Western Alliance Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)




☒		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2020



☐		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from__________ to __________

Commission file number: 001-32550

WESTERN ALLIANCE BANCORPORATION

(Exact name of registrant as specified in its charter)



Delaware		88-0365922
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



One E. Washington Street, Suite 1400	Phoenix	Arizona	85004
(Address of principal executive offices)			(Zip Code)

(602) 389-3500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 Par Value	WAL	New York Stock Exchange
6.25% Subordinated Debentures due 2056	WALA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 27, 2020, Western Alliance Bancorporation had 100,851,015 shares of common stock outstanding.

Table of Contents

INDEX

Table of Contents

PART I

GLOSSARY OF ENTITIES AND TERMS

The acronyms and abbreviations identified below are used in various sections of this Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," in Item 2 and the Consolidated Financial Statements and the Notes to Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q.



ENTITIES / DIVISIONS:
ABA	Alliance Bank of Arizona	HOA Services	Homeowner Associations Services
BON	Bank of Nevada	LVSP	Las Vegas Sunset Properties
Bridge	Bridge Bank	TPB	Torrey Pines Bank
Company	Western Alliance Bancorporation and subsidiaries	WA PWI	Western Alliance Public Welfare Investments, LLC
CSI	CS Insurance Company	WAB or Bank	Western Alliance Bank
FIB	First Independent Bank	WABT	Western Alliance Business Trust
HFF	Hotel Franchise Finance	WAL or Parent	Western Alliance Bancorporation
TERMS:
AFS	Available-for-Sale	GNMA	Government National Mortgage Association
ALCO	Asset and Liability Management Committee	GSE	Government-Sponsored Enterprise
AOCI	Accumulated Other Comprehensive Income	HFI	Held for Investment
APIC	Additional paid in capital	HTM	Held-to-Maturity
ASC	Accounting Standards Codification	ICS	Insured Cash Sweep Service
ASU	Accounting Standards Update	IRC	Internal Revenue Code
Basel III	Banking Supervision's December 2010 final capital framework	ISDA	International Swaps and Derivatives Association
BOD	Board of Directors	LGD	Loss Given Default
BSA	Bank Secrecy Act	LIBOR	London Interbank Offered Rate
CARES Act	Coronavirus Aid, Relief and Economic Security Act	LIHTC	Low-Income Housing Tax Credit
CDARS	Certificate Deposit Account Registry Service	MBS	Mortgage-Backed Securities
CDO	Collateralized Debt Obligation	NBL	National Business Lines
CECL	Current Expected Credit Losses	NOL	Net Operating Loss
CEO	Chief Executive Officer	NPV	Net Present Value
CFO	Chief Financial Officer	OCI	Other Comprehensive Income
COVID-19	Coronavirus Disease 2019	OREO	Other Real Estate Owned
CRA	Community Reinvestment Act	OTTI	Other-than-Temporary Impairment
CRE	Commercial Real Estate	PCI	Purchased Credit Impaired
EAD	Exposure at Default	PD	Probability of Default
EPS	Earnings per share	PPNR	Pre-Provision Net Revenue
EVE	Economic Value of Equity	PPP	Paycheck Protection Program
Exchange Act	Securities Exchange Act of 1934, as amended	REIT	Real Estate Investment Trust
FASB	Financial Accounting Standards Board	ROU	Right of use
FDIC	Federal Deposit Insurance Corporation	SBA	Small Business Administration
FHLB	Federal Home Loan Bank	SBIC	Small Business Investment Company
FHLMC	Federal Home Loan Mortgage Corporation	SEC	Securities and Exchange Commission
FinCEN	Financial Crimes Enforcement Network	SERP	Supplemental Executive Retirement Plan
FNMA	Federal National Mortgage Association	SR	Supervision and Regulation Letters
FOMC	Federal Open Market Committee	TDR	Troubled Debt Restructuring
FRB	Federal Reserve Bank	TEB	Tax Equivalent Basis
FVO	Fair Value Option	TSR	Total Shareholder Return
GAAP	U.S. Generally Accepted Accounting Principles	XBRL	eXtensible Business Reporting Language

Table of Contents

Item 1.
Financial Statements

WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



	March 31, 2020			December 31, 2019
	(Unaudited)
	(in thousands, except shares and per share amounts)
Assets:
Cash and due from banks	$	152,368		$	185,977
Interest-bearing deposits in other financial institutions	263,342			248,619
Cash, cash equivalents, and restricted cash	415,710			434,596
Investment securities - AFS, at fair value; amortized cost of $3,640,109 at March 31, 2020 and $3,317,928 at December 31, 2019	3,676,651			3,346,310
Investment securities - HTM, at amortized cost; fair value of $530,062 at March 31, 2020 and $516,261 at December 31, 2019	483,775			485,107
Less: allowance for credit losses	(2,981		)	—
Net HTM investment securities	480,794			485,107
Investment securities - equity	131,158			138,701
Investments in restricted stock, at cost	66,709			66,509
Loans - HFS	20,873			21,803
Loans, net of deferred loan fees and costs	23,145,268			21,101,493
Less: allowance for credit losses	(235,329		)	(167,797		)
Net loans held for investment	22,909,939			20,933,696
Premises and equipment, net	125,889			125,838
Operating lease right of use asset	72,338			72,558
Bank owned life insurance	175,007			174,046
Goodwill and intangible assets, net	297,234			297,608
Deferred tax assets, net	27,518			18,025
Investments in LIHTC and renewable energy	416,272			409,365
Other assets	342,135			297,786
Total assets	$	29,158,227		$	26,821,948
Liabilities:
Deposits:
Non-interest-bearing demand	$	9,886,528		$	8,537,905
Interest-bearing	14,944,153			14,258,588
Total deposits	24,830,681			22,796,493
Customer repurchase agreements	22,980			16,675
Other borrowings	308,000			—
Qualifying debt	389,893			393,563
Operating lease liability	78,733			78,112
Other liabilities	528,307			520,357
Total liabilities	26,158,594			23,805,200
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock - par value $0.0001; 200,000,000 authorized; 103,296,003 shares issued at March 31, 2020 and 104,527,544 at December 31, 2019	10			10
Treasury stock, at cost (2,142,984 shares at March 31, 2020 and 2,003,873 shares at December 31, 2019)	(70,186		)	(62,728		)
Additional paid in capital	1,370,544			1,374,141
Accumulated other comprehensive income	37,497			25,008
Retained earnings	1,661,768			1,680,317
Total stockholders’ equity	2,999,633			3,016,748
Total liabilities and stockholders’ equity	$	29,158,227		$	26,821,948

