of-use asset | | | 163 | | | | 131 | | | | 136 | | | | 142 | | | | 133 | |
Other assets acquired through foreclosure, net | | | 11 | | | | 11 | | | | 12 | | | | 12 | | | | 12 | |
Bank owned life insurance | | | 182 | | | | 181 | | | | 180 | | | | 179 | | | | 180 | |
Goodwill and other intangibles, net | | | 680 | | | | 682 | | | | 695 | | | | 698 | | | | 635 | |
Other assets | | | 2,735 | | | | 2,565 | | | | 2,206 | | | | 1,897 | | | | 1,628 | |
Total assets | | $ | 67,734 | | | $ | 69,165 | | | $ | 66,055 | | | $ | 60,576 | | | $ | 55,983 | |
Liabilities and Stockholders' Equity: | | | | | | | | | | |
Liabilities: | | | | | | | | | | |
Deposits | | | | | | | | | | |
Non-interest bearing demand deposits | | $ | 19,691 | | | $ | 24,926 | | | $ | 23,721 | | | $ | 23,520 | | | $ | 21,353 | |
Interest bearing: | | | | | | | | | | |
Demand | | | 9,507 | | | | 8,350 | | | | 8,387 | | | | 8,268 | | | | 6,924 | |
Savings and money market | | | 19,397 | | | | 19,202 | | | | 19,026 | | | | 18,553 | | | | 17,279 | |
Certificates of deposit | | | 5,049 | | | | 3,111 | | | | 2,578 | | | | 1,818 | | | | 2,056 | |
Total deposits | | | 53,644 | | | | 55,589 | | | | 53,712 | | | | 52,159 | | | | 47,612 | |
Borrowings | | | 6,299 | | | | 6,319 | | | | 5,210 | | | | 833 | | | | 1,502 | |
Qualifying debt | | | 893 | | | | 889 | | | | 891 | | | | 893 | | | | 896 | |
Operating lease liability | | | 185 | | | | 149 | | | | 151 | | | | 155 | | | | 143 | |
Accrued interest payable and other liabilities | | | 1,357 | | | | 1,198 | | | | 1,132 | | | | 1,524 | | | | 867 | |
Total liabilities | | | 62,378 | | | | 64,144 | | | | 61,096 | | | | 55,564 | | | | 51,020 | |
Stockholders' Equity: | | | | | | | | | | |
Preferred stock | | | 295 | | | | 295 | | | | 295 | | | | 295 | | | | 295 | |
Common stock and additional paid-in capital | | | 2,058 | | | | 2,049 | | | | 1,990 | | | | 1,979 | | | | 1,879 | |
Retained earnings | | | 3,664 | | | | 3,413 | | | | 3,192 | | | | 2,973 | | | | 2,773 | |
Accumulated other comprehensive (loss) income | | | (661 | ) | | | (736 | ) | | | (518 | ) | | | (235 | ) | | | 16 | |
Total stockholders' equity | | | 5,356 | | | | 5,021 | | | | 4,959 | | | | 5,012 | | | | 4,963 | |
Total liabilities and stockholders' equity | | $ | 67,734 | | | $ | 69,165 | | | $ | 66,055 | | | $ | 60,576 | | | $ | 55,983 | |
Western Alliance Bancorporation and Subsidiaries |
Changes in the Allowance For Credit Losses on Loans |
Unaudited |
| | Three Months Ended |
| | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | Dec 31, 2021 |
| | (in millions) |
Allowance for loan losses | | | | | | | | | | |
Balance, beginning of period | | $ | 304.1 | | | $ | 273.2 | | | $ | 257.6 | | | $ | 252.5 | | | $ | 246.9 | |
Provision for credit losses (1) | | | 7.4 | | | | 29.0 | | | | 17.0 | | | | 5.3 | | | | 7.0 | |
Recoveries of loans previously charged-off: | | | | | | | | | | |
Commercial and industrial | | | 0.3 | | | | 3.8 | | | | 0.8 | | | | 2.4 | | | | 1.8 | |
