Western Alliance Bancorporation Reports First Quarter 2024 Financial Results

Western Alliance Bancorporation (NYSE:WAL):

FIRST QUARTER 2024 FINANCIAL RESULTS

Quarter Highlights:

Net income

Earnings per share

PPNR1

Net interest margin

Efficiency ratio

Book value per

common share

$177.4 million

$1.60

$247.0 million

3.60%

65.2%

$53.33

$190.9 million1, excluding notable items

$1.721, excluding notable items

54.4%1, adjusted for deposit costs and notable items

$47.301, excluding

goodwill and intangibles

CEO COMMENTARY:

“Western Alliance delivered strong first quarter results with continued robust business and deposit momentum that allowed us to largely complete our balance sheet repositioning efforts, while maintaining stable asset quality,” said Kenneth A. Vecchione, President and Chief Executive Officer. “Quarterly deposit growth of $6.9 billion enhanced our liquidity profile, drove the loan-to-deposit ratio down to 81.5%, and allowed us to repay $1.0 billion of borrowings. In total, excluding a $17.6 million increase to the FDIC special assessment and related tax impact, we achieved net income of $190.9 million1 and earnings per share of $1.721, which resulted in a return on tangible common equity of 14.5%1. Tangible book value per share1 climbed 13.8% year-over-year to $47.30 with a CET 1 ratio of 11.0%.”

LINKED-QUARTER BASIS

YEAR-OVER-YEAR

FINANCIAL HIGHLIGHTS:

Net income of $177.4 million and earnings per share of $1.60, up 19.9% and 20.3%, from $147.9 million and $1.33, respectively

Net revenue of $728.8 million, an increase of 6.8%, or $46.6 million, compared to an increase in non-interest expenses of 4.3%, or $19.9 million

Pre-provision net revenue1 of $247.0 million, up $26.7 million from $220.3 million

Effective tax rate of 23.5%, compared to 29.9%

Net income of $177.4 million and earnings per share of $1.60, up 24.8% and 25.0%, from $142.2 million and $1.28, respectively

Net revenue of $728.8 million, an increase of 32.1%, or $176.9 million, compared to an increase in non-interest expenses of 38.5%, or $133.9 million

Pre-provision net revenue1 of $247.0 million, up $43.0 million from $204.0 million

Effective tax rate of 23.5%, compared to 23.0%

FINANCIAL POSITION RESULTS:

HFI loans of $50.7 billion, up $403 million, or 0.8%.

Total deposits of $62.2 billion, up $6.9 billion, or 12.5%

HFI loan-to-deposit ratio of 81.5%, down from 90.9%

Stockholders' equity of $6.2 billion, up $94 million

Increase in HFI loans of $4.3 billion, or 9.2%

Increase in total deposits of $14.6 billion, or 30.8%

HFI loan-to-deposit ratio of 81.5%, down from 97.6%

Increase in stockholders' equity of $651 million

LOANS AND ASSET QUALITY:

Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.53%, compared to 0.40%

Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.07%

Nonperforming assets to total assets of 0.53%, compared to 0.17%

Annualized net loan charge-offs to average loans outstanding of 0.08%, compared to 0.05%

KEY PERFORMANCE METRICS:

Net interest margin of 3.60%, compared to 3.65%

Return on average assets and on tangible common equity1 of 0.98% and 13.4%, compared to 0.84% and 11.9%, respectively

Tangible common equity ratio1 of 6.8%, compared to 7.3%

CET 1 ratio of 11.0%, compared to 10.8%

Tangible book value per share1, net of tax, of $47.30, an increase of 1.2% from $46.72

Adjusted efficiency ratio1 of 54.4%, compared to 59.1%

Net interest margin of 3.60%, compared to 3.79%

Return on average assets and on tangible common equity1 of 0.98% and 13.4%, compared to 0.81% and 12.2%, respectively

Tangible common equity ratio1 of 6.8%, compared to 6.5%

CET 1 ratio of 11.0%, compared to 9.4%

Tangible book value per share1, net of tax, of $47.30, an increase of 13.8% from $41.56

Adjusted efficiency ratio1 of 54.4%, compared to 55.1%

See reconciliation of Non-GAAP Financial Measures.

Income Statement

Net interest income totaled $598.9 million in the first quarter 2024, an increase of $7.2 million, or 1.2%, from $591.7 million in the fourth quarter 2023, and a decrease of $11.0 million, or 1.8%, compared to the first quarter 2023. The increase in net interest income from the fourth quarter 2023 is due to a decrease in average short-term borrowings combined with an increase in average HFS loan and securities balances, partially offset by an increase in deposit balances and rates. The decrease in net interest income from the first quarter 2023 was driven by an increase in both the balances and rates of deposits, partially offset by higher yields on HFI loans and a higher average securities balance.

The Company recorded a provision for credit losses of $15.2 million in the first quarter 2024, an increase of $5.9 million from $9.3 million in the fourth quarter 2023, and a decrease of $4.2 million from $19.4 million in the first quarter 2023. The provision for credit losses during the first quarter 2024 is primarily reflective of loan growth, net-charge offs of $9.8 million and a stable economic outlook.

The Company’s net interest margin in the first quarter 2024 was 3.60%, a decrease from 3.65% in the fourth quarter 2023, and a decrease from 3.79% in the first quarter 2023. Lower yields on average earning assets drove a decrease in net interest margin from the fourth quarter 2023. The decrease in net interest margin from the first quarter 2023 was driven by higher average balances and rates on deposits, partially offset by higher yields on HFI loan balances and a higher average securities balance.

