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Western Alliance Reports First Quarter 2012 Net Income Of $11.3 Million, Or $0.12 Per Share

Stocks in this article: WAL

We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements set forth in this press release to reflect new information, future events or otherwise.

This press release contains both financial measures based on accounting principles generally accepted in the United States (“GAAP”) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Western Alliance Bancorporation’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement 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.

1 See Reconciliation of Non-GAAP Financial Measures beginning on page 15

Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
    At or for the Three Months
Ended March 31,
2012 2011

Change %

 
Selected Balance Sheet Data:
(dollars in millions)
Total assets $ 6,925.3 $ 6,404.8 8.1 %
Loans, net of deferred fees 4,926.2 4,278.0 15.2
Securities and money market investments 1,423.2 1,319.6 7.9
Total deposits 5,899.1 5,497.5 7.3
Borrowings 307.8 236.4 30.2
Junior subordinated debt 37.3 43.0 (13.3 )
Stockholders' equity 654.1 601.6 8.7
 
Selected Income Statement Data:
(dollars in thousands)
Interest income $ 77,437 $ 71,966 7.6 %
Interest expense   7,380     10,868   (32.1 )
Net interest income 70,057 61,098 14.7
Provision for loan losses   13,081     10,041   30.3
Net interest income after provision for credit losses 56,976 51,057 11.6
Non-interest income 5,884 6,830 (13.9 )
Non-interest expense   46,897     48,146   (2.6 )

Income from continuing operations before income taxes

15,963 9,741 63.9
Income tax expense   4,441     4,029   (10.2 )
Income from continuing operations 11,522 5,712 101.7
Loss on discontinued operations, net   (222 )   (559 ) 60.3
Net income $ 11,300   $ 5,153   119.3 %
Diluted net income per common share from continuing operations $ 0.12   $ 0.04  
Diluted net loss per common share from discontinued operations, net of tax $ 0.00   $ (0.01 )
Diluted net income per common share $ 0.12   $ 0.03   300.0 %
 
Common Share Data:
Diluted net income per common share $ 0.12 $ 0.03 300.0 %
Book value per common share $ 6.17 $ 5.72 7.9 %
Tangible book value per share, net of tax (1) $ 5.79 $ 5.30 9.2 %
Average shares outstanding (in thousands):
Basic 81,359 80,794 0.7
Diluted 82,227 81,013 1.5
Common shares outstanding 83,145 82,237 1.1
(1) See Reconciliation of Non-GAAP Financial Measures
 
 
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data (continued)
Unaudited
At or for the Three Months
Ended March 31,
2012 2011

Change %

(in thousands, except per share data)
 
Selected Performance Ratios:
Return on average assets (1) 0.67 % 0.33 % 103.0 %
Return on average stockholders' equity (1) 6.97 3.41 104.4
Net interest margin (1) 4.53 4.35 4.1
Net interest spread 4.34 4.06 6.9
Efficiency ratio - tax equivalent basis (2) 56.96 61.89 (8.0 )
Loan to deposit ratio 83.51 77.82 7.3
 
Capital Ratios:
Tangible equity (2) 9.0 % 8.8 % 1.6 %
Tangible common equity (2) 6.9 6.8 2.4
Tier one common equity (2) 8.1 8.5 (4.4 )
Tier 1 Leverage ratio (3) 9.8 9.6 2.1
Tier 1 Risk Based Capital (3) 11.3 12.0 (5.8 )
Total Risk Based Capital (3) 12.5 13.2 (5.3 )
 
Asset Quality Ratios:
Net charge-offs to average loans outstanding (1) 1.18 % 1.39 % (15.1 ) %
Nonaccrual loans to gross loans 2.10 2.67 (21.3 )
Nonaccrual loans and repossessed assets to total assets 2.67 3.32 (19.6 )
Loans past due 90 days and still accruing to total loans 0.02 0.03 (33.3 )
Allowance for credit losses to loans 1.99 2.48 (19.8 )
Allowance for credit losses to nonaccrual loans 94.82 92.90 2.1
 
(1) Annualized for the three month periods ended March 31, 2012 and 2011. See table on page 12.
(2) See Reconciliation of Non-GAAP Financial Measures.
(3) Capital ratios are preliminary until Call Reports are filed.
 
