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Western Alliance Bancorporation Reports First Quarter 2023 Financial Results

Western Alliance Bancorporation (NYSE:WAL):

Fourth Quarter Highlights:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

Earnings per share

 

PPNR1

 

Net interest margin

 

Efficiency ratio1

 

Book value per

common share

$142.2 million

 

$1.28

 

$351.6 million

 

3.79%

 

43.2%

 

$47.72

 

$2.301, as adjusted

 

 

 

 

$41.561, excluding

goodwill and intangibles

CEO COMMENTARY:

“The flexibility of our diversified, national commercial banking strategy, with a broad range of value-added deposit channels and deep commercial customer relationships in a wide variety of sectors and geographies, all contributed to our firm’s resilience in the face of recent turbulence in the banking industry,” said Kenneth A. Vecchione, President and Chief Executive Officer. “We believe our focus on sound financial fundamentals and stable asset quality have helped us navigate through this challenging time. As we move forward with a renewed perspective, we are well-positioned to expand our client relationships and continue to achieve a strong return profile. Balance sheet repositioning, which included surgical sale of assets and loan reclassifications, resulted in after tax net non-operating charges of $109.7 million, but will have an immediate accretive impact to regulatory capital and allow us to prioritize core client relationships with holistic lending, deposit, and treasury management needs. The Company earned through these charges and achieved net income of $142.2 million and earnings per share of $1.28 for the quarter, increasing tangible book value per share1 3.3% to $41.56 from year-end with a CET1 ratio of 9.4%. While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized with end of quarter deposits of $47.6 billion. Since March 31, deposits have increased an additional $2.0 billion through April 14, with total insured deposits representing 73% of total deposits, which is well above industry norms compared to the 50 largest U.S. banks. Immediately available liquidity exceeds uninsured deposits, with a coverage ratio of 158% as of April 14. As we travel through the year and into 2024, capital expectations are targeted against a higher CET1 ratio at or above 11% with greater liquidity to be evidenced by a loan-to-deposit ratio in the mid-80% range. Balance sheet and earnings trajectory will be informed by these guideposts.”

LINKED-QUARTER BASIS

YEAR-OVER-YEAR

 
FINANCIAL HIGHLIGHTS:
  • Net income of $142.2 million and earnings per share of $1.28, compared to $293.0 million and $2.67, respectively
  • Net income of $142.2 million and earnings per share of $1.28, down 40.8% and 42.3%, from $240.1 million and $2.22, respectively
  • Adjusted earnings per share1 of $2.30 decreased from $2.74
  • Adjusted earnings per share1 of $2.30 increased from $2.22
  • Net revenue of $551.9 million, a decrease of 21.3%, or $149.3 million, compared to an increase in non-interest expenses of 4.3%, or $14.5 million
  • Net revenue of $551.9 million, a decrease of 0.7%, or $3.9 million, compared to an increase in non-interest expenses of 39.9%, or $99.3 million
  • Adjusted net revenue1 of $712.2 million, an increase of $1.9 million
  • Adjusted net revenue1 of $712.2 million, an increase of $156.7 million
  • Pre-provision net revenue1 of $351.6 million, down $25.3 million from $376.9 million
  • Pre-provision net revenue1 of $351.6 million, up $44.7 million from $306.9 million
  • Effective tax rate of 23.0%, compared to 19.7%
  • Effective tax rate of 23.0%, compared to 19.5%

 

 

FINANCIAL POSITION RESULTS:

 

  • HFI loans of $46.4 billion, down $5.4 billion, or 10.5%
  • Increase in HFI loans of $5.3 billion, or 12.9%
  • Total deposits of $47.6 billion, down $6.1 billion, or 11.3%
  • Decrease in total deposits of $4.6 billion, or 8.8%
  • Stockholders' equity of $5.5 billion, up $165 million
  • Increase in stockholders' equity of $509 million

 

 

LOANS AND ASSET QUALITY:

 

  • Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.17%, compared to 0.14%
  • Nonperforming assets to total assets of 0.17%, compared to 0.17%
  • Annualized net loan charge-offs to average loans outstanding of 0.05%, compared to 0.01%
  • Annualized net loan charge-offs to average loans outstanding of 0.05%, compared to approximately 0.00%

 

 

KEY PERFORMANCE METRICS:

 

  • Net interest margin of 3.79% decreased from 3.98%
  • Net interest margin of 3.79% increased from 3.32%
  • Return on average assets and on tangible common equity1 of 0.81% and 12.2%, compared to 1.67% and 27.0%, respectively
  • Return on average assets and on tangible common equity1 of 0.81% and 12.2%, compared to 1.64% and 23.9%, respectively
  • Adjusted return on average assets1 and adjusted tangible common equity1 of 1.43% and 21.9% compared to 1.71% and 27.7%, respectively
  • Adjusted return on average assets1 and adjusted tangible common equity1 of 1.43% and 21.9% compared to 1.64% and 23.9%, respectively
  • Tangible common equity ratio1 of 6.5%, compared to 6.5%
  • Tangible common equity ratio1 of 6.5% decreased from 6.7%
  • CET 1 ratio of 9.4% increased from 9.3%
  • CET 1 ratio of 9.4% increased from 9.0%
  • Tangible book value per share1, net of tax, of $41.56, an increase of 3.3% from $40.25
  • Tangible book value per share1, net of tax, of $41.56, an increase of 11.9% from $37.13
  • Efficiency ratio1 of 43.2%, compared to 39.4%
  • Efficiency ratio1 of 43.2%, compared to 43.2%

1See reconciliation of Non-GAAP Financial Measures.

Income Statement

Net interest income was $609.9 million in the first quarter 2023, a decrease of $29.8 million from $639.7 million in the fourth quarter 2022, and an increase of $160.4 million, or 35.7%, compared to the first quarter 2022. The decrease in net interest income from the fourth quarter 2022 is due to an increase in average balances of short-term borrowings and interest bearing deposits, combined with higher average interest rates. These were partially offset by higher yields on HFI loans and an increase in the average cash balance. The net interest income increase from the first quarter 2022 was driven by HFI loan growth and higher yields on HFI loans, partially offset by an increase in other borrowings and higher interest rates on liabilities.

The Company recorded a provision for credit losses of $19.4 million in the first quarter 2023, an increase of $16.3 million from $3.1 million in the fourth quarter 2022, and an increase of $10.4 million from $9.0 million in the first quarter 2022. The provision for credit losses during the first quarter 2023 is primarily due to a charge-off of a corporate debt security from a financial institution issuer and heightened economic uncertainty, offset by a decrease in HFI loans as the Company transferred $6.0 billion of held for investment loans to held for sale as part of its balance sheet repositioning plan to strengthen regulatory capital.

The Company’s net interest margin in the first quarter 2023 was 3.79%, a decrease from 3.98% in the fourth quarter 2022, and an increase from 3.32% in the first quarter 2022. Higher balances and rates on borrowings and interest bearing deposits drove a decrease in net interest margin, with higher yields on HFI loans partially offsetting the decrease. The increase in net interest margin from the first quarter 2022 was driven by HFI loan growth plus an increase in rates, partially offset by higher deposits and borrowings balances and rates.

Non-interest income was $(58.0) million, or $102.3 million after adjusting for losses on security sales and fair value adjustments, for the first quarter 2023, compared to $61.5 million for the fourth quarter 2022, and $106.3 million for the first quarter 2022. Fair value loss adjustments of $147.8 million are primarily related to the transfer of $6.0 billion of held for investment loans to held for sale. This decrease in non-interest income for the quarter was partially offset by a $20.5 million increase in net loan servicing revenue due to an increase in fees and the value of MSRs as well as a $6.0 million increase in net gain on loan origination and sale activities from an increase in spreads and gains from trading activity. The $164.3 million decrease from the first quarter 2022 was driven by fair value loss adjustments from HFI loans transferred to HFS and losses from sales of investment securities.