Commercial real estate - non-owner occupied | | | — | | | | 0.1 | | | | — | | | | — | | | | 0.3 | |
Commercial real estate - owner occupied | | | 0.1 | | | | — | | | | 0.1 | | | | — | | | | — | |
Construction and land development | | | — | | | | 0.1 | | | | — | | | | — | | | | — | |
Residential real estate | | | — | | | | — | | | | 0.1 | | | | — | | | | 0.4 | |
Consumer | | | — | | | | — | | | | — | | | | — | | | | — | |
Total recoveries | | | 0.4 | | | | 4.0 | | | | 1.0 | | | | 2.4 | | | | 2.5 | |
Loans charged-off: | | | | | | | | | | |
Commercial and industrial | | | 1.1 | | | | 2.1 | | | | 2.4 | | | | 2.6 | | | | 3.8 | |
Commercial real estate - non-owner occupied | | | — | | | | — | | | | — | | | | — | | | | — | |
Commercial real estate - owner occupied | | | 0.5 | | | | — | | | | — | | | | — | | | | — | |
Construction and land development | | | 0.6 | | | | — | | | | — | | | | — | | | | — | |
Residential real estate | | | — | | | | — | | | | — | | | | — | | | | 0.1 | |
Consumer | | | — | | | | — | | | | — | | | | — | | | | — | |
Total loans charged-off | | | 2.2 | | | | 2.1 | | | | 2.4 | | | | 2.6 | | | | 3.9 | |
Net loan charge-offs (recoveries) | | | 1.8 | | | | (1.9 | ) | | | 1.4 | | | | 0.2 | | | | 1.4 | |
Balance, end of period | | $ | 309.7 | | | $ | 304.1 | | | $ | 273.2 | | | $ | 257.6 | | | $ | 252.5 | |
| | | | | | | | | | |
Allowance for unfunded loan commitments | | | | | | | | | | |
Balance, beginning of period | | $ | 52.1 | | | $ | 53.8 | | | $ | 43.3 | | | $ | 37.6 | | | $ | 32.1 | |
(Recovery of) provision for credit losses (1) | | | (5.1 | ) | | | (1.7 | ) | | | 10.5 | | | | 5.7 | | | | 5.5 | |
Balance, end of period (2) | | $ | 47.0 | | | $ | 52.1 | | | $ | 53.8 | | | $ | 43.3 | | | $ | 37.6 | |
| | | | | | | | | | |
Components of the allowance for credit losses on loans | | | | | | | | | | |
Allowance for loan losses | | $ | 309.7 | | | $ | 304.1 | | | $ | 273.2 | | | $ | 257.6 | | | $ | 252.5 | |
Allowance for unfunded loan commitments | | | 47.0 | | | | 52.1 | | | | 53.8 | | | | 43.3 | | | | 37.6 | |
Total allowance for credit losses on loans | | $ | 356.7 | | | $ | 356.2 | | | $ | 327.0 | | | $ | 300.9 | | | $ | 290.1 | |
| | | | | | | | | | |
Net charge-offs (recoveries) to average loans - annualized | | | 0.01 | % | | | (0.02 | ) % | | | 0.01 | % | | | 0.00 | % | | | 0.02 | % |
| | | | | | | | | | |
Allowance ratios | | | | | | | | | | |
Allowance for loan losses to funded HFI loans (3) | | | 0.60 | % | | | 0.58 | % | | | 0.56 | % | | | 0.63 | % | | | 0.65 | % |
Allowance for credit losses to funded HFI loans (3) | | | 0.69 | | | | 0.68 | | | | 0.67 | | | | 0.73 | | | | 0.74 | |
Allowance for loan losses to nonaccrual HFI loans | | | 364 | | | | 338 | | | | 321 | | | | 283 | | | | 346 | |
Allowance for credit losses to nonaccrual HFI loans | | | 420 | | | | 396 | | | | 385 | | | | 331 | | | | 397 | |