Non-interest income was $129.9 million for the first quarter 2024, compared to $90.5 million for the fourth quarter 2023, and $(58.0) million for the first quarter 2023. The $39.4 million increase in non-interest income from the fourth quarter 2023 was primarily due to an increase of $37.3 million in net loan servicing revenue due to higher servicing income and fair value changes combined with lower losses on sales of investment securities of $13.9 million. These changes were partially offset by a $12.8 million decrease in service charges and fees and a $2.5 million decrease in net gain on loan origination and sale activities from lower spreads. The $187.9 million increase in non-interest income from the first quarter 2023 was primarily driven by fair value loss adjustments in the first quarter 2023 due to the Company's balance sheet repositioning efforts that did not reoccur, paired with higher income from equity investments and net gain on loan origination and sale activities.

Net revenue totaled $728.8 million for the first quarter 2024, an increase of $46.6 million or 6.8%, compared to $682.2 million for the fourth quarter 2023, and an increase of $176.9 million or 32.1%, compared to $551.9 million for the first quarter 2023.

Non-interest expense was $481.8 million for the first quarter 2024, compared to $461.9 million for the fourth quarter 2023, and $347.9 million for the first quarter 2023. The Company’s efficiency ratio, adjusted for deposit costs1 was 57.3% (or 54.4% further adjusted for notable items1) for the first quarter 2024, compared to 59.1% in the fourth quarter 2023, and 55.1% for the first quarter 2023. The increase in non-interest expense from the fourth quarter 2023 is due primarily to a $39.3 million gain on debt extinguishment related to the early payoff of the AmeriHome senior notes in the fourth quarter 2023 that did not reoccur, combined with increased salaries and benefits of $20.3 million due to seasonal compensation costs, partially offset by a decrease in insurance cost of $49.7 million due to the higher FDIC special assessment recognized in the fourth quarter 2023. The increase in non-interest expense from the first quarter 2023 is primarily attributable to an increase in deposit and insurance costs.

Income tax expense was $54.4 million for the first quarter 2024, compared to $63.1 million for the fourth quarter 2023, and $42.4 million for the first quarter 2023. The decrease in income tax expense from the fourth quarter 2023 is primarily related to the timing of benefits from Low Income Housing Tax Credit investments.

Net income was $177.4 million for the first quarter 2024, an increase of $29.5 million from $147.9 million for the fourth quarter 2023, and an increase of $35.2 million from $142.2 million for the first quarter 2023. Earnings per share totaled $1.60 for the first quarter 2024, compared to $1.33 for the fourth quarter 2023, and $1.28 for the first quarter 2023.

The Company views its pre-provision net revenue1 ("PPNR") as a key metric for assessing the Company’s earnings power, which it defines as net revenue less non-interest expense. For the first quarter 2024, the Company’s PPNR1 was $247.0 million, up $26.7 million from $220.3 million in the fourth quarter 2023, and up $43.0 million from $204.0 million in the first quarter 2023.

The Company had 3,312 full-time equivalent employees and 56 offices at March 31, 2024, compared to 3,260 full-time equivalent employees and 57 offices at December 31, 2023, and 3,340 full-time equivalent employees and 57 offices at March 31, 2023.

See reconciliation of Non-GAAP Financial Measures.

Balance Sheet

HFI loans, net of deferred fees totaled $50.7 billion at March 31, 2024, compared to $50.3 billion at December 31, 2023, and $46.4 billion at March 31, 2023. The increase in HFI loans of $403 million from the prior quarter was primarily driven by an increase of $646 million in commercial and industrial loans, partially offset by decreases of $154 million and $108 million in residential real estate and construction and land development loans, respectively. The increase in HFI loans of $4.3 billion from March 31, 2023 was primarily driven by a $4.2 billion and $374 million increase in commercial and industrial and construction and land development loans, respectively. This increase was partially offset by a $400 million decrease in residential real estate loans. HFS loans totaled $1.8 billion at March 31, 2024, compared to $1.4 billion at December 31, 2023, and $7.0 billion at March 31, 2023. The balance of HFS loans at March 31, 2024 and December 31, 2023 primarily consisted of AmeriHome HFS loans. The increase of $439 million in HFS loans from the prior quarter is primarily related to an increase in agency conforming loans. The decrease of $5.2 billion in HFS loans from March 31, 2023 primarily related to the sale and disposition of loans during 2023 related to the Company's balance sheet repositioning strategy.

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, 2024, the allowance for loan losses to funded HFI loans ratio was 0.67%, flat from December 31, 2023, and 0.66% at March 31, 2023. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to funded HFI loans ratio was 0.74% at March 31, 2024, compared to 0.73% at December 31, 2023, and 0.75% at March 31, 2023. 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. The Company is protected from first credit losses on reference pools of loans totaling $9.0 billion, $9.1 billion, and $9.8 billion as of March 31, 2024, December 31, 2023, and March 31, 2023, 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 related to these pools of loans of $14.2 million as of March 31, 2024, $14.7 million as of December 31, 2023, and $20.8 million as of March 31, 2023. 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 0.90% at March 31, 2024, 0.89% at December 31, 2023, and 0.95% at March 31, 2023.