Net revenue was $551.9 million for the first quarter 2023, compared to $701.2 million and $555.8 million for the fourth quarter 2022 and first quarter 2022, respectively. After adjusting for losses on security sales and fair value adjustments, net revenue1 was $712.2 million for the first quarter 2023, an increase of $1.9 million, compared to $710.3 million for the fourth quarter 2022, and an increase of $156.7 million, or 28.2%, compared to $555.5 million for the first quarter 2022.

Non-interest expense was $347.9 million, or $360.6 million after adjusting for gain on extinguishment of debt from payoff of credit linked notes, for the first quarter 2023, compared to $333.4 million for the fourth quarter 2022, and $248.6 million for the first quarter 2022. The Company’s adjusted efficiency ratio1 was 43.2% for the first quarter 2023, compared to 39.4% in the fourth quarter 2022, and 43.2% for the first quarter 2022. The increase in non-interest expense from the fourth quarter 2022 is due primarily to higher salaries and benefits costs. The increase in non-interest expense from the first quarter 2022 is attributable to increased deposit costs.

Income tax expense was $42.4 million for the first quarter 2023, compared to $71.7 million for the fourth quarter 2022, and $58.1 million for the first quarter 2022.

Net income was $142.2 million for the first quarter 2023, a decrease of $150.8 million from $293.0 million for the fourth quarter 2022, and a decrease of $97.9 million from $240.1 million for the first quarter 2022. Earnings per share totaled $1.28 for the first quarter 2023, compared to $2.67 for the fourth quarter 2022, and $2.22 for the first quarter 2022. Earnings per share1 adjusted for losses on security sales, fair value loss adjustments and gain on extinguishment of debt was $2.30 for the first quarter 2023, compared to $2.74 and $2.22 for the fourth quarter 2022 and first quarter 2022, respectively.

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 revenue1 less non-interest expense1. For the first quarter 2023, the Company’s PPNR1 was $351.6 million, down $25.3 million from $376.9 million in the fourth quarter 2022, and up $44.7 million from $306.9 million in the first quarter 2022.

The Company had 3,340 full-time equivalent employees and 57 offices at March 31, 2023, compared to 3,365 employees and 56 offices at December 31, 2022, and 3,170 employees and 60 offices at March 31, 2022.

1 See reconciliation of Non-GAAP Financial Measures.

Balance Sheet

HFI loans, net of deferred fees totaled $46.4 billion at March 31, 2023, compared to $51.9 billion at December 31, 2022, and $41.1 billion at March 31, 2022. The decrease in HFI loans of $5.4 billion from the prior quarter was driven by a decrease of $5.2 billion in commercial and industrial loans as $5.4 billion of commercial and industrial loans were transferred to HFS as of quarter-end. In addition, residential real estate loans decreased $904 million ($490 million transferred to HFS), partially offset by increases of $394 million in construction and land development and $298 million in CRE non-owner occupied loans ($110 million transferred to HFS). From March 31, 2022, HFI loan growth of $5.3 billion, was primarily driven by residential real estate, CRE non-owner occupied, and construction and land development loans which increased $3.8 billion, $2.8 billion, and $1.1 billion, respectively, offset by commercial and industrial loans which decreased $2.4 billion.

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, 2023, the allowance for loan losses to funded HFI loans ratio was 0.66%, compared to 0.60% at December 31, 2022, and 0.63% at March 31, 2022. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.75% at March 31, 2023, compared to 0.69% at December 31, 2022, and 0.73% at March 31, 2022. The Company is a party to credit linked note transactions, which effectively transfer a portion of the risk of losses on reference pools of loans to the purchasers of the notes. As of March 31, 2023, December 31, 2022, and March 31, 2022, the Company is protected from first credit losses on reference pools of loans totaling $11.0 billion, $12.0 billion, and $5.4 billion, respectively, under these transactions. However, as these note transactions are considered to be free standing credit enhancements, the allowance for credit losses cannot be reduced by the expected credit losses that may be mitigated by these notes. Accordingly, the allowance for loan and credit losses ratios include an allowance of $20.8 million as of March 31, 2023, $21.9 million as of December 31, 2022, and $9.5 million as of March 31, 2022, related to these pools of loans. The allowance for credit losses to funded HFI loans ratio, adjusted to reduce the HFI loan balance by the amount of loans in covered reference pools, was 0.95% at March 31, 2023, 0.89% at December 31, 2022, and 0.84% at March 31, 2022.

Deposits totaled $47.6 billion at March 31, 2023, a decrease of $6.1 billion from $53.6 billion at December 31, 2022, and a decrease of $4.6 billion from $52.2 billion at March 31, 2022. By deposit type, the decrease from the prior quarter is attributable to a decrease of $5.6 billion from savings and money market accounts and $3.2 billion from non-interest bearing demand deposits, partially offset by increases of $1.5 billion from certificates of deposits and $1.2 billion from interest bearing demand deposits. From March 31, 2022, non-interest bearing demand deposits and savings and money market accounts decreased $7.1 billion and $4.7 billion, respectively. These decreases were partially offset by increases in certificates of deposit and interest-bearing demand deposits of $4.7 billion and $2.5 billion, respectively. Non-interest bearing deposits were $16.5 billion at March 31, 2023, compared to $19.7 billion at December 31, 2022, and $23.5 billion at March 31, 2022.

The table below shows the Company's deposit types as a percentage of total deposits:

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

Non-interest bearing

 

34.6 %

 

36.7 %

 

45.1 %

Savings and money market

 

29.1

 

36.2

 

35.6

Interest-bearing demand

 

22.5

 

17.7

 

15.8

Certificates of deposit

 

13.8

 

9.4

 

3.5

The Company’s ratio of HFI loans to deposits was 97.6% at March 31, 2023, compared to 96.7% at December 31, 2022, and 78.8% at March 31, 2022.

Borrowings were $15.9 billion at March 31, 2023, $6.3 billion at December 31, 2022, and $833 million at March 31, 2022. Borrowings increased from December 31, 2022 due primarily to an increase in short-term borrowings of $9.8 billion offset by payoffs of credit linked notes of $265 million. The increase in borrowings from March 31, 2022 is due to an increase in short-term borrowings of $14.7 billion and issuance of $579 million of credit linked notes, net of issuance costs, during 2022, less payoffs of credit linked notes in the first quarter of 2023.

Qualifying debt totaled $895 million at March 31, 2023, compared to $893 million at December 31, 2022 and March 31, 2022.

Stockholders’ equity was $5.5 billion at March 31, 2023, compared to $5.4 billion at December 31, 2022 and $5.0 billion at March 31, 2022. The increase in stockholders’ equity quarter over quarter was due to net income and unrealized fair value gains of approximately $71 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 March 3, 2023, totaling $39.4 million, and a cash dividend of $0.27 per depository share was paid to preferred shareholders on March 30, 2023, totaling $3.2 million. The increase in stockholders' equity from March 31, 2022 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 March 31, 2023, 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 $41.56 at March 31, 2023, an increase of 3.3% from $40.25 at December 31, 2022, and up 11.9% from $37.13 at March 31, 2022. The increase in tangible book value per share from December 31, 2022 is attributable to net income and unrealized fair value gains on the Company's available for sale securities.

Total assets increased 4.9% to $71.0 billion at March 31, 2023, from $67.7 billion at December 31, 2022, and increased 17.3% from $60.6 billion at March 31, 2022. The increase in total assets from December 31, 2022 and March 31, 2022 was driven by an increase in cash and investments.

1 See reconciliation of Non-GAAP Financial Measures.

Asset Quality

Provision for credit losses totaled $19.4 million for the first quarter 2023, compared to $3.1 million for the fourth quarter 2022, and $9.0 million for the first quarter 2022. Net loan charge-offs in the first quarter 2023 were $6.0 million, or 0.05% of average loans (annualized), compared to $1.8 million, or 0.01%, in the fourth quarter 2022, and $0.2 million, or approximately 0.00%, in the first quarter 2022.