(1) | | The above tables reflect the provision for credit losses on funded and unfunded loans. There was a $0.8 million provision for credit losses on investment securities for the three months ended December 31, 2022. The allowance for credit losses on investment securities totaled $5.2 million as of December 31, 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 $21.9 million as of December 31, 2022 related to a $12.0 billion pool of loans covered under five separate credit linked note transactions. |
Western Alliance Bancorporation and Subsidiaries |
Asset Quality Metrics |
Unaudited |
| | Three Months Ended |
| | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | Dec 31, 2021 |
| | (in millions) |
Nonaccrual loans and repossessed assets | | | | | | | | | | |
Nonaccrual loans | | $ | 85 | | | $ | 90 | | | $ | 85 | | | $ | 91 | | | $ | 73 | |
Nonaccrual loans to funded HFI loans | | | 0.16 | % | | | 0.17 | % | | | 0.17 | % | | | 0.22 | % | | | 0.19 | % |
Repossessed assets | | $ | 11 | | | $ | 11 | | | $ | 12 | | | $ | 12 | | | $ | 12 | |
Nonaccrual loans and repossessed assets to total assets | | | 0.14 | % | | | 0.15 | % | | | 0.15 | % | | | 0.17 | % | | | 0.15 | % |
| | | | | | | | | | |
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) | | $ | 70 | | | $ | 56 | | | $ | 117 | | | $ | 58 | | | $ | 53 | |
Loans past due 30 to 89 days, still accruing to funded HFI loans | | | 0.13 | % | | | 0.11 | % | | | 0.24 | % | | | 0.14 | % | | | 0.13 | % |
| | | | | | | | | | |
Other credit quality metrics | | | | | | | | | | |
Special mention loans | | $ | 351 | | | $ | 312 | | | $ | 317 | | | $ | 350 | | | $ | 331 | |
Special mention loans to funded HFI loans | | | 0.68 | % | | | 0.60 | % | | | 0.65 | % | | | 0.85 | % | | | 0.85 | % |
| | | | | | | | | | |
Classified loans on accrual | | $ | 280 | | | $ | 268 | | | $ | 232 | | | $ | 253 | | | $ | 216 | |
Classified loans on accrual to funded HFI loans | | | 0.54 | % | | | 0.51 | % | | | 0.48 | % | | | 0.61 | % | | | 0.55 | % |
Classified assets | | $ | 393 | | | $ | 385 | | | $ | 346 | | | $ | 365 | | | $ | 301 | |
Classified assets to total assets | | | 0.58 | % | | | 0.56 | % | | | 0.52 | % | | | 0.60 | % | | | 0.54 | % |
(1) | | Excludes government guaranteed residential mortgage loans of $582 million, $644 million, and $827 million as of December 31, 2022, September 30, 2022, and June 30, 2022, respectively. |
(2) | | Excludes government guaranteed residential mortgage loans of $334 million, $245 million, and $202 million as of December 31, 2022, September 30, 2022, and June 30, 2022, respectively. |
Western Alliance Bancorporation and Subsidiaries |
Analysis of Average Balances, Yields and Rates |
Unaudited |
| | Three Months Ended |
| | December 31, 2022 | | September 30, 2022 |
| | Average Balance | | Interest | | Average Yield / Cost | | Average Balance | | Interest | | Average Yield / Cost |
| | ($ in millions) | | | | ($ in millions) | | |
Interest earning assets | | | | | | | | | | | | |
Loans held for sale | | $ | 2,659 | | | $ | 37.8 | | 5.63 | % | | $ | 3,993 | | | $ | 49.0 | | 4.87 | % |