 

Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Income Statements
Unaudited     Three Months Ended
March 31,
2012   2011

 

(dollars in thousands)

Interest income:

Loans $ 67,760 $ 63,882
Investment securities 9,585 7,930
Federal funds sold and other   92     154  

Total interest income

  77,437     71,966  
Interest expense:
Deposits 4,762 7,898
Customer repurchase agreements 63 86
Borrowings 2,071 2,182
Junior subordinated and subordinated debt   484     702  
Total interest expense   7,380     10,868  
Net interest income 70,057 61,098
Provision for credit losses   13,081     10,041  
Net interest income after provision for credit losses   56,976     51,057  
Non-interest income

Unrealized gains (losses) on assets/liabilities measured at fair value, net

(333 ) (509 )
Gains on sales of investment securities, net 361 1,379
Investment advisory services 619 636
Service charges 2,285 2,284
Operating lease income 273 671
Bank owned life insurance 1,123 1,184
Other   1,556     1,185  
  5,884     6,830  
Non-interest expenses:
Salaries and employee benefits 26,664 22,840
Occupancy 4,722 4,854
Net loss on sales and valuations of repossessed assets 2,651 6,129
Insurance 2,050 3,863
Loan and repossessed asset expenses 1,684 2,122
Legal, professional and director's fees 1,572 1,366
Marketing 1,371 1,157
Data Processing 995 848
Intangible amortization 890 890
Customer service 591 892
Operating lease depreciation 208 421
Merger/restructure expense - 217
Other   3,499     2,547  
  46,897     48,146  
Income from continuing operations before income taxes 15,963 9,741
Income tax expense   4,441     4,029  
Income from continuing operations 11,522 5,712
Loss from discontinued operations net of tax benefit   (222 )   (559 )
Net income 11,300 5,153
Preferred stock dividends 1,763 1,750
Accretion on preferred stock discount   -     753  
Net income available to common stockholders $ 9,537   $ 2,650  
Diluted net income per share $ 0.12   $ 0.03  
 
 

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Income Statements
Unaudited     Three Months Ended
March 31,   December 31,   September 30,   June 30,   March 31,
2012 2011 2011 2011 2011

 

(in thousands, except per share data)

Interest income:

Loans $ 67,760 $ 67,102 $ 65,540 $ 64,919 $ 63,882
Investment securities 9,585 9,591 8,356 8,542 7,930
Federal funds sold and other   92     153     237     185     154  
Total interest income   77,437     76,846     74,133     73,646     71,966  
Interest expense:
Deposits 4,762 5,549 6,982 7,548 7,898
Borrowings and customer repurchase agreements 2,134 2,126 2,101 2,123 2,268
Junior subordinated and subordinated debt   484     472     465     689     702  
Total interest expense   7,380     8,147     9,548     10,360     10,868  
Net interest income 70,057 68,699 64,585 63,286 61,098
Provision for credit losses   13,081     13,076     11,180     11,891     10,041  
Net interest income after provision for credit losses   56,976     55,623     53,405     51,395     51,057  
Non-interest income
Mark-to-market gains (losses), net (333 ) (626 ) 6,420 336 (509 )
Securities impairment charges - - - (226 ) -
Gains on sales of investment securities, net 361 (28 ) 781 2,666 1,379
Investment advisory services 619 583 661 657 636
Service charges 2,285 2,238 2,337 2,243 2,284
Operating lease income 273 274 353 580 671
Bank owned life insurance 1,123 1,177 1,189 1,822 1,184
Other   1,556     1,330     1,341     1,519     1,185  
  5,884     4,948     13,082     9,597     6,830  
Non-interest expenses:
Salaries and employee benefits 26,664 24,021 23,319 22,960 22,840
Occupancy 4,722 4,948 5,126 5,044 4,854
Insurance 2,050 2,166 2,664 2,352 3,863
Loan and repossessed asset expenses 1,684 1,661 2,059 2,284 2,122
Net loss on sales and valuations of repossessed assets 2,651 7,702 2,128 8,633 6,129
Legal, professional and director's fees 1,572 2,039 1,912 2,361 1,366
Marketing 1,371 1,294 1,090 1,135 1,157
Intangible amortization 890 889 890 890 890
Customer service 591 716 900 828 892
Data Processing 995 895 895 928 848
Operating lease depreciation 208 208 245 327 421
Merger/restructure expense - 482 974 (109 ) 217
Other   3,499     3,942     3,279     3,375     2,547  
  46,897     50,963     45,481     51,008     48,146  
Income from continuing operations before income taxes 15,963 9,608 21,006 9,984 9,741
Income tax expense   4,441     2,011     7,514     3,295     4,029  
Income from continuing operations $ 11,522 $ 7,597 $ 13,492 $ 6,689 $ 5,712
Loss from discontinued operations, net of tax   (222 )   (496 )   (481 )   (460 )   (559 )
Net income $ 11,300   $ 7,101   $ 13,011   $ 6,229   $ 5,153  
Preferred stock dividends 1,763 1,781 1,752 1,750 1,750
Accretion on preferred stock   -     -     7,667     753     753  
Net Income available to common stockholders $ 9,537   $ 5,320     $ 3,592     $ 3,726     $ 2,650  
Diluted net income per share $ 0.12   $ 0.07   $ 0.04   $ 0.05   $ 0.03  
 