Nonaccrual loans increased $22 million to $107 million during the quarter and increased $16 million from March 31, 2022. Loans past due 90 days and still accruing interest were $1 million (excluding government guaranteed loans of $494 million) at March 31, 2023, compared to zero at December 31, 2022 and March 31, 2022 (excluding government guaranteed loans of $582 million and zero at December 31, 2022 and March 31, 2022, respectively). Loans past due 30-89 days and still accruing interest totaled $58 million (excluding government guaranteed loans of $281 million) at March 31, 2023, a decrease from $70 million at December 31, 2022, and flat from $58 million at March 31, 2022 (excluding government guaranteed loans of $334 million and zero at December 31, 2022 and March 31, 2022, respectively).

Repossessed assets totaled $11 million at March 31, 2023, flat from December 31, 2022, and a $1 million decrease from $12 million at March 31, 2022. Classified assets totaled $459 million at March 31, 2023, an increase of $66 million from $393 million at December 31, 2022, and an increase of $94 million from $365 million at March 31, 2022.

The ratio of classified assets to Tier 1 capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 7.8% at March 31, 2023, compared to 6.8% at December 31, 2022, and 7.4% at March 31, 2022.

1 See reconciliation of Non-GAAP Financial Measures.

Segment Highlights

The Company's reportable segments are aggregated with a focus on products and services offered and consist of three reportable segments:

   

Commercial segment: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry.

   

Consumer Related segment: offers both commercial banking services to enterprises in consumer-related sectors and consumer banking services, such as residential mortgage banking.

   

Corporate & Other segment: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to our other reportable segments, and inter-segment eliminations.

Key management metrics for evaluating the performance of the Company's Commercial and Consumer Related segments include loan and deposit growth, asset quality, and pre-tax income.

The Commercial segment reported an HFI loan balance of $27.3 billion at March 31, 2023, a decrease of $4.1 billion during the quarter, and an increase of $1.5 billion during the last twelve months. The Commercial segment also has loans held for sale of $4.7 billion at March 31, 2023. Deposits for the Commercial segment totaled $22.0 billion at March 31, 2023, a decrease of $7.5 billion during the quarter, and a decrease of $8.1 billion during the last twelve months.

Pre-tax income for the Commercial segment was $159.4 million for the three months ended March 31, 2023, a decrease of $161.1 million from the three months ended December 31, 2022, and a decrease of $77.4 million from the three months ended March 31, 2022.

The Consumer Related segment reported an HFI loan balance of $19.2 billion at March 31, 2023, a decrease of $1.3 billion during the quarter, and an increase of $3.8 billion during the last twelve months. The Consumer Related segment also has loans held for sale of $2.3 billion at March 31, 2023, an increase of $1.1 billion during the quarter, and a decrease of $2.5 billion during the last twelve months. Deposits for the Consumer Related segment totaled $20.0 billion, an increase of $1.5 billion during the quarter and during the last twelve months.

Pre-tax income for the Consumer Related segment was $56.8 million for the three months ended March 31, 2023, a decrease of $13.0 million from the three months ended December 31, 2022, and a decrease of $70.1 million from the three months ended March 31, 2022.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its first quarter 2023 financial results at 12:00 p.m. ET on Wednesday, April 19, 2023. Participants may access the call by dialing 1-833-470-1428 and using access code 192362 or via live audio webcast using the website link https://events.q4inc.com/attendee/218206682. 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 11:00 p.m. ET May 19th by dialing 1-866-813-9403, using access code 279348.

Reclassifications

Certain amounts in the Consolidated Income Statements for the prior periods have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported.

Use of Non-GAAP Financial Information

This press release contains both financial measures based on GAAP and non-GAAP based financial measures, which are used where management believes them to be helpful in understanding the Company’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding our expectations with regard to our business, financial and operating results, future economic performance and dividends. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include, among others: the risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the Company's subsequent Quarterly Reports on Form 10-Q, each as filed with the Securities and Exchange Commission; adverse developments in the financial services industry generally such as the recent bank failures and any related impact on depositor behavior; risks related to the sufficiency of liquidity; the potential adverse effects of unusual and infrequently occurring events such as the COVID-19 pandemic and any governmental or societal responses thereto; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; the impact on financial markets from geopolitical conflicts such as the 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 March 31,

 

 

 

2023

 

 

 

2022

 

Change %

 

 

(in millions)

 

 

Total assets

 

$

71,047

 

 

$

60,576

 

17.3

%

Loans held for sale

 

 

7,022

 

 

 

4,762

 

47.5

 

HFI loans, net of deferred fees

 

 

46,435

 

 

 

41,119

 

12.9

 

Investment securities

 

9,493

 

 

 

8,277

 

14.7

 

Total deposits

 

 

47,587

 

 

 

52,160

 

(8.8

)

Borrowings

 

 

15,853

 

 

 

833

 

NM

 

Qualifying debt

 

 

895

 

 

 

893

 

0.2

 

Stockholders' equity

 

 

5,521

 

 

 

5,012

 

10.2

 

Tangible common equity, net of tax (1)

 

 

4,551

 

 

 

4,021

 

13.2

 

Common equity Tier 1 capital

 

 

5,159

 

 

 

4,292

 

20.2

 

 

 

 

 

 

 

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

For the Three Ended March 31,

 

 

 

2023

 

 

 

2022

 

Change %

 

 

(in millions, except per share data)

 

 

Interest income

 

$

968.9

 

 

$

484.5

 

100.0

%

Interest expense

 

 

359.0

 

 

 

35.0

 

NM

 

Net interest income

 

 

609.9

 

 

 

449.5

 

35.7

 

Provision for credit losses

 

 

19.4

 

 

 

9.0

 

NM

 

Net interest income after provision for credit losses

 

 

590.5

 

 

 

440.5

 

34.1

 

Non-interest income

 

 

(58.0

)

 

 

106.3

 

NM

 

Non-interest expense

 

 

347.9

 

 

 

248.6

 

39.9

 

Income before income taxes

 

 

184.6

 

 

 

298.2

 

(38.1

)

Income tax expense

 

 

42.4

 

 

 

58.1

 

(27.0

)

Net income

 

 

142.2

 

 

 

240.1

 

(40.8

)

Dividends on preferred stock

 

 

3.2

 

 

 

3.2

 

 

Net income available to common stockholders

 

$

139.0

 

 

$

236.9

 

(41.3

)

Diluted earnings per common share

 

$

1.28

 

 

$

2.22

 

(42.3

)

(1)

 

See Reconciliation of Non-GAAP Financial Measures.