Loans held for investment: | | | | | | | | | | | | |
Commercial and industrial | | | 21,654 | | | | 349.3 | | 6.45 | | | | 21,551 | | | | 282.1 | | 5.25 | |
CRE - non-owner occupied | | | 9,077 | | | | 148.8 | | 6.51 | | | | 8,128 | | | | 111.4 | | 5.44 | |
CRE - owner occupied | | | 1,830 | | | | 24.4 | | 5.39 | | | | 1,839 | | | | 23.3 | | 5.12 | |
Construction and land development | | | 3,798 | | | | 80.2 | | 8.38 | | | | 3,471 | | | | 59.5 | | 6.80 | |
Residential real estate | | | 15,803 | | | | 143.5 | | 3.60 | | | | 15,125 | | | | 130.9 | | 3.43 | |
Consumer | | | 71 | | | | 1.1 | | 6.26 | | | | 63 | | | | 0.8 | | 5.32 | |
Total HFI loans (1), (2), (3) | | | 52,233 | | | | 747.3 | | 5.70 | | | | 50,177 | | | | 608.0 | | 4.84 | |
Securities: | | | | | | | | | | | | |
Securities - taxable | | | 6,397 | | | | 68.4 | | 4.25 | | | | 6,680 | | | | 56.4 | | 3.35 | |
Securities - tax-exempt | | | 2,068 | | | | 21.0 | | 5.07 | | | | 2,047 | | | | 19.5 | | 4.73 | |
Total securities (1) | | | 8,465 | | | | 89.4 | | 4.45 | | | | 8,727 | | | | 75.9 | | 3.66 | |
Cash and other | | | 1,361 | | | | 13.8 | | 4.02 | | | | 1,239 | | | | 6.5 | | 2.07 | |
Total interest earning assets | | | 64,718 | | | | 888.3 | | 5.50 | | | | 64,136 | | | | 739.4 | | 4.62 | |
Non-interest earning assets | | | | | | | | | | | | |
Cash and due from banks | | | 289 | | | | | | | | 242 | | | | | |
Allowance for credit losses | | | (308 | ) | | | | | | | (282 | ) | | | | |
Bank owned life insurance | | | 181 | | | | | | | | 180 | | | | | |
Other assets | | | 4,613 | | | | | | | | 4,100 | | | | | |
Total assets | | $ | 69,493 | | | | | | | $ | 68,376 | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | |
Interest-bearing transaction accounts | | $ | 8,754 | | | $ | 43.6 | | 1.98 | % | | $ | 8,466 | | | $ | 24.5 | | 1.15 | % |
Savings and money market | | | 18,651 | | | | 88.0 | | 1.87 | | | | 18,515 | | | | 44.5 | | 0.95 | |
Certificates of deposit | | | 4,260 | | | | 26.0 | | 2.42 | | | | 2,843 | | | | 8.6 | | 1.19 | |
Total interest-bearing deposits | | | 31,665 | | | | 157.6 | | 1.97 | | | | 29,824 | | | | 77.6 | | 1.03 | |
Short-term borrowings | | | 5,440 | | | | 54.8 | | 3.99 | | | | 4,136 | | | | 27.0 | | 2.59 | |
Long-term debt | | | 1,240 | | | | 27.1 | | 8.68 | | | | 1,228 | | | | 23.8 | | 7.69 | |
Qualifying debt | | | 890 | | | | 9.1 | | 4.08 | | | | 891 | | | | 8.9 | | 3.94 | |
Total interest-bearing liabilities | | | 39,235 | | | | 248.6 | | 2.51 | | | | 36,079 | | | | 137.3 | | 1.51 | |
Interest cost of funding earning assets | | | | 1.52 | | | | | | | 0.84 | |
Non-interest-bearing liabilities | | | | | | | | | | | | |
Non-interest-bearing demand deposits | | | 23,729 | | | | | | | | 25,865 | | | | | |
Other liabilities | | | 1,296 | | | | | | | | 1,282 | | | | | |
Stockholders’ equity | | | 5,233 | | | | | | | | 5,150 | | | | | |
Total liabilities and stockholders' equity | | $ | 69,493 | | | | | | | $ | 68,376 | | | | | |
Net interest income and margin (4) | | | | $ | 639.7 | | 3.98 | % | | | | $ | 602.1 | | 3.78 | % |