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS



	Three Months Ended March 31,
	2020			2019
	(in thousands, except per share amounts)
Interest income:
Loans, including fees	$	276,886		$	258,818
Investment securities	26,300			28,178
Dividends	1,615			1,633
Other	2,415			2,539
Total interest income	307,216			291,168
Interest expense:
Deposits	32,516			35,788
Other borrowings	35			1,277
Qualifying debt	5,249			6,105
Other	396			662
Total interest expense	38,196			43,832
Net interest income	269,020			247,336
Provision for credit losses	51,176			4,536
Net interest income after provision for credit losses	217,844			242,800
Non-interest income:
Service charges and fees	6,404			5,412
Income from equity investments	3,766			2,009
Card income	1,717			1,841
Foreign currency income	1,328			1,095
Income from bank owned life insurance	962			981
Lending related income and gains (losses) on sale of loans, net	648			251
Gain (loss) on sales of investment securities, net	72			—
Fair value (loss) gain adjustments on assets measured at fair value, net	(11,300		)	2,834
Other income	1,512			987
Total non-interest income	5,109			15,410
Non-interest expense:
Salaries and employee benefits	72,064			68,556
Legal, professional, and directors' fees	10,402			7,532
Data processing	8,603			6,675
Occupancy	8,225			8,227
Deposit costs	7,338			5,724
Insurance	2,998			2,809
Business development	2,281			2,085
Loan and repossessed asset expenses	1,462			2,006
Marketing	904			741

Price	45.84	EPS	5
Shares	103	P/E	10
MCap	4,743	P/FCF	9
Net Debt	-872	EBIT	771
TEV	3,871	TEV/EBIT	5
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-04-30
10-K	2019-12-31	Filed 2020-03-02
10-Q	2019-09-30	Filed 2019-10-31
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-04-30
10-K	2018-12-31	Filed 2019-03-01
10-Q	2018-09-30	Filed 2018-10-30
10-Q	2018-06-30	Filed 2018-07-31
10-Q	2018-03-31	Filed 2018-04-27
10-K	2017-12-31	Filed 2018-02-26
10-Q	2017-09-30	Filed 2017-10-27
10-Q	2017-06-30	Filed 2017-07-28
10-Q	2017-03-31	Filed 2017-04-27
10-K	2016-12-31	Filed 2017-02-28
10-Q	2016-09-30	Filed 2016-10-31
10-Q	2016-06-30	Filed 2016-07-29
10-Q	2016-03-31	Filed 2016-05-02
10-K	2015-12-31	Filed 2016-02-16
10-Q	2015-09-30	Filed 2015-10-30
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-02-17
10-Q	2014-09-30	Filed 2014-10-30
10-Q	2014-06-30	Filed 2014-07-30
10-Q	2014-03-31	Filed 2014-04-30
10-K	2013-12-31	Filed 2014-02-21
10-Q	2013-09-30	Filed 2013-10-31
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-03-01
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-03
10-Q	2012-03-31	Filed 2012-05-03
10-K	2011-12-31	Filed 2012-03-02
10-Q	2011-09-30	Filed 2011-11-08
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-06
10-Q	2010-09-30	Filed 2010-11-08
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-03-16
10-K	2001-12-31	Filed 2011-03-07

8-K	2020-06-11
8-K	2020-06-01
8-K	2020-05-22
8-K	2020-05-13
8-K	2020-04-28
8-K	2020-04-16
8-K	2020-03-09
8-K	2020-02-12
8-K	2020-02-07
8-K	2020-01-23
8-K	2019-11-02
8-K	2019-10-29
8-K	2019-10-29
8-K	2019-10-17
8-K	2019-07-30
8-K	2019-07-18
8-K	2019-06-04
8-K	2019-04-22
8-K	2019-03-04
8-K	2019-02-11
8-K	2019-01-24
8-K	2018-12-11
8-K	2018-10-18
8-K	2018-07-19
8-K	2018-06-12
8-K	2018-04-19
8-K	2018-04-16
8-K	2018-01-25

EX-31.1	walex3113312020.htm
EX-31.2	walex3123312020.htm
EX-32	walex323312020.htm



		Page
PART I. FINANCIAL INFORMATION

Item 1.	Glossary of Entities and Terms	3
	Financial Statements (Unaudited)
	Consolidated Balance Sheets	4
	Consolidated Income Statements	5
	Consolidated Statements of Comprehensive Income	7
	Consolidated Statements of Stockholders’ Equity	8
	Consolidated Statements of Cash Flows	9
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	67
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	94
Item 4.	Controls and Procedures	97

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	97
Item 1A.	Risk Factors	98
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	99
Item 5.	Other Information	99
Item 6.	Exhibits	100

SIGNATURES		101

WAL 10Q Quarterly Report

Western Alliance Earnings 2020-03-31