 

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Balance Sheets
Unaudited            
March 31, December 31, September 30, June 30, March 31,
2012 2011 2011 2011 2011

 

(in millions)

Assets:

Cash and due from banks $ 179.8 $ 155.0 $ 306.0 $ 534.6 $ 363.3
Federal funds sold   -     -     -     -     -  
Cash and cash equivalents   179.8     155.0     306.0     534.6     363.3  
 
Securities and money market investments 1,423.2 1,490.5 1,304.6 1,138.2 1,319.6
Loans:
Commercial 1,436.5 1,336.6 1,152.9 1,029.5 935.9
Commercial real estate - owner occupied 1,289.9 1,252.2 1,225.4 1,285.3 1,299.5
Construction and land development 347.7 381.7 404.4 396.3 391.7
Commercial real estate - non-owner occupied 1,365.6 1,301.2 1,239.8 1,170.0 1,086.9
Residential real estate 434.5 443.0 450.2 473.9 504.5
Consumer 58.7 72.5 60.3 62.6 65.7
Deferred fees, net   (6.7 )   (7.1 )   (6.5 )   (5.9 )   (6.2 )
4,926.2 4,780.1 4,526.5 4,411.7 4,278.0
Allowance for credit losses   (98.1 )   (99.2 )   (100.2 )   (104.4 )   (106.1 )
Loans, net   4,828.1     4,680.9     4,426.3     4,307.3     4,171.9  
 
Premises and equipment, net 105.1 105.5 106.2 109.2 112.0
Other repossessed assets 81.4 89.1 86.7 85.7 98.3
Bank owned life insurance 135.0 133.9 132.7 131.5 131.0
Goodwill and other intangibles 34.8 35.7 36.6 37.5 38.4
Other assets   137.9     153.9     146.8     164.1     170.3  
Total assets $ 6,925.3   $ 6,844.5   $ 6,545.9   $ 6,508.1   $ 6,404.8  
Liabilities and Stockholders' Equity:
Liabilities:
Deposits:
Non-interest bearing demand deposits $ 1,757.7 $ 1,558.2 $ 1,519.0 $ 1,516.8 $ 1,455.1
Interest bearing
Demand 527.2 482.7 466.0 456.5 521.2
Savings and money market 2,224.1 2,166.6 2,151.9 2,105.4 2,100.6
Time certificates   1,390.1     1,451.0     1,496.0     1,509.6     1,420.6  
Total deposits 5,899.1 5,658.5 5,632.9 5,588.3 5,497.5
Customer repurchase agreements   114.4     123.6     142.6     148.7     163.4  
Total customer funds 6,013.5 5,782.1 5,775.5 5,737.0 5,660.9
Borrowings 193.4 353.3 73.2 73.1 73.0
Junior subordinated debt 37.3 37.0 36.3 42.7 43.0
Accrued interest payable and other liabilities   27.0     35.4     28.6     39.6     26.3  
Total liabilities   6,271.2     6,207.8     5,913.6     5,892.4     5,803.2  
Stockholders' Equity
Common stock and additional paid-in capital 746.2 743.8 743.0 741.6 740.9
Preferred Stock 141.0 141.0 141.0 132.3 131.6
Retained earnings (deficit) (234.0 ) (243.5 ) (248.8 ) (252.4 ) (256.2 )
Accumulated other comprehensive income (loss)   0.9     (4.6 )   (2.9 )   (5.8 )   (14.7 )
Total stockholders' equity   654.1     636.7     632.3     615.7     601.6  
Total liabilities and stockholders' equity $ 6,925.3   $ 6,844.5   $ 6,545.9   $ 6,508.1   $ 6,404.8  
 