NM

 

Changes +/- 100% are not meaningful

Western Alliance Bancorporation and Subsidiaries

Summary Consolidated Financial Data

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Data:

 

 

 

 

 

 

 

 

At or For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Change %

Diluted earnings per common share

 

$

1.28

 

$

2.22

 

(42.3

) %

Book value per common share

 

 

47.72

 

 

43.56

 

9.6

 

Tangible book value per common share, net of tax (1)

 

 

41.56

 

 

37.13

 

11.9

 

Average common shares outstanding

(in millions):

 

 

 

 

 

 

Basic

 

 

108.2

 

 

106.0

 

2.0

 

Diluted

 

 

108.3

 

 

106.6

 

1.6

 

Common shares outstanding

 

 

109.5

 

 

108.3

 

1.1

 

Selected Performance Ratios:

 

 

 

 

 

 

Return on average assets (2)

 

0.81

%

 

1.64

%

 

(50.6

) %

Return on average tangible common equity (1, 2)

 

12.2

 

 

23.9

 

 

(49.0

)

Return on average tangible common equity, excluding AOCI (1, 2)

 

10.8

 

 

23.6

 

 

(54.2

)

Net interest margin (2)

 

3.79

 

 

3.32

 

 

14.2

 

Efficiency ratio - tax equivalent basis (1)

 

43.2

 

 

43.2

 

 

 

HFI loan to deposit ratio

 

97.6

 

 

78.8

 

 

23.9

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans outstanding (2)

 

0.05

%

 

0.00

%

 

NM

 

Nonaccrual loans to funded HFI loans

 

0.23

 

 

0.22

 

 

4.5

 

Nonaccrual loans and repossessed assets to total assets

 

0.17

 

 

0.17

 

 

0.0

 

Allowance for loan losses to funded HFI loans

 

0.66

 

 

0.63

 

 

4.8

 

Allowance for loan losses to nonaccrual HFI loans

 

286

 

 

283

 

 

1.0

 

Capital Ratios:

 

 

 

 

 

 

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

Tangible common equity (1)

 

6.5

%

 

6.5

%

 

6.7

%

Common Equity Tier 1 (3)

 

9.4

 

 

9.3

 

 

9.0

 

Tier 1 Leverage ratio (3)

 

7.8

 

 

7.8

 

 

8.0

 

Tier 1 Capital (3)

 

10.1

 

 

10.0

 

 

9.8

 

Total Capital (3)

 

12.1

 

 

12.1

 

 

12.0

 

(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 March 31, 2023 are preliminary.

NM

 

Changes +/- 100% are not meaningful.

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

Condensed Consolidated Income Statements

 

 

 

 

Unaudited

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

 

2022

 

 

 

(dollars in millions, except per share data)

Interest income:

 

 

 

 

Loans

 

$

832.7

 

 

$

434.7

 

Investment securities

 

 

96.1

 

 

 

48.0

 

Other

 

 

40.1

 

 

 

1.8

 

Total interest income

 

 

968.9

 

 

 

484.5

 

Interest expense:

 

 

 

 

Deposits

 

 

231.6

 

 

 

14.1

 

Qualifying debt

 

 

9.3

 

 

 

8.4

 

Borrowings

 

 

118.1

 

 

 

12.5

 

Total interest expense

 

 

359.0

 

 

 

35.0

 

Net interest income

 

 

609.9

 

 

 

449.5

 

Provision for credit losses

 

 

19.4

 

 

 

9.0

 

Net interest income after provision for credit losses

 

 

590.5

 

 

 

440.5

 

Non-interest income:

 

 

 

 

Net loan servicing revenue

 

 

41.9

 

 

 

41.1

 

Net gain on loan origination and sale activities

 

 

31.4

 

 

 

36.9

 

Service charges and fees

 

 

9.5

 

 

 

7.0

 

Commercial banking related income

 

 

6.2

 

 

 

5.1

 

Gain on recovery from credit guarantees

 

 

3.3

 

 

 

2.3

 

Income from equity investments

 

 

1.4

 

 

 

4.1

 

(Loss) gain on sales of investment securities

 

 

(12.5

)

 

 

6.9

 

Fair value loss adjustments, net

 

 

(147.8

)

 

 

(6.6

)

Other

 

 

8.6

 

 

 

9.5

 

Total non-interest income

 

 

(58.0

)

 

 

106.3

 

Non-interest expenses:

 

 

 

 

Salaries and employee benefits

 

 

148.9

 

 

 

138.3

 

Deposit costs

 

 

86.9

 

 

 

9.3

 

Data processing

 

 

26.4

 

 

 

17.6

 

Legal, professional, and directors' fees

 

 

23.1

 

 

 

24.0

 

Occupancy

 

 

16.5

 

 

 

12.8

 

Insurance

 

 

15.7

 

 

 

7.2

 

Loan servicing expenses

 

 

13.8

 

 

 

10.8

 

Business development and marketing

 

 

5.2

 

 

 

4.4

 

Loan acquisition and origination expenses

 

 

4.4

 

 

 

6.5

 

Gain on extinguishment of debt

 

 

(12.7

)

 

 

 

Net loss on sales and valuations of repossessed and other assets

 

 

 

 

 

0.1

 

Other

 

 

19.7

 

 

 

17.6

 

Total non-interest expense

 

 

347.9

 

 

 

248.6

 

Income before income taxes

 

 

184.6

 

 

 

298.2

 

Income tax expense

 

 

42.4

 

 

 

58.1

 

Net income

 

 

142.2

 

 

 

240.1

 

Dividends on preferred stock

 

 

3.2

 

 

 

3.2

 

Net income available to common stockholders

 

$

139.0

 

 

$

236.9

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

Diluted shares

 

 

108.3

 

 

 

106.6

 

Diluted earnings per share

 

$

1.28

 

 

$

2.22

 

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

 

 

Five Quarter Condensed Consolidated Income Statements

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Sep 30, 2022

 

Jun 30, 2022

 

Mar 31, 2022

 

 

(in millions, except per share data)

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

832.7

 

 

$

785.1

 

 

$

657.0

 

 

$

516.6

 

 

$

434.7

 

Investment securities

 

 

96.1

 

 

 

89.4

 

 

 

75.9

 

 

 

59.3

 

 

 

48.0

 

Other

 

 

40.1

 

 

 

13.8

 

 

 

6.5

 

 

 

3.7

 

 

 

1.8

 

Total interest income

 

 

968.9

 

 

 

888.3

 

 

 

739.4

 

 

 

579.6

 

 

 

484.5

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

231.6

 

 

 

157.6

 

 

 

77.6

 

 

 

27.1

 

 

 

14.1

 

Qualifying debt

 

 

9.3

 

 

 

9.1

 

 

 

8.9

 

 

 

8.6

 

 

 

8.4

 

Borrowings

 

 

118.1

 

 

 

81.9

 

 

 

50.8

 

 

 

18.9

 

 

 

12.5

 

Total interest expense

 

 

359.0

 

 

 

248.6

 

 

 

137.3

 

 

 

54.6

 

 

 

35.0

 

Net interest income

 

 

609.9

 

 

 

639.7

 

 

 

602.1

 

 

 

525.0

 

 

 

449.5

 

Provision for credit losses

 

 

19.4

 

 

 

3.1

 

 

 

28.5

 

 

 

27.5

 

 

 

9.0

 

Net interest income after provision for credit losses

 

 

590.5

 

 

 

636.6

 

 

 

573.6

 

 

 

497.5

 

 

 

440.5

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

Net loan servicing revenue

 

 

41.9

 

 

 

21.4

 

 

 

23.0

 

 

 

45.4

 

 

 

41.1

 

Net gain on loan origination and sale activities

 

 

31.4

 

 

 

25.4

 

 

 

14.5

 

 

 

27.2

 

 

 

36.9

 

Service charges and fees

 

 

9.5

 

 

 

5.9

 

 

 

6.5

 

 

 

7.6

 

 

 

7.0

 

Commercial banking related income

 

 

6.2

 

 

 

5.5

 

 

 

5.1

 

 

 

5.8

 

 

 

5.1

 

Gain on recovery from credit guarantees

 

 

3.3

 

 

 

3.0

 

 

 

0.4

 

 

 

9.0

 

 

 

2.3

 

Income from equity investments

 

 

1.4

 

 

 

4.2

 

 

 

4.3

 

 

 

5.2

 

 

 

4.1

 

(Loss) gain on sales of investment securities

 

 

(12.5

)

 

 

0.1

 

 

 

 

 

 

(0.2

)

 

 

6.9

 

Fair value loss adjustments, net

 

 

(147.8

)

 

 

(9.2

)

 

 

(2.8

)

 

 

(10.0

)

 

 

(6.6

)

Other

 

 

8.6

 

 

 

5.2

 

 

 

10.8

 

 

 

5.0

 

 

 

9.5

 

Total non-interest income

 

 

(58.0

)

 

 

61.5

 

 

 