Deposits totaled $62.2 billion at March 31, 2024, an increase of $6.9 billion from $55.3 billion at December 31, 2023, and an increase of $14.6 billion from $47.6 billion at March 31, 2023. By deposit type, the increase from the prior quarter is attributable to increases of $3.9 billion from non-interest bearing demand deposits, $1.4 billion from savings and money market deposits, $1.0 billion from interest-bearing demand deposits, and $564 million from certificates of deposits. From March 31, 2023, interest-bearing demand deposits increased $6.2 billion, certificates of deposit increased $4.1 billion, savings and money market deposits increased $2.3 billion, and non-interest bearing demand deposits increased $1.9 billion. Non-interest bearing deposits were $18.4 billion at March 31, 2024, compared to $14.5 billion at December 31, 2023, and $16.5 billion at March 31, 2023.

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

Mar 31, 2024

Dec 31, 2023

Mar 31, 2023

Non-interest bearing

29.6

26.2

34.6

Savings and money market

26.0

26.7

29.1

Interest-bearing demand

27.3

28.8

22.5

Certificates of deposit

17.1

18.3

13.8

The Company’s ratio of HFI loans to deposits was 81.5% at March 31, 2024, compared to 90.9% at December 31, 2023, and 97.6% at March 31, 2023.

Borrowings were $6.2 billion at March 31, 2024, $7.2 billion at December 31, 2023, and $15.9 billion at March 31, 2023. Borrowings decreased $1.0 billion from December 31, 2023, primarily due to a decrease in short-term borrowings. The decrease in borrowings from March 31, 2023 is due primarily to a decrease in short-term borrowings of $9.0 billion, combined with payoffs of the AmeriHome senior notes and credit linked notes, as part of the Company's balance sheet repositioning.

Qualifying debt totaled $896 million at March 31, 2024, compared to $895 million at December 31, 2023 and March 31, 2023.

Stockholders’ equity was $6.2 billion at March 31, 2024, compared to $6.1 billion at December 31, 2023 and $5.5 billion at March 31, 2023. The increase in stockholders’ equity from the prior quarter was due to net income, partially offset by unrealized fair value losses of $88 million on the Company's available-for-sale securities, which are recorded in other comprehensive loss, net of tax, and dividends to shareholders. Cash dividends of $40.7 million ($0.37 per common share) and $3.2 million ($0.27 per depository share) were paid to shareholders during the first quarter 2024. The increase in stockholders' equity from March 31, 2023 is primarily a function of net income, partially offset by dividends to shareholders.

The Company's common equity tier 1 capital ratio was 11.0% at March 31, 2024, compared to 10.8% and 9.4% at December 31, 2023 and March 31, 2023, respectively. At March 31, 2024, tangible common equity, net of tax1, was 6.8% of tangible assets1 and total capital was 14.0% of risk-weighted assets. The Company’s tangible book value per share1 was $47.30 at March 31, 2024, an increase of 1.2% from $46.72 at December 31, 2023, and an increase of 13.8% from $41.56 at March 31, 2023. The increase in tangible book value per share from December 31, 2023 and March 31, 2023 is attributable to net income.

Total assets increased 8.6% to $77.0 billion at March 31, 2024 from $70.9 billion at December 31, 2023, and increased 8.4% from $71.0 billion at March 31, 2023. The increase in total assets from December 31, 2023 was primarily driven by an increase in investments and cash. The increase in total assets from March 31, 2023 was primarily driven by an increase in investments and HFI loans, partially offset by a decrease in HFS loans.

See reconciliation of Non-GAAP Financial Measures.

Asset Quality

Provision for credit losses totaled $15.2 million for the first quarter 2024, compared to $9.3 million for the fourth quarter 2023, and $19.4 million for the first quarter 2023. Net loan charge-offs in the first quarter 2024 were $9.8 million, or 0.08% of average loans (annualized), compared to $8.5 million, or 0.07%, in the fourth quarter 2023, and $6.0 million, or 0.05%, in the first quarter 2023.

Nonaccrual loans increased $126 million to $399 million during the quarter and increased $292 million from March 31, 2023. Loans past due 90 days and still accruing interest totaled $6 million at March 31, 2024, $42 million at December 31, 2023, and $1 million at March 31, 2023 (excluding government guaranteed loans of $349 million, $399 million, and $494 million, respectively). Loans past due 30-89 days and still accruing interest totaled $117 million at March 31, 2024, a decrease from $164 million at December 31, 2023, and an increase from $58 million at March 31, 2023 (excluding government guaranteed loans of $224 million, $279 million, and $281 million, respectively).

Repossessed assets totaled $8 million at March 31, 2024, flat from December 31, 2023, and a decrease of $3 million from March 31, 2023. Classified assets totaled $781 million at March 31, 2024, an increase of $108 million from $673 million at December 31, 2023, and an increase of $322 million from $459 million at March 31, 2023.

The ratio of classified assets to Tier 1 capital plus the allowance for credit losses2, a common regulatory measure of asset quality, was 12.0% at March 31, 2024, compared to 10.5% at December 31, 2023, and 7.8% at March 31, 2023.

See reconciliation of Non-GAAP Financial Measures.

The allowance for credit losses used in this ratio is calculated in accordance with regulatory capital rules.

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 $29.6 billion at March 31, 2024, an increase of $506 million during the quarter, and an increase of $2.4 billion during the last twelve months. Loans held for sale totaled zero at March 31, 2024 and December 31, 2023, compared to $4.7 billion as of March 31, 2023 as the Company executed its balance sheet repositioning strategy. Deposits for the Commercial segment totaled $25.1 billion at March 31, 2024, an increase of $1.2 billion during the quarter, and an increase of $3.2 billion during the last twelve months.

Pre-tax income for the Commercial segment was $143.6 million for the three months ended March 31, 2024, a decrease of $24.8 million from the three months ended December 31, 2023, and a decrease of $15.8 million from the three months ended March 31, 2023.