(1) | | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.0 million and $8.5 million for the three months ended December 31, 2022 and September 30, 2022, respectively. |
(2) | | Included in the yield computation are net loan fees of $34.8 million and $31.9 million for the three months ended December 31, 2022 and September 30, 2022, respectively. |
(3) | | Includes non-accrual loans. |
(4) | | Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis. |
Western Alliance Bancorporation and Subsidiaries |
Analysis of Average Balances, Yields and Rates |
Unaudited |
| | Three Months Ended |
| | December 31, 2022 | | December 31, 2021 |
| | Average Balance | | Interest | | Average Yield / Cost | | Average Balance | | Interest | | Average Yield / Cost |
| | ($ in millions) | | | | ($ in millions) | | |
Interest earning assets | | | | | | | | | | | | |
Loans held for sale | | $ | 2,659 | | | $ | 37.8 | | 5.63 | % | | $ | 9,159 | | | $ | 70.3 | | 3.04 | % |
Loans held for investment: | | | | | | | | | | | | |
Commercial and industrial | | | 21,654 | | | | 349.3 | | 6.45 | | | | 17,087 | | | | 169.5 | | 4.01 | |
CRE - non-owner-occupied | | | 9,077 | | | | 148.8 | | 6.51 | | | | 6,209 | | | | 70.0 | | 4.48 | |
CRE - owner-occupied | | | 1,830 | | | | 24.4 | | 5.39 | | | | 1,971 | | | | 24.2 | | 4.96 | |
Construction and land development | | | 3,798 | | | | 80.2 | | 8.38 | | | | 3,016 | | | | 43.9 | | 5.78 | |
Residential real estate | | | 15,803 | | | | 143.5 | | 3.60 | | | | 8,282 | | | | 60.3 | | 2.89 | |
Consumer | | | 71 | | | | 1.1 | | 6.26 | | | | 44 | | | | 0.4 | | 3.85 | |
Total HFI loans (1), (2), (3) | | | 52,233 | | | | 747.3 | | 5.70 | | | | 36,609 | | | | 368.3 | | 4.03 | |
Securities: | | | | | | | | | | | | |
Securities - taxable | | | 6,397 | | | | 68.4 | | 4.25 | | | | 5,443 | | | | 25.6 | | 1.86 | |
Securities - tax-exempt | | | 2,068 | | | | 21.0 | | 5.07 | | | | 2,175 | | | | 18.1 | | 4.12 | |
Total securities (1) | | | 8,465 | | | | 89.4 | | 4.45 | | | | 7,618 | | | | 43.7 | | 2.51 | |
Other | | | 1,361 | | | | 13.8 | | 4.02 | | | | 1,274 | | | | 1.0 | | 0.31 | |
Total interest earning assets | | | 64,718 | | | | 888.3 | | 5.50 | | | | 54,660 | | | | 483.3 | | 3.57 | |
Non-interest earning assets | | | | | | | | | | | | |
Cash and due from banks | | | 289 | | | | | | | | 253 | | | | | |
Allowance for credit losses | | | (308 | ) | | | | | | | (256 | ) | | | | |
Bank owned life insurance | | | 181 | | | | | | | | 179 | | | | | |
Other assets | | | 4,613 | | | | | | | | 2,767 | | | | | |
Total assets | | $ | 69,493 | | | | | | | $ | 57,603 | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | |
Interest-bearing transaction accounts | | $ | 8,754 | | | $ | 43.6 | | 1.98 | % | | $ | 5,918 | | | $ | 1.7 | | 0.11 | % |
Savings and money market accounts | | | 18,651 | | | | 88.0 | | 1.87 | | | | 17,215 | | | | 9.1 | | 0.21 | |
Certificates of deposit | | | 4,260 | | | | 26.0 | | 2.42 | | | | 2,074 | | | | 2.0 | | 0.38 | |