61.8

 

 

 

95.0

 

 

 

106.3

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

148.9

 

 

 

125.7

 

 

 

136.5

 

 

 

139.0

 

 

 

138.3

 

Deposit costs

 

 

86.9

 

 

 

82.2

 

 

 

56.2

 

 

 

18.1

 

 

 

9.3

 

Data processing

 

 

26.4

 

 

 

23.9

 

 

 

21.8

 

 

 

19.7

 

 

 

17.6

 

Legal, professional, and directors' fees

 

 

23.1

 

 

 

26.0

 

 

 

24.8

 

 

 

25.1

 

 

 

24.0

 

Occupancy

 

 

16.5

 

 

 

15.8

 

 

 

13.9

 

 

 

13.0

 

 

 

12.8

 

Insurance

 

 

15.7

 

 

 

8.9

 

 

 

8.1

 

 

 

6.9

 

 

 

7.2

 

Loan servicing expenses

 

 

13.8

 

 

 

14.8

 

 

 

15.2

 

 

 

14.7

 

 

 

10.8

 

Business development and marketing

 

 

5.2

 

 

 

7.3

 

 

 

5.0

 

 

 

5.4

 

 

 

4.4

 

Loan acquisition and origination expenses

 

 

4.4

 

 

 

4.4

 

 

 

5.8

 

 

 

6.4

 

 

 

6.5

 

Net (gain) loss on sales and valuations of repossessed and other assets

 

 

 

 

 

(0.3

)

 

 

(0.2

)

 

 

(0.3

)

 

 

0.1

 

Gain on extinguishment of debt

 

 

(12.7

)

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

19.7

 

 

 

24.7

 

 

 

18.7

 

 

 

20.9

 

 

 

17.6

 

Total non-interest expense

 

 

347.9

 

 

 

333.4

 

 

 

305.8

 

 

 

268.9

 

 

 

248.6

 

Income before income taxes

 

 

184.6

 

 

 

364.7

 

 

 

329.6

 

 

 

323.6

 

 

 

298.2

 

Income tax expense

 

 

42.4

 

 

 

71.7

 

 

 

65.6

 

 

 

63.4

 

 

 

58.1

 

Net income

 

 

142.2

 

 

 

293.0

 

 

 

264.0

 

 

 

260.2

 

 

 

240.1

 

Dividends on preferred stock

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

 

 

3.2

 

Net income available to common stockholders

 

$

139.0

 

 

$

289.8

 

 

$

260.8

 

 

$

257.0

 

 

$

236.9

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

Diluted shares

 

 

108.3

 

 

 

108.4

 

 

 

107.9

 

 

 

107.7

 

 

 

106.6

 

Diluted earnings per share

 

$

1.28

 

 

$

2.67

 

 

$

2.42

 

 

$

2.39

 

 

$

2.22

 

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Five Quarter Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Sep 30, 2022

 

Jun 30, 2022

 

Mar 31, 2022

 

 

(in millions)

Assets:

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

3,639

 

 

$

1,043

 

 

$

1,610

 

 

$

1,886

 

 

$

2,602

 

Investment securities

 

 

9,493

 

 

 

8,760

 

 

 

8,603

 

 

 

8,802

 

 

 

8,277

 

Loans held for sale

 

 

7,022

 

 

 

1,184

 

 

 

2,204

 

 

 

2,803

 

 

 

4,762

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

15,503

 

 

 

20,710

 

 

 

22,318

 

 

 

20,754

 

 

 

17,862

 

Commercial real estate - non-owner occupied

 

 

9,617

 

 

 

9,319

 

 

 

8,668

 

 

 

7,775

 

 

 

6,849

 

Commercial real estate - owner occupied

 

 

1,809

 

 

 

1,818

 

 

 

1,848

 

 

 

1,848

 

 

 

1,805

 

Construction and land development

 

 

4,407

 

 

 

4,013

 

 

 

3,621

 

 

 

3,231

 

 

 

3,278

 

Residential real estate

 

 

15,024

 

 

 

15,928

 

 

 

15,674

 

 

 

14,908

 

 

 

11,270

 

Consumer

 

 

75

 

 

 

74

 

 

 

72

 

 

 

56

 

 

 

55

 

Loans HFI, net of deferred fees

 

 

46,435

 

 

 

51,862

 

 

 

52,201

 

 

 

48,572

 

 

 

41,119

 

Allowance for loan losses

 

 

(305

)

 

 

(310

)

 

 

(304

)

 

 

(273

)

 

 

(258

)

Loans HFI, net of deferred fees and allowance

 

 

46,130

 

 

 

51,552

 

 

 

51,897

 

 

 

48,299

 

 

 

40,861

 

Mortgage servicing rights

 

 

910

 

 

 

1,148

 

 

 

1,044

 

 

 

826

 

 

 

950

 

Premises and equipment, net

 

 

293

 

 

 

276

 

 

 

237

 

 

 

210

 

 

 

196

 

Operating lease right-of-use asset

 

 

156

 

 

 

163

 

 

 

131

 

 

 

136

 

 

 

142

 

Other assets acquired through foreclosure, net

 

 

11

 

 

 

11

 

 

 

11

 

 

 

12

 

 

 

12

 

Bank owned life insurance

 

 

183

 

 

 

182

 

 

 

181

 

 

 

180

 

 

 

179

 

Goodwill and other intangibles, net

 

 

677

 

 

 

680

 

 

 

682

 

 

 

695

 

 

 

698

 

Other assets

 

 

2,533

 

 

 

2,735

 

 

 

2,565

 

 

 

2,206

 

 

 

1,897

 

Total assets

 

$

71,047

 

 

$

67,734

 

 

$

69,165

 

 

$

66,055

 

 

$

60,576

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

$

16,465

 

 

$

19,691

 

 

$

24,926

 

 

$

23,721

 

 

$

23,520

 

Interest bearing:

 

 

 

 

 

 

 

 

 

 

Demand

 

 

10,719

 

 

 

9,507

 

 

 

8,350

 

 

 

8,387

 

 

 

8,268

 

Savings and money market

 

 

13,845

 

 

 

19,397

 

 

 

19,202

 

 

 

19,026

 

 

 

18,553

 

Certificates of deposit

 

 

6,558

 

 

 

5,049

 

 

 

3,111

 

 

 

2,578

 

 

 

1,818

 

Total deposits

 

 

47,587

 

 

 

53,644

 

 

 

55,589

 

 

 

53,712

 

 

 

52,159

 

Borrowings

 

 

15,853

 

 

 

6,299

 

 

 

6,319

 

 

 

5,210

 

 

 

833

 

Qualifying debt

 

 

895

 

 

 

893

 

 

 

889

 

 

 

891

 

 

 

893

 

Operating lease liability

 

 

184

 

 

 

185

 

 

 

149

 

 

 

151

 

 

 

155

 

Accrued interest payable and other liabilities

 

 

1,007

 

 

 

1,357

 

 

 

1,198

 

 

 

1,132

 

 

 

1,524

 

Total liabilities

 

 

65,526

 

 

 

62,378

 

 

 

64,144

 

 

 

61,096

 

 

 

55,564

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

 

 

295

 

Common stock and additional paid-in capital

 

 

2,054

 

 

 

2,058

 

 

 

2,049

 

 

 

1,990

 

 

 

1,979

 

Retained earnings

 

 

3,764

 

 

 

3,664

 

 

 

3,413

 

 

 

3,192

 

 

 

2,973

 

Accumulated other comprehensive (loss) income

 

 

(592

)

 

 

(661

)

 

 

(736

)

 

 

(518

)

 

 

(235

)

Total stockholders' equity

 

 

5,521

 

 

 

5,356

 

 

 

5,021

 

 

 

4,959

 

 

 

5,012

 

Total liabilities and stockholders' equity

 

$

71,047

 

 

$

67,734

 

 

$

69,165

 