The Consumer Related segment reported an HFI loan balance of $21.1 billion at March 31, 2024, a decrease of $103 million during the quarter, and an increase of $1.9 billion during the last twelve months. The Consumer Related segment also had loans held for sale of $1.8 billion at March 31, 2024, an increase of $439 million during the quarter, and a decrease of $449 million during the last twelve months. Deposits for the Consumer Related segment totaled $30.5 billion, an increase of $5.6 billion during the quarter, and an increase of $10.5 billion during the last twelve months.

Pre-tax income for the Consumer Related segment was $92.8 million for the three months ended March 31, 2024, an increase of $17.2 million from the three months ended December 31, 2023, and an increase of $36.0 million from the three months ended March 31, 2023.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its first quarter 2024 financial results at 12:00 p.m. ET on Friday, April 19, 2024. Participants may access the call by dialing 1-833-470-1428 and using access code 075340 or via live audio webcast using the website link https://events.q4inc.com/attendee/894297638. 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 11:59 p.m. ET May 19th by dialing 1-866-813-9403, using access code 742981.

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, 2023, as filed with the Securities and Exchange Commission; adverse developments in the financial services industry generally such as the bank failures in 2023 and any related impact on depositor behavior; risks related to the sufficiency of liquidity; the potential adverse effects of unusual and infrequently occurring events 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 wars in Ukraine and the Middle East; 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 $70 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, clients benefit from a full spectrum of tailored commercial banking solutions and consumer products, all delivered with outstanding service by industry experts who put customers first. Major accolades include being ranked as a top U.S. bank in 2023 by American Banker and Bank Director and receiving #1 rankings on Institutional Investor's All-America Executive Team Midcap 2023-2024 for Best CEO, Best CFO, Best Company Board of Directors and Best Investor Relations Team. 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,

2024

2023

Change %

(in millions)

Total assets

76,989

71,047

8.4

Loans held for sale

1,841

7,022

(73.8

)

HFI loans, net of deferred fees

50,700

46,435

9.2

Investment securities

16,092

9,105

76.7

Total deposits

62,228

47,587

30.8

Borrowings

6,221

15,853

(60.8

)

Qualifying debt

896

895

0.1

Stockholders' equity

6,172

5,521

11.8

Tangible common equity, net of tax (1)

5,213

4,551

14.5

Common equity Tier 1 capital

5,787

5,159

12.2

Selected Income Statement Data:

For the Three Months Ended March 31,

2024

2023

Change %

(in millions, except per share data)

Interest income

1,055.0

968.9

8.9

Interest expense

456.1

359.0

27.0

Net interest income

598.9

609.9

(1.8

)

Provision for credit losses

15.2

19.4

(21.6

)

Net interest income after provision for credit losses

583.7

590.5

(1.2

)

Non-interest income

129.9

(58.0

)

Non-interest expense

481.8

347.9

38.5

Income before income taxes

231.8

184.6

25.6

Income tax expense

54.4

42.4

28.3

Net income

177.4

142.2

24.8

Dividends on preferred stock

3.2

—

Net income available to common stockholders

174.2

139.0

25.3

Diluted earnings per common share

1.60

1.28

25.0

(1)

See Reconciliation of Non-GAAP Financial Measures.

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,

2024

2023

Change %

Diluted earnings per common share

1.60

1.28

25.0

Book value per common share

53.33

47.72

11.8

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

47.30

41.56

13.8

Average common shares outstanding (in millions):

Basic

108.5

108.2

0.3

Diluted

109.0

108.3

0.6

Common shares outstanding

110.2

109.5

0.6

Selected Performance Ratios:

Return on average assets (2)

0.98

0.81

21.0

Return on average tangible common equity (1, 2)

13.4

12.2

9.8

Net interest margin (2)

3.60

3.79

(5.0

)

Efficiency ratio, adjusted for deposit costs (1)

57.3

55.1

4.0

HFI loan to deposit ratio

81.5

97.6

(16.5

)

Asset Quality Ratios:

Net charge-offs to average loans outstanding (2)

0.08

0.05

60.0

Nonaccrual loans to funded HFI loans

0.79

0.23

Nonaccrual loans and repossessed assets to total assets

0.53

0.17

Allowance for loan losses to funded HFI loans

0.67

0.66

1.5

Allowance for loan losses to nonaccrual HFI loans

286

(70.2

)

Capital Ratios:

Mar 31, 2024

Dec 31, 2023

Mar 31, 2023

Tangible common equity (1)

6.8

7.3

6.5

Common Equity Tier 1 (3)

11.0

10.8

9.4

Tier 1 Leverage ratio (3)

8.5

8.6

7.8

Tier 1 Capital (3)

11.7

11.5

10.1

Total Capital (3)

14.0

13.7

12.1

(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, 2024 are preliminary.

Changes +/- 100% are not meaningful.