Total interest-bearing deposits | | | 31,665 | | | | 157.6 | | 1.97 | | | | 25,207 | | | | 12.8 | | 0.20 | |
Short-term borrowings | | | 5,440 | | | | 54.8 | | 3.99 | | | | 2,815 | | | | 2.4 | | 0.35 | |
Long-term debt | | | 1,240 | | | | 27.1 | | 8.68 | | | | 565 | | | | 8.3 | | 5.81 | |
Qualifying debt | | | 890 | | | | 9.1 | | 4.08 | | | | 978 | | | | 9.2 | | 3.72 | |
Total interest-bearing liabilities | | | 39,235 | | | | 248.6 | | 2.51 | | | | 29,565 | | | | 32.7 | | 0.44 | |
Interest cost of funding earning assets | | | | 1.52 | | | | | | | 0.24 | |
Non-interest-bearing liabilities | | | | | | | | | | | | |
Non-interest-bearing demand deposits | | | 23,729 | | | | | | | | 22,487 | | | | | |
Other liabilities | | | 1,296 | | | | | | | | 913 | | | | | |
Stockholders’ equity | | | 5,233 | | | | | | | | 4,638 | | | | | |
Total liabilities and stockholders' equity | | $ | 69,493 | | | | | | | $ | 57,603 | | | | | |
Net interest income and margin (4) | | | | $ | 639.7 | | 3.98 | % | | | | $ | 450.6 | | 3.33 | % |
(1) | | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.0 million and $8.4 million for the three months ended December 31, 2022 and 2021, respectively. |
(2) | | Included in the yield computation are net loan fees of $34.8 million and $35.8 million for the three months ended December 31, 2022 and 2021, respectively. |
(3) | | Includes non-accrual loans. |
(4) | | Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis. |
Western Alliance Bancorporation and Subsidiaries |
Analysis of Average Balances, Yields and Rates |
Unaudited |
| | Year Ended |
| | December 31, 2022 | | December 31, 2021 |
| | Average Balance | | Interest | | Average Yield / Cost | | Average Balance | | Interest | | Average Yield / Cost |
| | ($ in millions) | | | | ($ in millions) | | |
Interest earning assets | | | | | | | | | | | | |
Loans held for sale | | $ | 4,364 | | | $ | 180.3 | | 4.13 | % | | $ | 5,476 | | | $ | 174.4 | | 3.18 | % |
Loans held for investment: | | | | | | | | | | | | |
Commercial and industrial | | | 20,082 | | | | 1,002.8 | | 5.05 | | | | 14,979 | | | | 624.8 | | 4.26 | |
CRE - non-owner occupied | | | 7,769 | | | | 416.4 | | 5.37 | | | | 5,829 | | | | 271.3 | | 4.67 | |
CRE - owner occupied | | | 1,841 | | | | 93.2 | | 5.16 | | | | 2,030 | | | | 97.7 | | 4.92 | |
Construction and land development | | | 3,426 | | | | 229.1 | | 6.69 | | | | 2,790 | | | | 160.0 | | 5.74 | |
Residential real estate | | | 13,771 | | | | 468.5 | | 3.40 | | | | 5,129 | | | | 158.9 | | 3.10 | |
Consumer | | | 61 | | | | 3.1 | | 5.07 | | | | 39 | | | | 1.7 | | 4.43 | |
Total HFI loans (1), (2), (3) | | | 46,951 | | | | 2,213.1 | | 4.74 | | | | 30,796 | | | | 1,314.4 | | 4.32 | |
Securities: | | | | | | | | | | | | |
Securities - taxable | | | 6,324 | | | | 195.3 | | 3.09 | | | | 5,284 | | | | 95.8 | | 1.81 | |
Securities - tax-exempt | | | 2,067 | | | | 77.3 | | 4.68 | | | | 2,137 | | | | 68.9 | | 4.05 | |