 

Western Alliance Bancorporation and Subsidiaries
Changes in the Allowance For Credit Losses
Unaudited
    Three Months Ended
March 31,   December 31,   September 30,   June 30,   March 31,
2012 2011 2011 2011 2011
(in thousands)
 
Balance, beginning of period $ 99,170 $ 100,216 $ 104,375 $ 106,133 $ 110,699
Provision for credit losses 13,081 13,076 11,180 11,891 10,041
Recoveries of loans previously charged-off:
Construction and land development 86 354 707 677 416
Commercial real estate 1,705 755 127 804 471
Residential real estate 340 179 440 172 269
Commercial and industrial 777 603 1,243 726 829
Consumer   38     64     41     44     25  
Total recoveries 2,946 1,955 2,558 2,423 2,010
Loans charged-off:
Construction and land development 5,087 3,155 2,369 1,516 4,198
Commercial real estate 4,912 9,244 2,484 4,286 6,114
Residential real estate 1,420 1,895 10,555 3,339 3,282
Commercial and industrial 3,654 1,004 1,420 5,926 1,407
Consumer   2,002     779     1,069     1,005     1,616  
Total loans charged-off 17,075 16,077 17,897 16,072 16,617
Net loans charged-off   14,129     14,122     15,339     13,649     14,607  
Balance, end of period $ 98,122   $ 99,170   $ 100,216   $ 104,375   $ 106,133  
 
Net charge-offs (annualized) to average loans outstanding 1.18 % 1.24 % 1.40 % 1.26 % 1.39 %
Allowance for credit losses to gross loans 1.99 2.07 2.21 2.37 2.48
Nonaccrual loans $ 103,486 $ 90,392 $ 113,713 $ 112,750 $ 114,246
Repossessed assets 81,445 89,104 86,692 85,732 98,312
Loans past due 90 days, still accruing 1,011 2,589 2,096 1,134 1,087
Loans past due 30 to 89 days, still accruing 12,040 13,731 12,414 11,581 30,689
Classified loans on accrual 98,170 112,147 110,654 126,681 128,434
Watch loans 132,829 147,112 167,571 190,045 204,470
 
 

Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
   
Three Months Ended March 31,

2012 (2)

    2011

Average Balance

  Interest  

Average Yield/ Cost

Average Balance

  Interest  

Average Yield/ Cost

 

($ inmillions)

($ inthousands)

($ inmillions)

($ inthousands)

 