 

$

66,055

 

 

$

60,576

 

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Changes in the Allowance For Credit Losses on Loans

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Sep 30, 2022

 

Jun 30, 2022

 

Mar 31, 2022

 

 

(in millions)

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

309.7

 

 

$

304.1

 

 

$

273.2

 

 

$

257.6

 

 

$

252.5

 

Provision for credit losses (1)

 

 

1.0

 

 

 

7.4

 

 

 

29.0

 

 

 

17.0

 

 

 

5.3

 

Recoveries of loans previously charged-off:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3.2

 

 

 

0.3

 

 

 

3.8

 

 

 

0.8

 

 

 

2.4

 

Commercial real estate - non-owner occupied

 

 

 

 

 

 

 

 

0.1

 

 

 

 

 

 

 

Commercial real estate - owner occupied

 

 

 

 

 

0.1

 

 

 

 

 

 

0.1

 

 

 

 

Construction and land development

 

 

 

 

 

 

 

 

0.1

 

 

 

 

 

 

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

0.1

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total recoveries

 

 

3.2

 

 

 

0.4

 

 

 

4.0

 

 

 

1.0

 

 

 

2.4

 

Loans charged-off:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

9.1

 

 

 

1.1

 

 

 

2.1

 

 

 

2.4

 

 

 

2.6

 

Commercial real estate - non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate - owner occupied

 

 

 

 

 

0.5

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

 

 

 

 

0.6

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans charged-off

 

 

9.2

 

 

 

2.2

 

 

 

2.1

 

 

 

2.4

 

 

 

2.6

 

Net loan charge-offs (recoveries)

 

 

6.0

 

 

 

1.8

 

 

 

(1.9

)

 

 

1.4

 

 

 

0.2

 

Balance, end of period

 

$

304.7

 

 

$

309.7

 

 

$

304.1

 

 

$

273.2

 

 

$

257.6

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for unfunded loan commitments

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

47.0

 

 

$

52.1

 

 

$

53.8

 

 

$

43.3

 

 

$

37.6

 

(Recovery of) provision for credit losses (1)

 

 

(2.2

)

 

 

(5.1

)

 

 

(1.7

)

 

 

10.5

 

 

 

5.7

 

Balance, end of period (2)

 

$

44.8

 

 

$

47.0

 

 

$

52.1

 

 

$

53.8

 

 

$

43.3

 

 

 

 

 

 

 

 

 

 

 

 

Components of the allowance for credit losses on loans

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

304.7

 

 

$

309.7

 

 

$

304.1

 

 

$

273.2

 

 

$

257.6

 

Allowance for unfunded loan commitments

 

 

44.8

 

 

 

47.0

 

 

 

52.1

 

 

 

53.8

 

 

 

43.3

 

Total allowance for credit losses on loans

 

$

349.5

 

 

$

356.7

 

 

$

356.2

 

 

$

327.0

 

 

$

300.9

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans - annualized

 

 

0.05

%

 

 

0.01

%

 

 

(0.02

) %

 

 

0.01

%

 

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

Allowance ratios

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to funded HFI loans (3)

 

 

0.66

%

 

 

0.60

%

 

 

0.58

%

 

 

0.56

%

 

 

0.63

%

Allowance for credit losses to funded HFI loans (3)

 

 

0.75

 

 

 

0.69

 

 

 

0.68

 

 

 

0.67

 

 

 

0.73

 

Allowance for loan losses to nonaccrual HFI loans

 

 

286

 

 

 

364

 

 

 

338

 

 

 

321

 

 

 

283

 

Allowance for credit losses to nonaccrual HFI loans

 

 

327

 

 

 

420

 

 

 

396

 

 

 

385

 

 

 

331

 

(1)

The above tables reflect the provision for credit losses on funded and unfunded loans. There was a $19.3 million and $1.3 million provision for credit losses on AFS and HTM investment securities, respectively, for the three months ended March 31, 2023. The allowance for credit losses on AFS and HTM investment securities totaled $2.2 million and $6.5 million, respectively, as of March 31, 2023.

(2)

The allowance for unfunded loan commitments is included as part of accrued interest payable and other liabilities on the balance sheet.

(3)

Ratio includes an allowance for credit losses of $20.8 million as of March 31, 2023 related to a pool of loans covered under four separate credit linked note transactions.

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Asset Quality Metrics

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar 31, 2023

 

Dec 31, 2022

 

Sep 30, 2022

 

Jun 30, 2022

 

Mar 31, 2022

 

 

(in millions)

Nonaccrual loans and repossessed assets

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

107

 

 

$

85

 

 

$

90

 

 

$

85

 

 

$

91

 

Nonaccrual loans to funded HFI loans

 

 

0.23

%

 

 

0.16

%

 

 

0.17

%

 

 

0.17

%

 

 

0.22

%

Repossessed assets

 

$

11

 

 

$

11

 

 

$

11

 

 

$

12

 

 

$

12

 

Nonaccrual loans and repossessed assets to total assets

 

 

0.17

%

 

 

0.14

%

 

 

0.15

%

 

 

0.15

%

 

 

0.17

%

 

 

 

 

 

 

 

 

 

 

 

Loans Past Due

 

 

 

 

 

 

 

 

 

 

Loans past due 90 days, still accruing (1)

 

$

1

 

 

$

 

 

$

 

 

$

 

 

$

 

Loans past due 90 days, still accruing to funded HFI loans

 

 

%

 

 

%

 

 

%

 

 

%

 

 

%

Loans past due 30 to 89 days, still accruing (2)

 

$

58

 

 

$

70

 

 

$

56

 

 

$

117

 

 

$

58

 

Loans past due 30 to 89 days, still accruing to funded HFI loans

 

 

0.13

%

 

 

0.13

%

 

 

0.11

%

 

 

0.24

%

 

 

0.14

%

 

 

 

 

 

 

 

 

 

 

 

Other credit quality metrics

 

 

 

 

 

 

 

 

 

 

Special mention loans

 

$

320

 

 

$

351

 

 

$

312

 

 

$

317

 

 

$

350

 

Special mention loans to funded HFI loans

 

 

0.69

%

 

 

0.68

%

 

 

0.60

%

 

 

0.65

%

 

 

0.85

%

 

 

 

 

 

 

 

 

 

 

 

Classified loans on accrual

 

$

325

 

 

$

280

 

 

$

268

 

 

$

232

 

 

$

253

 

Classified loans on accrual to funded HFI loans

 

 

0.70

%

 

 

0.54

%

 

 

0.51

%

 

 

0.48

%

 

 

0.61

%

Classified assets

 

$

459

 

 

$

393

 

 

$

385

 

 

$

346

 

 

$

365

 

Classified assets to total assets

 

 

0.65

%

 

 

0.58

%

 

 

0.56

%

 

 

0.52

%

 

 

0.60

%

(1)

Excludes government guaranteed residential mortgage loans of $494 million, $582 million, $644 million, and $827 million as of March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.