Total securities (1) | | | 8,391 | | | | 272.6 | | 3.48 | | | | 7,421 | | | | 164.7 | | 2.46 | |
Other | | | 1,574 | | | | 25.8 | | 1.64 | | | | 2,718 | | | | 5.2 | | 0.19 | |
Total interest earning assets | | | 61,281 | | | | 2,691.8 | | 4.45 | | | | 46,411 | | | | 1,658.7 | | 3.65 | |
Non-interest earning assets | | | | | | | | | | | | |
Cash and due from banks | | | 260 | | | | | | | | 293 | | | | | |
Allowance for credit losses | | | (280 | ) | | | | | | | (261 | ) | | | | |
Bank owned life insurance | | | 180 | | | | | | | | 178 | | | | | |
Other assets | | | 3,948 | | | | | | | | 2,487 | | | | | |
Total assets | | $ | 65,389 | | | | | | | $ | 49,108 | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | |
Interest-bearing transaction accounts | | $ | 8,331 | | | $ | 78.8 | | 0.95 | % | | $ | 4,751 | | | $ | 5.9 | | 0.13 | % |
Savings and money market accounts | | | 18,518 | | | | 158.6 | | 0.86 | | | | 15,814 | | | | 33.1 | | 0.21 | |
Certificates of deposit | | | 2,772 | | | | 39.0 | | 1.40 | | | | 1,850 | | | | 8.5 | | 0.46 | |
Total interest-bearing deposits | | | 29,621 | | | | 276.4 | | 0.93 | | | | 22,415 | | | | 47.5 | | 0.21 | |
Short-term borrowings | | | 3,424 | | | | 92.1 | | 2.69 | | | | 1,206 | | | | 8.2 | | 0.68 | |
Long-term debt | | | 1,008 | | | | 72.0 | | 7.14 | | | | 373 | | | | 21.1 | | 5.65 | |
Qualifying debt | | | 893 | | | | 35.0 | | 3.92 | | | | 827 | | | | 33.1 | | 4.00 | |
Total interest-bearing liabilities | | | 34,946 | | | | 475.5 | | 1.36 | | | | 24,821 | | | | 109.9 | | 0.44 | |
Interest cost of funding earning assets | | | | 0.78 | | | | | | | 0.24 | |
Non-interest-bearing liabilities | | | | | | | | | | | | |
Non-interest-bearing demand deposits | | | 24,133 | | | | | | | | 19,416 | | | | | |
Other liabilities | | | 1,211 | | | | | | | | 837 | | | | | |
Stockholders’ equity | | | 5,099 | | | | | | | | 4,034 | | | | | |
Total liabilities and stockholders' equity | | $ | 65,389 | | | | | | | $ | 49,108 | | | | | |
Net interest income and margin (4) | | | | $ | 2,216.3 | | 3.67 | % | | | | $ | 1,548.8 | | 3.41 | % |
(1) | | Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $33.7 million and $33.3 million for the year ended December 31, 2022 and 2021, respectively. |
(2) | | Included in the yield computation are net loan fees of $132.2 million and $131.7 million for the year ended December 31, 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 |
Operating Segment Results |
Unaudited |
| | | | | | | | |
Balance Sheet: | | | | | | | | |
| | Consolidated Company | | Commercial | | Consumer Related | | Corporate & Other |
At December 31, 2022: | | (dollars in millions) |
Assets: | | | | | | | | |
Cash, cash equivalents, and investment securities | | $ | 9,803 | | | $ | 12 | | | $ | — | | | $ | 9,791 | |
Loans held for sale | | | 1,184 | | | | — | | | | 1,184 | | | | — | |
Loans, net of deferred fees and costs | | | 51,862 | | | | 31,414 | | | | 20,448 | | | | — | |
Less: allowance for credit losses | | | (310 | ) | | | (262 | ) | | | (48 | ) | | | — | |