Interest earning assets

Investment securities (1) $ 1,423.3 $ 9,585 3.13 % $ 1,277.2 $ 7,930 2.67 %
Federal funds sold and other 0.2 - 0.00 % 0.2 1 2.03 %
Loans (1) 4,782.8 67,760 5.68 % 4,203.2 63,882 6.16 %
Short term investments 96.7 50 0.21 % 228.1 131 0.23 %
Investment in restricted stock   33.4     42 0.50 %   36.8     22 0.24 %
Total interest earning assets 6,336.4 77,437 5.00 % 5,745.5 71,966 5.11 %
Non-interest earning assets
Cash and due from banks 114.8 121.6
Allowance for credit losses (100.7 ) (110.5 )
Bank owned life insurance 134.3 130.2
Other assets   358.0     408.9  
Total assets $ 6,842.8   $ 6,295.7  
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts $ 504.3 $ 315 0.25 % $ 501.5 $ 533 0.43 %
Savings and money market 2,233.6 2,168 0.39 % 2,007.4 3,566 0.72 %
Time certificates of deposit   1,424.3     2,279 0.64 %   1,438.9     3,799 1.07 %
Total interest-bearing deposits 4,162.2 4,762 0.46 % 3,947.8 7,898 0.81 %
Borrowings 294.9 2,134 2.89 % 220.8 2,268 4.17 %
Junior subordinated and subordinated debt   37.0     484 5.23 %   43.0     702 6.62 %
Total interest-bearing liabilities 4,494.1 7,380 0.66 % 4,211.6 10,868 1.05 %
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 1,645.7 1,441.4
Other liabilities 45.6 29.6
Stockholders’ equity   657.4     613.1  
Total liabilities and stockholders' equity $ 6,842.8   $ 6,295.7  
Net interest income and margin $ 70,057 4.53 % $ 61,098 4.35 %
Net interest spread 4.34 % 4.06 %
 
(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $1,761 and $481 for the first quarter ended 2012 and 2011, respectively.
(2) Yields for 2012 calculated on a 30 day month 360 days per year basis.
 
 

Western Alliance Bancorporation and Subsidiaries
Operating Segment Results

Unaudited

 

            Inter-  
segment Consoli-
Bank Western Torrey elimi- dated
of Nevada Alliance Bank Pines Bank* Other nations Company
At March 31, 2012 (dollars in millions)
 
Assets $ 2,890.9 $ 2,271.1 $ 1,785.1 $ 779.3 $ (801.1 ) $ 6,925.3
Gross loans and deferred fees, net 1,925.7 1,710.0 1,333.3 - (42.8 ) 4,926.2
Less: Allowance for credit losses   (62.6 )   (19.5 )   (16.0 )   -     -     (98.1 )
Net loans   1,863.1     1,690.5     1,317.3     -     (42.8 )   4,828.1  
Goodwill 23.2 - - 2.7 - 25.9
Deposits 2,435.2 1,953.7 1,530.6 - (20.4 ) 5,899.1
FHLB advances and other 70.0 20.0 60.0 - (30.0 ) 120.0
Stockholders' equity 324.3 202.0 157.7 661.5 (691.4 ) 654.1
 
No. of branches 11 16 12 - - 39
No. of FTE 394 237 223 97 - 951
 
 
Three Months Ended March 31, 2012:

(in thousands)

 
Net interest income $ 27,839 $ 23,055 $ 21,236 $ (2,073 ) $ - $ 70,057
Provision for credit losses   13,481     (1,997 )   1,597     -     -     13,081  

Net interest income (loss) after provision for credit losses

14,358 25,052 19,639 (2,073 ) - 56,976
Non-interest income 3,583 1,853 1,178 1,991 (2,721 ) 5,884
Non-interest expense   (18,831 )   (11,918 )   (11,072 )   (7,797 )   2,721     (46,897 )

Income (loss) from continuing operations before income taxes

(890 ) 14,987 9,745 (7,879 ) - 15,963
Income tax expense (benefit)   (1,851 )   5,172     3,958     (2,838 )   -     4,441  
 
Income (loss) from continuing operations 961 9,815 5,787 (5,041 ) - 11,522
Loss from discontinued operations, net   -     -     -     (222 )   -     (222 )
Net income (loss) $ 961   $ 9,815   $ 5,787   $ (5,263 ) $ -   $ 11,300  
 
* Excludes discontinued operations
 
 
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results
Inter-
segment Consoli-
Bank Western Torrey elimi- dated
of Nevada Alliance Bank Pines Bank* Other nations Company
At March 31, 2011 (in millions)
 