Western Alliance Bancorporation and Subsidiaries

Condensed Consolidated Income Statements

Unaudited

Three Months Ended March 31,

2024

2023

(dollars in millions, except per share data)

Interest income:

Loans

871.9

832.7

Investment securities

144.0

96.1

Other

39.1

40.1

Total interest income

1,055.0

968.9

Interest expense:

Deposits

380.6

231.6

Qualifying debt

9.5

9.3

Borrowings

66.0

118.1

Total interest expense

456.1

359.0

Net interest income

598.9

609.9

Provision for credit losses

15.2

19.4

Net interest income after provision for credit losses

583.7

590.5

Non-interest income:

Net loan servicing revenue

46.4

41.9

Net gain on loan origination and sale activities

45.3

31.4

Income from equity investments

17.1

1.4

Service charges and fees

9.9

9.5

Commercial banking related income

6.5

6.2

Fair value gain (loss) adjustments, net

0.3

(147.8

)

(Loss) gain on recovery from credit guarantees

(0.5

)

3.3

(Loss) gain on sales of investment securities

(0.9

)

(12.5

)

Other

5.8

8.6

Total non-interest income

129.9

(58.0

)

Non-interest expenses:

Salaries and employee benefits

154.9

148.9

Deposit costs

137.0

86.9

Insurance

58.9

15.7

Data processing

36.0

26.4

Legal, professional, and directors' fees

30.1

23.1

Occupancy

17.5

16.5

Loan servicing expenses

15.0

13.8

Business development and marketing

5.5

5.2

Loan acquisition and origination expenses

4.8

4.4

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

(0.4

)

—

Gain on extinguishment of debt

—

(12.7

)

Other

22.5

19.7

Total non-interest expense

481.8

347.9

Income before income taxes

231.8

184.6

Income tax expense

54.4

42.4

Net income

177.4

142.2

Dividends on preferred stock

3.2

Net income available to common stockholders

174.2

139.0

Earnings per common share:

Diluted shares

109.0

108.3

Diluted earnings per share

1.60

1.28

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Income Statements

Unaudited

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(in millions, except per share data)

Interest income:

Loans

871.9

859.0

860.8

857.2

832.7

Investment securities

144.0

136.2

122.8

112.4

96.1

Other

39.1

43.8

43.0

31.2

40.1

Total interest income

1,055.0

1,039.0

1,026.6

1,000.8

968.9

Interest expense:

Deposits

380.6

343.7

316.2

251.1

231.6

Qualifying debt

9.5

9.6

9.5

9.3

Borrowings

66.0

94.0

113.9

189.9

118.1

Total interest expense

456.1

447.3

439.6

450.5

359.0

Net interest income

598.9

591.7

587.0

550.3

609.9

Provision for credit losses

15.2

9.3

12.1

21.8

19.4

Net interest income after provision for credit losses

583.7

582.4

574.9

528.5

590.5

Non-interest income:

Net loan servicing revenue

46.4

9.1

27.2

24.1

41.9

Net gain on loan origination and sale activities

45.3

47.8

52.0

62.3

31.4

Income from equity investments

17.1

13.1

0.5

0.7

1.4

Service charges and fees

9.9

22.7

23.3

20.8

9.5

Commercial banking related income

6.5

5.9

5.6

6.0

6.2

Fair value gain (loss) adjustments, net

0.3

1.3

17.8

12.7

(147.8

)

(Loss) gain on recovery from credit guarantees

(0.5

)

(2.7

)

(4.0

)

1.2

3.3

(Loss) gain on sales of investment securities

(0.9

)

(14.8

)

0.1

(13.6

)

(12.5

)

Other

5.8

8.1

6.7

4.8

8.6

Total non-interest income

129.9

90.5

129.2

119.0

(58.0

)

Non-interest expenses:

Salaries and employee benefits

154.9

134.6

137.2

145.6

148.9

Deposit costs

137.0

131.0

127.8

91.0

86.9

Insurance

58.9

108.6

33.1

33.0

15.7

Data processing

36.0

33.1

33.9

28.6

26.4

Legal, professional, and directors' fees

30.1

29.4

28.3

26.4

23.1

Occupancy

17.5

16.9

16.8

15.4

16.5

Loan servicing expenses

15.0

14.7

11.9

18.4

13.8

Business development and marketing

5.5

6.7

4.9

5.0

5.2

Loan acquisition and origination expenses

4.8

5.6

4.4

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

(0.4

)

0.3

2.2

0.5

—

Gain on extinguishment of debt

—

(39.3

)

—

(0.7

)

(12.7

)

Other

22.5

21.1

24.5

18.6

19.7

Total non-interest expense

481.8

461.9

426.2

387.4

347.9

Income before income taxes

231.8

211.0

277.9

260.1

184.6

Income tax expense

54.4

63.1

61.3

44.4

42.4

Net income

177.4

147.9

216.6

215.7

142.2

Dividends on preferred stock

3.2

Net income available to common stockholders

174.2

144.7

213.4

212.5

139.0

Earnings per common share:

Diluted shares

109.0

108.7

108.5

108.3

Diluted earnings per share

1.60

1.33

1.97

1.96

1.28

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Balance Sheets

Unaudited

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(in millions)

Assets:

Cash and due from banks

3,550

1,576

3,497

2,153

3,639

Investment securities

16,092

12,712

11,204

10,131

9,105

Loans held for sale

1,841

1,402

1,766

3,156

7,022

Loans held for investment:

Commercial and industrial

19,749

19,103

18,344

16,657

15,503

Commercial real estate - non-owner occupied

9,637

9,650

9,810

9,913

9,617

Commercial real estate - owner occupied

1,859

1,810

1,771

1,805

1,809

Construction and land development

4,781

4,889

4,669

4,428

4,407

Residential real estate

14,624

14,778

14,779

15,000

15,024

Consumer

Loans HFI, net of deferred fees

50,700

50,297

49,447

47,875

46,435

Allowance for loan losses

(340

)

(337

)

(327

)

(321

)

(305

)

Loans HFI, net of deferred fees and allowance

50,360

49,960

49,120

47,554

46,130

Mortgage servicing rights

1,178

1,124

1,233

1,007

910

Premises and equipment, net

344

339

327

315

293

Operating lease right-of-use asset

139

145

150

151

156

Other assets acquired through foreclosure, net

Bank owned life insurance

187

186

184

183

Goodwill and other intangibles, net

666

669

672

674

677

Other assets

2,624

2,741

2,730

2,824

2,921

Total assets

76,989

70,862

70,891

68,160

71,047

Liabilities and Stockholders' Equity:

