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TheStreet Open House

Western Alliance Reports Fourth Quarter 2011 Net Income Of $7.1 Million, Or $0.07 Per Share

Stocks in this article: WAL

Income Statement

Net interest income of $68.7 million in the fourth quarter 2011 increased by 6.4 percent compared to the third quarter 2011 and 12.8 percent compared to the fourth quarter 2010. The net interest margin in the fourth quarter 2011 was 4.51 percent compared to 4.29 percent in the third quarter 2011 and 4.26 percent in the fourth quarter of 2010.

Operating non-interest income was $5.6 million for the fourth quarter 2011, 1 a decrease from $5.9 million for the third quarter of 2011 and $6.0 million for the fourth quarter of 2010. 1

Net revenue was $74.3 million for the fourth quarter 2011, a 5.4 percent increase from $70.5 million for the third quarter of 2011 and 11.1 percent from $66.9 million for the fourth quarter 2010. 1

Operating non-interest expense was $42.8 million for the fourth quarter 2011, compared to $42.4 million for the third quarter of 2011 and $41.9 million for the fourth quarter of 2010. 1 The Company’s operating efficiency ratio on a tax equivalent basis was 56.5 percent for the fourth quarter 2011, improved from 62.2 percent for the fourth quarter 2010. 1

The Company had 942 full-time equivalent employees at December 31, 2011, compared to 908 one year ago.

A key performance metric for the Company is its pre-tax, pre-provision operating earnings, which it defines as net operating revenue less its operating non-interest expense. 1 For the fourth quarter 2011, the Company’s performance on this metric was $31.5 million, up from $28.1 million in the third quarter 2011 and $25.0 million in the fourth quarter 2010. 1

The provision for credit losses was $13.1 million for the fourth quarter 2011 compared to $11.2 million for the third quarter 2011. The provision for the fourth quarter of 2010 was $18.4 million. Net loan charge-offs in the fourth quarter 2011 were $14.1 million or 1.24 percent of average loans (annualized), down from $15.3 million or 1.40 percent of average loans (annualized) for the third quarter 2011 due to decreased residential real estate loan charge-offs. Net charge-offs for the fourth quarter 2010 were $15.9 million or 1.52% of average loans (annualized).

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