Total loans | | | 51,552 | | | | 31,152 | | | | 20,400 | | | | — | |
Other assets acquired through foreclosure, net | | | 11 | | | | 11 | | | | — | | | | — | |
Goodwill and other intangible assets, net | | | 680 | | | | 293 | | | | 387 | | | | — | |
Other assets | | | 4,504 | | | | 435 | | | | 2,180 | | | | 1,889 | |
Total assets | | $ | 67,734 | | | $ | 31,903 | | | $ | 24,151 | | | $ | 11,680 | |
Liabilities: | | | | | | | | |
Deposits | | $ | 53,644 | | | $ | 29,494 | | | $ | 18,492 | | | $ | 5,658 | |
Borrowings and qualifying debt | | | 7,192 | | | | 27 | | | | 340 | | | | 6,825 | |
Other liabilities | | | 1,542 | | | | 83 | | | | 656 | | | | 803 | |
Total liabilities | | | 62,378 | | | | 29,604 | | | | 19,488 | | | | 13,286 | |
Allocated equity: | | | 5,356 | | | | 2,684 | | | | 1,691 | | | | 981 | |
Total liabilities and stockholders' equity | | $ | 67,734 | | | $ | 32,288 | | | $ | 21,179 | | | $ | 14,267 | |
Excess funds provided (used) | | | — | | | | 385 | | | | (2,972 | ) | | | 2,587 | |
| | | | | | | | |
No. of offices | | | 56 | | | | 46 | | | | 8 | | | | 2 | |
No. of full-time equivalent employees | | | 3,365 | | | | 671 | | | | 785 | | | | 1,909 | |
| | | | | | | | |
Income Statement: | | | | | | | | |
| | | | | | | | |
Three Months Ended December 31, 2022: | | (in millions) |
Net interest income | | $ | 639.7 | | | $ | 428.0 | | | $ | 216.4 | | | $ | (4.7 | ) |
Provision for (recovery of) credit losses | | | 3.1 | | | | (5.9 | ) | | | 8.2 | | | | 0.8 | |
Net interest income (expense) after provision for credit losses | | | 636.6 | | | | 433.9 | | | | 208.2 | | | | (5.5 | ) |
Non-interest income | | | 61.5 | | | | 8.7 | | | | 49.2 | | | | 3.6 | |
Non-interest expense | | | 333.4 | | | | 122.1 | | | | 187.6 | | | | 23.7 | |
Income (loss) before income taxes | | | 364.7 | | | | 320.5 | | | | 69.8 | | | | (25.6 | ) |
Income tax expense (benefit) | | | 71.7 | | | | 76.1 | | | | 16.3 | | | | (20.7 | ) |
Net income (loss) | | $ | 293.0 | | | $ | 244.4 | | | $ | 53.5 | | | $ | (4.9 | ) |
| | | | | | | | |
Year Ended December 31, 2022: | | (in millions) |
Net interest income | | $ | 2,216.3 | | | $ | 1,546.3 | | | $ | 854.1 | | | $ | (184.1 | ) |
Provision for (recovery of) credit losses | | | 68.1 | | | | 47.2 | | | | 21.1 | | | | (0.2 | ) |
Net interest income (expense) after provision for credit losses | | | 2,148.2 | | | | 1,499.1 | | | | 833.0 | | | | (183.9 | ) |
Non-interest income | | | 324.6 | | | | 59.7 | | | | 247.2 | | | | 17.7 | |
Non-interest expense | | | 1,156.7 | | | | 463.5 | | | | 630.1 | | | | 63.1 | |
Income (loss) before income taxes | | | 1,316.1 | | | | 1,095.3 | | | | 450.1 | | | | (229.3 | ) |
Income tax expense (benefit) | | | 258.8 | | | | 260.5 | | | | 107.1 | | | | (108.8 | ) |
Net income (loss) | | $ | 1,057.3 | | | $ | 834.8 | | | $ | 343.0 | | | $ | (120.5 | ) |
| | | | | | | | |
Western Alliance Bancorporation and Subsidiaries |
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 | |