Liabilities:

Deposits

Non-interest bearing demand deposits

18,399

14,520

17,991

16,733

16,465

Interest bearing:

Demand

16,965

15,916

12,843

12,646

10,719

Savings and money market

16,194

14,791

14,672

13,085

13,845

Certificates of deposit

10,670

10,106

8,781

8,577

6,558

Total deposits

62,228

55,333

54,287

51,041

47,587

Borrowings

6,221

7,230

8,745

9,567

15,853

Qualifying debt

896

895

890

888

895

Operating lease liability

172

179

180

179

184

Accrued interest payable and other liabilities

1,300

1,147

1,043

800

1,007

Total liabilities

70,817

64,784

65,145

62,475

65,526

Stockholders' Equity:

Preferred stock

295

Common stock and additional paid-in capital

2,087

2,081

2,073

2,064

2,054

Retained earnings

4,348

4,215

4,111

3,937

3,764

Accumulated other comprehensive loss

(558

)

(513

)

(733

)

(611

)

(592

)

Total stockholders' equity

6,172

6,078

5,746

5,685

5,521

Total liabilities and stockholders' equity

76,989

70,862

70,891

68,160

71,047

Western Alliance Bancorporation and Subsidiaries

Changes in the Allowance For Credit Losses on Loans

Unaudited

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(in millions)

Allowance for loan losses

Balance, beginning of period

336.7

327.4

321.1

304.7

309.7

Provision for credit losses (1)

13.4

17.8

14.3

23.8

1.0

Recoveries of loans previously charged-off:

Commercial and industrial

0.4

0.7

0.4

0.7

3.2

Commercial real estate - non-owner occupied

—

Commercial real estate - owner occupied

—

0.1

—

Construction and land development

—

Residential real estate

—

0.1

—

Consumer

—

0.1

—

Total recoveries

0.4

0.8

0.5

0.8

3.2

Loans charged-off:

Commercial and industrial

2.3

9.3

5.5

6.0

9.1

Commercial real estate - non-owner occupied

7.9

—

3.0

2.2

—

Commercial real estate - owner occupied

—

Construction and land development

—

Residential real estate

—

Consumer

—

0.1

Total loans charged-off

10.2

9.3

8.5

8.2

9.2

Net loan charge-offs

9.8

8.5

8.0

7.4

6.0

Balance, end of period

340.3

336.7

327.4

321.1

304.7

Allowance for unfunded loan commitments

Balance, beginning of period

31.6

37.9

41.1

44.8

47.0

Provision for (recovery of) credit losses (1)

1.5

(6.3

)

(3.2

)

(3.7

)

(2.2

)

Balance, end of period (2)

33.1

31.6

37.9

41.1

44.8

Components of the allowance for credit losses on loans

Allowance for loan losses

340.3

336.7

327.4

321.1

304.7

Allowance for unfunded loan commitments

33.1

31.6

37.9

41.1

44.8

Total allowance for credit losses on loans

373.4

368.3

365.3

362.2

349.5

Net charge-offs to average loans - annualized

0.08

0.07

0.06

0.05

Allowance ratios

Allowance for loan losses to funded HFI loans (3)

0.67

0.66

0.67

0.66

Allowance for credit losses to funded HFI loans (3)

0.74

0.73

0.74

0.76

0.75

Allowance for loan losses to nonaccrual HFI loans

123

138

125

285

Allowance for credit losses to nonaccrual HFI loans

135

154

141

327

(1)

The above tables reflect the provision for credit losses on funded and unfunded loans. There was a $0.1 million provision release on AFS investment securities and a $0.4 million provision for credit losses on HTM investment securities for the three months ended March 31, 2024. The allowance for credit losses on AFS and HTM investment securities totaled $1.3 million and $8.2 million, respectively, as of March 31, 2024.

(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 $14.2 million as of March 31, 2024 related to a pool of loans covered under three separate credit linked note transactions.

Western Alliance Bancorporation and Subsidiaries

Asset Quality Metrics

Unaudited

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(in millions)

Nonaccrual loans and repossessed assets

Nonaccrual loans

399

273

237

256

107

Nonaccrual loans to funded HFI loans

0.79

0.54

0.48

0.53

0.23

Repossessed assets

Nonaccrual loans and repossessed assets to total assets

0.53

0.40

0.35

0.39

0.17

Loans Past Due

Loans past due 90 days, still accruing (1)

—

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

0.01

0.08

—

0.00

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

117

164

189

121

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

0.23

0.33

0.38

0.25

0.13

Other credit quality metrics

Special mention loans

394

641

668

694

320

Special mention loans to funded HFI loans

0.78

1.27

1.35

1.45

0.69

Classified loans on accrual

361

379

381

324

325

Classified loans on accrual to funded HFI loans

0.71

0.75

0.77

0.68

0.70

Classified assets

781

673

639

604

459

Classified assets to total assets

1.01

0.95

0.90

0.89

0.65

(1)

Excludes government guaranteed residential mortgage loans of $349 million, $399 million, $439 million, $481 million, and $494 million as of each respective date in the table above.

(2)

Excludes government guaranteed residential mortgage loans of $224 million, $279 million, $261 million, $289 million, and $281 million as of each respective date in the table above.