Assets $ 2,778.3 $ 1,979.8 $ 1,590.7 $ 728.4 $ (672.4 ) $ 6,404.8
Gross loans and deferred fees, net 1,872.1 1,344.6 1,104.1 - (42.8 ) 4,278.0
Less: Allowance for credit losses   (70.6 )   (19.7 )   (15.8 )   -     -     (106.1 )
Net loans   1,801.5     1,324.9     1,088.3     -     (42.8 )   4,171.9  
Goodwill 23.2 - - 2.7 - 25.9
Deposits 2,390.2 1,693.1 1,416.7 - (2.5 ) 5,497.5
Stockholders' equity 310.4 165.8 137.0 608.7 (620.3 ) 601.6
 
No. of branches 12 16 11 - - 39
No. of FTE 407 210 193 84 - 894
 
 
Three Months Ended March 31, 2011: (in thousands)
 
Net interest income $ 26,428 $ 19,656 $ 17,317 $ (2,303 ) $ - $ 61,098
Provision for credit losses   7,003     1,600     1,437     -     -     10,041  
Net interest income (loss) after
provision for credit losses 19,425 18,056 15,880 (2,303 ) - 51,057
Non-interest income 3,392 2,031 1,739 (332 ) - 6,830
Non-interest expense   (21,672 )   (12,383 )   (10,491 )   (3,600 )   -     (48,146 )

Income (loss) from continuing operations before income taxes

1,145 7,704 7,128 (6,235 ) - 9,741
Income tax expense (benefit)   251     2,849     3,106     (2,177 )   -     4,029  

 

Income(loss) from continuing operations

894 4,855 4,022 (4,058 ) - 5,712
Loss from discontinued operations, net   -     -     -     (559 )   -     (559 )
Net income (loss) $ 894   $ 4,855   $ 4,022   $ (4,617 ) $ -   $ 5,153  
 
* Excludes discontinued operations
 
 

Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
           
March 31, December 31, September 30, June 30, March 31,
2012 2011 2011 2011 2011
(dollars in thousands)
 
Total stockholder's equity $ 654,045 $ 636,683 $ 632,255 $ 615,653 $ 601,576
Less:
Goodwill and intangible assets   34,843     35,732     36,622     37,511     38,401  
Total tangible stockholders' equity 619,202 600,951 595,633 578,142 563,175
Less:
Preferred stock   141,000     141,000     141,000     132,333     131,580  
Total tangible common equity 478,202 459,951 454,633 445,809 431,595
Add:
Deferred tax   3,209     3,522     3,835     4,148     4,461  
Total tangible common equity, net of tax $ 481,411   $ 463,473   $ 458,468   $ 449,957   $ 436,056  
Total assets $ 6,925,292 $ 6,844,541 $ 6,545,890 $ 6,508,089 $ 6,404,838
Less:
Goodwill and intangible assets   34,843     35,732     36,622     37,511     38,401  
Tangible assets 6,890,449 6,808,809 6,509,268 6,470,578 6,366,437
Add:
Deferred tax   3,209     3,522     3,835     4,148     4,461  
Total tangible assets, net of tax $ 6,893,658   $ 6,812,331   $ 6,513,103   $ 6,474,726   $ 6,370,898  
Tangible equity ratio (1) 9.0 % 8.8 % 9.1 % 8.9 % 8.8 %
Tangible common equity ratio (2) 6.9 % 6.8 % 7.0 % 6.9 % 6.8 %
Common shares outstanding 83,145 82,362 82,263 82,139 82,237
Tangible book value per share, net of tax (3) $ 5.79 $ 5.63 $ 5.57 $ 5.48 $ 5.30
 
 
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
2012 2011 2011 2011 2011
(in thousands)
 
Total non-interest income $ 5,884 $ 4,948 $ 13,082 $ 9,597 $ 6,830
Less:
Mark-to-market (losses) gains, net (333 ) (626 ) 6,420 336 (509 )
Securities impairment charges - - - (226 ) -
Gains on sales of investment securities, net   361     (28 )   781     2,666     1,379  
Total operating non-interest income 5,856 5,602 5,881 6,821 5,960
Add: net interest income   70,057     68,699     64,585     63,286     61,098  
Net revenue (4) $ 75,913   $ 74,301   $ 70,466   $ 70,107   $ 67,058  
 