(2)

Excludes government guaranteed residential mortgage loans of $281 million, $334 million, $245 million, and $202 million as of March 31, 2023, 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

 

 

March 31, 2023

 

December 31, 2022

 

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

 

($ in millions)

 

 

 

($ in millions)

 

 

Interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

2,153

 

 

$

31.3

 

5.90

%

 

$

2,659

 

 

$

37.8

 

5.63

%

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

20,481

 

 

 

368.2

 

7.35

 

 

 

21,654

 

 

 

349.3

 

6.45

 

CRE - non-owner occupied

 

 

9,520

 

 

 

169.4

 

7.22

 

 

 

9,077

 

 

 

148.8

 

6.51

 

CRE - owner occupied

 

 

1,809

 

 

 

24.6

 

5.62

 

 

 

1,830

 

 

 

24.4

 

5.39

 

Construction and land development

 

 

4,230

 

 

 

93.3

 

8.94

 

 

 

3,798

 

 

 

80.2

 

8.38

 

Residential real estate

 

 

15,839

 

 

 

144.7

 

3.71

 

 

 

15,803

 

 

 

143.5

 

3.60

 

Consumer

 

 

73

 

 

 

1.2

 

6.82

 

 

 

71

 

 

 

1.1

 

6.26

 

Total HFI loans (1), (2), (3)

 

 

51,952

 

 

 

801.4

 

6.28

 

 

 

52,233

 

 

 

747.3

 

5.70

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Securities - taxable

 

 

6,658

 

 

 

75.2

 

4.58

 

 

 

6,397

 

 

 

68.4

 

4.25

 

Securities - tax-exempt

 

 

2,117

 

 

 

20.9

 

5.00

 

 

 

2,068

 

 

 

21.0

 

5.07

 

Total securities (1)

 

 

8,775

 

 

 

96.1

 

4.68

 

 

 

8,465

 

 

 

89.4

 

4.45

 

Cash and other

 

 

3,331

 

 

 

40.1

 

4.88

 

 

 

1,361

 

 

 

13.8

 

4.02

 

Total interest earning assets

 

 

66,211

 

 

 

968.9

 

5.99

 

 

 

64,718

 

 

 

888.3

 

5.50

 

Non-interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

265

 

 

 

 

 

 

 

289

 

 

 

 

 

Allowance for credit losses

 

 

(315

)

 

 

 

 

 

 

(308

)

 

 

 

 

Bank owned life insurance

 

 

182

 

 

 

 

 

 

 

181

 

 

 

 

 

Other assets

 

 

4,931

 

 

 

 

 

 

 

4,613

 

 

 

 

 

Total assets

 

$

71,274

 

 

 

 

 

 

$

69,493

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

10,534

 

 

$

68.2

 

2.63

%

 

$

8,754

 

 

$

43.6

 

1.98

%

Savings and money market

 

 

18,066

 

 

 

115.5

 

2.59

 

 

 

18,651

 

 

 

88.0

 

1.87

 

Certificates of deposit

 

 

5,520

 

 

 

47.9

 

3.52

 

 

 

4,260

 

 

 

26.0

 

2.42

 

Total interest-bearing deposits

 

 

34,120

 

 

 

231.6

 

2.75

 

 

 

31,665

 

 

 

157.6

 

1.97

 

Short-term borrowings

 

 

7,288

 

 

 

87.5

 

4.87

 

 

 

5,440

 

 

 

54.8

 

3.99

 

Long-term debt

 

 

1,275

 

 

 

30.6

 

9.73

 

 

 

1,240

 

 

 

27.1

 

8.68

 

Qualifying debt

 

 

893

 

 

 

9.3

 

4.24

 

 

 

890

 

 

 

9.1

 

4.08

 

Total interest-bearing liabilities

 

 

43,576

 

 

 

359.0

 

3.34

 

 

 

39,235

 

 

 

248.6

 

2.51

 

Interest cost of funding earning assets

 

 

 

2.20

 

 

 

 

 

 

1.52

 

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

 

20,521

 

 

 

 

 

 

 

23,729

 

 

 

 

 

Other liabilities

 

 

1,589

 

 

 

 

 

 

 

1,296

 

 

 

 

 

Stockholders’ equity

 

 

5,588

 

 

 

 

 

 

 

5,233

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

71,274

 

 

 

 

 

 

$

69,493

 

 

 

 

 

Net interest income and margin (4)

 

 

 

$

609.9

 

3.79

%

 

 

 

$

639.7

 

3.98

%

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $8.8 million and $9.0 million for the three months ended March 31, 2023 and December 31, 2022, respectively.

(2)

Included in the yield computation are net loan fees of $35.6 million and $34.8 million for the three months ended March 31, 2023 and December 31, 2022, respectively.

(3)

Includes non-accrual loans.

(4)

Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis.

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

 

 

Analysis of Average Balances, Yields and Rates

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31, 2023

 

March 31, 2022

 

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

Average

Balance

 

Interest

 

Average Yield /

Cost

 

 

($ in millions)

 

 

 

($ in millions)

 

 

Interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

2,153

 

 

$

31.3

 

5.90

%

 

$

6,522

 

 

$

50.4

 

3.14

%

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

20,481

 

 

 

368.2

 

7.35

 

 

 

17,487

 

 

 

165.9

 

3.91

 

CRE - non-owner-occupied

 

 

9,520

 

 

 

169.4

 

7.22

 

 

 

6,690

 

 

 

73.2

 

4.44

 

CRE - owner-occupied

 

 

1,809

 

 

 

24.6

 

5.62

 

 

 

1,859

 

 

 

22.8

 

5.07

 

Construction and land development

 

 

4,230

 

 

 

93.3

 

8.94

 

 

 

3,090

 

 

 

41.7

 

5.47

 

Residential real estate

 

 

15,839

 

 

 

144.7

 

3.71

 

 

 

10,384

 

 

 

80.2

 

3.13

 

Consumer

 

 

73

 

 

 

1.2

 

6.82

 

 

 

52

 

 

 

0.5

 

3.95

 

Total HFI loans (1), (2), (3)

 

 

51,952

 

 

 

801.4

 

6.28

 

 

 

39,562

 

 

 

384.3

 

3.98

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Securities - taxable

 

 

6,658

 

 

 

75.2

 

4.58

 

 

 

5,534

 

 

 

29.9

 

2.19

 

Securities - tax-exempt

 

 

2,117

 

 

 

20.9

 

5.00

 

 

 

2,136

 

 

 

18.1

 

4.29

 

Total securities (1)

 

 

8,775

 

 

 

96.1

 

4.68

 

 

 

7,670

 

 

 

48.0

 

2.77

 

Cash and other

 

 

3,331

 

 

 

40.1

 

4.88

 

 

 

2,057

 

 

 

1.8

 

0.36

 

Total interest earning assets (4)

 

 

66,211

 

 

 

968.9

 

5.99

 

 

 

55,811

 

 

 

484.5

 

3.58

 

Non-interest earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

265

 

 

 

 

 

 

 

245

 

 

 

 

 

Allowance for credit losses

 

 

(315

)

 

 

 

 

 

 

(262

)

 

 

 

 

Bank owned life insurance

 

 

182

 

 

 

 

 

 

 

181

 

 

 

 

 

Other assets

 

 

4,931

 

 

 

 

 

 

 

3,299

 

 

 

 

 

Total assets

 

$

71,274

 

 

 

 

 

 

$

59,274

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

10,534

 

 

$

68.2

 

2.63

%

 

$

7,743

 

 

$

2.7

 

0.14

%

Savings and money market accounts

 

 

18,066

 

 

 

115.5

 

2.59

 

 

 

18,131

 

 

 

9.6

 

0.21

 

Certificates of deposit

 

 

5,520

 

 

 

47.9

 

3.52

 

 

 

1,920

 

 

 

1.8

 

0.38

 

Total interest-bearing deposits

 

 

34,120

 

 

 

231.6

 

2.75

 

 

 

27,794

 

 

 

14.1

 

0.21

 

Short-term borrowings

 

 

7,288

 

 

 

87.5

 

4.87

 

 

 

1,150

 

 

 

1.7

 

0.62

 

Long-term debt

 

 

1,275

 

 

 

30.6

 

9.73

 

 

 

770

 

 

 

10.8

 

5.67

 

Qualifying debt

 

 

893

 

 

 

9.3

 

4.24

 

 

 

896

 

 

 

8.4

 

3.81

 

Total interest-bearing liabilities

 

 

43,576

 

 

 

359.0

 

3.34

 

 

 

30,610

 

 

 

35.0

 

0.46

 

Interest cost of funding earning assets

 

 

 

2.20

 

 

 

 

 

 

0.26

 

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

 

20,521

 

 

 

 

 

 

 

22,580

 

 

 

 

 

Other liabilities

 

 

1,589

 

 

 

 

 

 

 

1,095

 

 

 

 

 

Stockholders’ equity

 

 

5,588

 

 

 

 

 

 

 

4,989

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

71,274

 

 

 

 

 

 

$

59,274

 

 

 

 

 

Net interest income and margin (5)

 

 

 

$

609.9

 

3.79

%

 

 

 

$

449.5

 

3.32

%

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $8.8 million and $8.0 million for the three months ended March 31, 2023 and 2022, respectively.