Western Alliance Bancorporation and Subsidiaries

Analysis of Average Balances, Yields and Rates

Unaudited

Three Months Ended

March 31, 2024

December 31, 2023

Average

Balance

Interest

Average Yield /

Cost

Average

Balance

Interest

Average Yield /

Cost

($ in millions)

Interest earning assets

Loans held for sale

2,416

39.1

6.51

1,830

29.6

6.42

Loans held for investment:

Commercial and industrial

18,745

345.7

7.48

18,530

343.2

7.40

CRE - non-owner occupied

9,468

185.1

7.87

9,715

188.7

7.71

CRE - owner occupied

1,808

26.8

6.06

1,786

26.0

5.88

Construction and land development

4,922

117.1

9.57

4,789

112.6

9.33

Residential real estate

14,722

157.0

4.29

14,758

157.6

4.24

Consumer

1.1

7.28

1.3

7.52

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

49,726

832.8

6.77

49,649

829.4

6.65

Securities:

Securities - taxable

10,717

121.1

4.54

9,168

113.5

4.91

Securities - tax-exempt

2,205

22.9

5.24

2,106

22.7

5.35

Total securities (1)

12,922

144.0

4.66

11,274

136.2

4.99

Cash and other

2,953

39.1

5.33

2,572

43.8

6.75

Total interest earning assets

68,017

1,055.0

6.29

65,325

1,039.0

6.37

Non-interest earning assets

Cash and due from banks

285

287

Allowance for credit losses

(349

)

(340

)

Bank owned life insurance

186

185

Other assets

4,542

4,525

Total assets

72,681

69,982

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing transaction accounts

16,348

122.0

3.00

14,268

104.6

2.91

Savings and money market

15,247

129.9

3.43

14,595

119.1

3.24

Certificates of deposit

10,129

128.7

5.11

9,453

120.0

5.03

Total interest-bearing deposits

41,724

380.6

3.67

38,316

343.7

3.56

Short-term borrowings

3,715

53.8

5.82

5,492

79.4

5.74

Long-term debt

444

12.2

11.06

594

14.6

9.73

Qualifying debt

895

9.5

4.28

891

9.6

4.26

Total interest-bearing liabilities

46,778

456.1

3.92

45,293

447.3

3.92

Interest cost of funding earning assets

2.69

2.72

Non-interest-bearing liabilities

Non-interest-bearing demand deposits

18,183

17,579

Other liabilities

1,536

1,330

Stockholders’ equity

6,184

5,780

Total liabilities and stockholders' equity

72,681

69,982

Net interest income and margin (4)

598.9

3.60

591.7

3.65

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.6 million and $9.1 million for the three months ended March 31, 2024 and December 31, 2023, respectively.

(2)

Included in the yield computation are net loan fees of $33.0 million and $30.8 million for the three months ended March 31, 2024 and December 31, 2023, 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, 2024

March 31, 2023

Average

Balance

Interest

Average Yield /

Cost

Average

Balance

Interest

Average Yield /

Cost

($ in millions)

Interest earning assets

Loans held for sale

2,416

39.1

6.51

2,153

31.3

5.90

Loans held for investment:

Commercial and industrial

18,745

345.7

7.48

20,481

368.2

7.35

CRE - non-owner-occupied

9,468

185.1

7.87

9,520

169.4

7.22

CRE - owner-occupied

1,808

26.8

6.06

1,809

24.6

5.62

Construction and land development

4,922

117.1

9.57

4,230

93.3

8.94

Residential real estate

14,722

157.0

4.29

15,839

144.7

3.71

Consumer

1.1

7.28

1.2

6.82

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

49,726

832.8

6.77

51,952

801.4

6.28

Securities:

Securities - taxable

10,717

121.1

4.54

6,658

75.2

4.58

Securities - tax-exempt

2,205

22.9

5.24

2,117

20.9

5.00

Total securities (1)

12,922

144.0

4.66

8,775

96.1

4.68

Cash and other

2,953

39.1

5.33

3,331

40.1

4.88

Total interest earning assets

68,017

1,055.0

6.29

66,211

968.9

5.99

Non-interest earning assets

Cash and due from banks

285

265

Allowance for credit losses

(349

)

(315

)

Bank owned life insurance

186

182

Other assets

4,542

4,931

Total assets

72,681

71,274

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing transaction accounts

16,348

122.0

3.00

10,534

68.2

2.63

Savings and money market accounts

15,247

129.9

3.43

18,066

115.5

2.59

Certificates of deposit

10,129

128.7

5.11

5,520

47.9

3.52

Total interest-bearing deposits

41,724

380.6

3.67

34,120

231.6

2.75

Short-term borrowings

3,715

53.8

5.82

7,288

87.5

4.87

Long-term debt

444

12.2

11.06

1,275

30.6

9.73

Qualifying debt

895

9.5

4.28

893

9.3

4.24

Total interest-bearing liabilities

46,778

456.1

3.92

43,576

359.0

3.34

Interest cost of funding earning assets

2.69

2.20

Non-interest-bearing liabilities

Non-interest-bearing demand deposits

18,183

20,521

Other liabilities

1,536

1,589

Stockholders’ equity

6,184

5,588

Total liabilities and stockholders' equity

72,681

71,274

Net interest income and margin (4)

598.9

3.60

609.9

3.79

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $9.6 million and $8.8 million for the three months ended March 31, 2024 and 2023, respectively.