Total non-interest expense $ 46,897 $ 50,963 $ 45,481 $ 51,008 $ 48,146
Less:

Net loss (gain) on sales/valuations of repossessed assets

2,651 7,702 2,128 8,633 6,129
Merger/restructure - 482 974 (109 ) 217
Goodwill impairment   -     -     -     -     -  
Total operating non-interest expense (4) $ 44,246   $ 42,779   $ 42,379   $ 42,484   $ 41,800  
 
Net revenue $ 75,913 $ 74,301 $ 70,466 $ 70,107 $ 67,058
Less:
Operating non-interest expense   44,246     42,779     42,379     42,484     41,800  
Pre-tax, pre-provision operating earnings (5) $ 31,667   $ 31,522   $ 28,087   $ 27,623   $ 25,258  
 
 
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
 
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
2012 2011 2011 2011 2011
(in thousands)
 
Total operating non-interest expense $ 44,246   $ 42,779   $ 42,379   $ 42,484   $ 41,800  
Divided by:
Total net interest income $ 70,057 $ 68,699 $ 64,585 $ 63,286 $ 61,098
Add:
Tax equivalent interest adjustment 1,761 1,425 634 473 481
Operating non-interest income   5,856     5,602     5,881     6,821     5,960  
$ 77,674   $ 75,726   $ 71,100   $ 70,580   $ 67,539  
Efficiency ratio - tax equivalent basis (6) 57.0 % 56.5 % 59.6 % 60.2 % 61.9 %
 
 

 

Three Months Ended

March 31, March 31,
2012 2011
(in thousands)
 
Stockholder's equity $ 654,045 $ 601,576
Less:
Accumulated other comprehensive (loss) income 868 (14,741 )
Non-qualifying goodwill and intangibles 32,331 34,663
Other non-qualifying assets 3 24,057
Disallowed unrealized losses on equity securities - 19
Add:
Qualifying trust preferred securities 45,506 43,034
Tier 1 capital (regulatory) (7) (10) 666,349 600,612
Less:
Qualifying non-controlling interests 343 122
Qualifying trust preferred securities 45,506 43,034
Preferred stock   141,000     131,580  
Estimated Tier 1 common equity (8) (10) $ 479,500 $ 425,876
Divided by:
Estimated risk-weighted assets (regulatory (8) (10) $ 5,902,377   $ 4,947,956  
Tier 1 common equity ratio (8) (10) 8.1 % 8.6 %
 
 
March 31, March 31,
2012 2011
(in thousands)
 
Classified assets $ 284,140 $ 341,618
Divide:
Tier 1 capital (regulatory) (7) (10) 666,349 600,612
Plus: Allowance for credit losses   98,122     106,133  
Total Tier 1 capital plus allowance for credit losses $ 764,471   $ 706,745  
Classified assets to Tier 1 capital plus allowance (9) (10) 37 % 48 %
 
 
(1) We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.
(2) We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.
(3) We believe this non-GAAP ratio improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.
(4) We believe this non-GAAP measurement provides a useful indication of the cash generating capacity of the Company.
(5) We believe this non-GAAP measurement is a key indicator of the earnings power of the Company, which is otherwise obscured by the asset quality issues.
(6) We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company.
(7) Under the guidelines of the Federal Reserve and the FDIC in effect at December 31, 2011, Tier 1 capital consisted of common stock, retained earnings, non-cumulative perpetual preferred stock, trust preferred securities up to a certain limit, and minority interests in certain subsidiaries, less most other intangible assets.
(8) Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items, are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each of the four categories are added together and this sum is the risk- weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is also divided by the risk-weighted assets to determine the Tier 1 common equity ratio. We believe this non-GAAP ratio with which to analyze and evaluate financial condition and capital strength.
(9) We believe this non-GAAP ratio provides a critical regulatory metric in which to analyze asset quality.
(10) Preliminary until Call Reports are filed.




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