(2)

Included in the yield computation are net loan fees of $35.6 million and $29.1 million for the three months ended March 31, 2023 and 2022, respectively.

(3)

Includes non-accrual loans.

(4)

Net interest margin is computed by dividing net interest income by total average earning assets, annualized on an actual/actual basis.

Western Alliance Bancorporation and Subsidiaries

 

 

 

 

 

 

Operating Segment Results

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet:

 

 

 

 

 

 

 

 

 

 

Consolidated

Company

 

Commercial

 

Consumer

Related

 

Corporate &

Other

At March 31, 2023:

 

(dollars in millions)

Assets:

 

 

 

 

 

 

 

 

Cash, cash equivalents, and investment securities

 

$

13,132

 

 

$

12

 

 

$

 

 

$

13,120

 

Loans HFS

 

 

7,022

 

 

 

4,732

 

 

 

2,290

 

 

 

 

Loans HFI, net of deferred fees and costs

 

 

46,435

 

 

 

27,282

 

 

 

19,153

 

 

 

 

Less: allowance for credit losses

 

 

(305

)

 

 

(255

)

 

 

(50

)

 

 

 

Net loans HFI

 

 

46,130

 

 

 

27,027

 

 

 

19,103

 

 

 

 

Other assets acquired through foreclosure, net

 

 

11

 

 

 

11

 

 

 

 

 

 

 

Goodwill and other intangible assets, net

 

 

677

 

 

 

293

 

 

 

384

 

 

 

 

Other assets

 

 

4,075

 

 

 

550

 

 

 

1,703

 

 

 

1,822

 

Total assets

 

$

71,047

 

 

$

32,625

 

 

$

23,480

 

 

$

14,942

 

Liabilities:

 

 

 

 

 

 

 

 

Deposits

 

$

47,587

 

 

$

21,991

 

 

$

20,017

 

 

$

5,579

 

Borrowings and qualifying debt

 

 

16,748

 

 

 

8

 

 

 

927

 

 

 

15,813

 

Other liabilities

 

 

1,191

 

 

 

97

 

 

 

302

 

 

 

792

 

Total liabilities

 

 

65,526

 

 

 

22,096

 

 

 

21,246

 

 

 

22,184

 

Allocated equity:

 

 

5,521

 

 

 

2,545

 

 

 

1,613

 

 

 

1,363

 

Total liabilities and stockholders' equity

 

$

71,047

 

 

$

24,641

 

 

$

22,859

 

 

$

23,547

 

Excess funds provided (used)

 

 

 

 

 

(7,984

)

 

 

(621

)

 

 

8,605

 

 

 

 

 

 

 

 

 

 

No. of offices

 

 

57

 

 

 

47

 

 

 

8

 

 

 

2

 

No. of full-time equivalent employees

 

 

3,340

 

 

 

678

 

 

 

731

 

 

 

1,931

 

 

 

 

 

 

 

 

 

 

Income Statement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023:

 

(in millions)

Net interest income

 

$

609.9

 

 

$

389.4

 

 

$

199.3

 

 

$

21.2

 

Provision for (recovery of) credit losses

 

 

19.4

 

 

 

(2.7

)

 

 

1.5

 

 

 

20.6

 

Net interest income (expense) after provision for credit losses

 

 

590.5

 

 

 

392.1

 

 

 

197.8

 

 

 

0.6

 

Non-interest income

 

 

(58.0

)

 

 

(96.7

)

 

 

51.0

 

 

 

(12.3

)

Non-interest expense

 

 

347.9

 

 

 

136.0

 

 

 

192.0

 

 

 

19.9

 

Income (loss) before income taxes

 

 

184.6

 

 

 

159.4

 

 

 

56.8

 

 

 

(31.6

)

Income tax expense (benefit)

 

 

42.4

 

 

 

38.5

 

 

 

12.8

 

 

 

(8.9

)

Net income (loss)

 

$

142.2

 

 

$

120.9

 

 

$

44.0

 

 

$

(22.7

)

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 March 31, 2022:

 

(in millions)

Net interest income

 

$

449.5

 

 

$

334.9

 

 

$

183.2

 

 

$

(68.6

)

Provision for (recovery of) credit losses

 

 

9.0

 

 

 

0.6

 

 

 

10.5

 

 

 

(2.1

)

Net interest income (expense) after provision for credit losses

 

 

440.5

 

 

 

334.3

 

 

 

172.7

 

 

 

(66.5

)

Non-interest income

 

 

106.3

 

 

 

16.9

 

 

 

79.2

 

 

 

10.2

 

Non-interest expense

 

 

248.6

 

 

 

114.4

 

 

 

125.0

 

 

 

9.2

 

Income (loss) before income taxes

 

 

298.2

 

 

 

236.8

 

 

 

126.9

 

 

 

(65.5

)

Income tax expense (benefit)

 

 

58.1

 

 

 

56.2

 

 

 

30.4

 

 

 

(28.5

)

Net income (loss)

 

$

240.1

 

 

$

180.6

 

 

$

96.5

 

 

$

(37.0

)

Western Alliance Bancorporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Unaudited

Pre-Provision Net Revenue by Quarter:

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

(in millions)

Net interest income

$

609.9

 

 

$

639.7

 

 

$

602.1

 

$

525.0

 

$

449.5

 

Total non-interest income

 

(58.0

)

 

 

61.5

 

 

 

61.8

 

 

95.0

 

 

106.3

 

Adjusted for:

 

 

 

 

 

 

 

 

 

Loss (gain) on sales of investment securities

 

12.5

 

 

 

(0.1

)

 

 

 

 

0.2

 

 

(6.9

)

Fair value loss adjustments, net

 

147.8

 

 

 

9.2

 

 

 

2.8

 

 

10.0

 

 

6.6

 

Total non-interest income, adjusted

$

102.3

 

 

$

70.6

 

 

$

64.6

 

$

105.2

 

$

106.0

 

Net revenue, adjusted

$

712.2

 

 

$

710.3

 

 

$

666.7

 

$

630.2

 

$

555.5

 

Total non-interest expense

 

347.9

 

 

 

333.4

 

 

 

305.8

 

 

268.9

 

 

248.6

 

Adjusted for:

 

 

 

 

 

 

 

 

 

Gain on extinguishment of debt

 

12.7

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expense, adjusted

$

360.6

 

 

$

333.4

 

 

$

305.8

 

$

268.9

 

$

248.6

 

Pre-provision net revenue (1)

$

351.6

 

 

$

376.9

 

 

$

360.9

 

$

361.3

 

$

306.9

 

Less:

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

19.4

 

 

 

3.1

 

 

 

28.5

 

 

27.5

 

 

9.0

 

Income tax expense

 

42.4

 

 

 

71.7

 

 

 

65.6

 

 

63.4

 

 

58.1

 

Loss (gain) on sales of investment securities

 

12.5

 

 

 

(0.1

)

 

 

 

 

0.2

 

 

(6.9

)

Fair value loss adjustments, net

 

147.8

 

 

 

9.2

 

 

 

2.8

 

 

10.0

 

 

6.6

 

Plus: Gain on extinguishment of debt

 

12.7

 

 

 

 

 

 

 

 

 

 

 

Net income

$

142.2

 

 

$

293.0

 

 

$

264.0

 

$

260.2

 

$

240.1