(2)

Included in the yield computation are net loan fees of $33.0 million and $35.6 million for the three months ended March 31, 2024 and 2023, 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, 2024:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

19,890

—

19,878

Loans HFS

1,841

—

1,841

—

Loans HFI, net of deferred fees and costs

50,700

29,642

21,058

—

Less: allowance for credit losses

(340

)

(287

)

(53

)

—

Net loans HFI

50,360

29,355

21,005

—

Other assets acquired through foreclosure, net

—

Goodwill and other intangible assets, net

666

291

375

—

Other assets

4,224

414

1,961

1,849

Total assets

76,989

30,080

25,182

21,727

Liabilities:

Deposits

62,228

25,146

30,481

6,601

Borrowings and qualifying debt

7,117

7,087

Other liabilities

1,472

139

421

912

Total liabilities

70,817

25,294

30,923

14,600

Allocated equity:

6,172

2,590

1,814

1,768

Total liabilities and stockholders' equity

76,989

27,884

32,737

16,368

Excess funds provided (used)

—

(2,196

)

7,555

(5,359

)

No. of offices

No. of full-time equivalent employees

3,312

588

726

1,998

Income Statement:

Three Months Ended March 31, 2024:

(in millions)

Net interest income

598.9

288.8

292.6

17.5

Provision for (recovery of) credit losses

15.2

15.3

(0.4

)

0.3

Net interest income after provision for credit losses

583.7

273.5

293.0

17.2

Non-interest income

129.9

26.1

95.7

8.1

Non-interest expense

481.8

156.0

295.9

29.9

Income (loss) before income taxes

231.8

143.6

92.8

(4.6

)

Income tax expense (benefit)

54.4

33.7

21.8

(1.1

)

Net income (loss)

177.4

109.9

71.0

(3.5

)

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited

Balance Sheet:

Consolidated Company

Commercial

Consumer Related

Corporate & Other

At December 31, 2023:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

14,569

125

14,431

Loans held for sale

1,402

—

1,402

—

Loans, net of deferred fees and costs

50,297

29,136

21,161

—

Less: allowance for credit losses

(337

)

(284

)

(53

)

—

Total loans

49,960

28,852

21,108

—

Other assets acquired through foreclosure, net

—

Goodwill and other intangible assets, net

669

292

377

—

Other assets

4,254

390

1,826

2,038

Total assets

70,862

29,555

24,838

16,469

Liabilities:

Deposits

55,333

23,897

24,925

6,511

Borrowings and qualifying debt

8,125

402

7,716

Other liabilities

1,326

109

338

879

Total liabilities

64,784

24,013

25,665

15,106

Allocated equity:

6,078

2,555

1,790

1,733

Total liabilities and stockholders' equity

70,862

26,568

27,455

16,839

Excess funds provided (used)

—

(2,987

)

2,617

370

No. of offices

No. of full-time equivalent employees

3,260

584

711

1,965

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

Reconciliation of Non-GAAP Financial Measures

Unaudited

Pre-Provision Net Revenue by Quarter:

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(in millions)

Net interest income

598.9

591.7

587.0

550.3

609.9

Total non-interest income

129.9

90.5

129.2

119.0

(58.0

)

Net revenue

728.8

682.2

716.2

669.3

551.9

Total non-interest expense

481.8

461.9

426.2

387.4

347.9

Pre-provision net revenue (1)

247.0

220.3

290.0

281.9

204.0

Less:

Provision for credit losses

15.2

9.3

12.1

21.8

19.4

Income tax expense

54.4

63.1

61.3

44.4

42.4

Net income

177.4

147.9

216.6

215.7

142.2

Pre-Provision Net Revenue, Excluding Notable Items

Three Months Ended

Mar 31, 2024

(in millions)

Pre-provision net revenue (1)

247.0

Excluding notable items:

FDIC special assessment

17.6

Pre-provision net revenue, excluding notable items (1)

264.6

Less:

Provision for credit losses

15.2

Income tax expense

54.4

FDIC special assessment

17.6

Net income

177.4

Earnings per Share, Excluding Notable Items:

Three Months Ended

Mar 31, 2024

(in millions)

Net income available to common stockholders

174.2

Excluding:

FDIC special assessment

17.6

Tax effect of notable items

(4.1

)

Net income available to common stockholders, excluding notable items

187.7

Diluted shares

109.0

Diluted earnings per share, excluding notable items (1)

1.72

Return on Average Assets, Excluding Notable Items:

Three Months Ended

Mar 31, 2024

(in millions)

Net income

177.4

Excluding:

FDIC special assessment

17.6

Tax effect of notable items

(4.1

)

Net income, excluding notable items

190.9

Divided by:

Average assets

72,681

Return on average assets, excluding notable items (1)

1.06

Western Alliance Bancorporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Unaudited

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

Efficiency Ratio (Tax Equivalent Basis) by Quarter:

(dollars in millions)

Total non-interest expense

481.8

461.9

426.2

387.4

347.9

Less: Deposit costs

137.0

131.0

127.8

91.0

86.9

Total non-interest expense, excluding deposit costs

344.8

330.9

298.4

296.4

261.0

Divided by:

Total net interest income

598.9

591.7

587.0

550.3

609.9

Plus:

Tax equivalent interest adjustment

9.6

9.1

8.9

8.7

8.8

Total non-interest income

129.9

90.5

129.2

119.0

(58.0

)

Less: Deposit costs

137.0

131.0

127.8

91.0

86.9

601.4

560.3

597.3

587.0

473.8

Efficiency ratio (2)

65.2

66.8

58.8

57.1

62.0

Efficiency ratio, adjusted for deposit costs (2)

57.3

59.1

50.0

50.5

55.1

Three Months Ended

Mar 31, 2024

Dec 31, 2023

Efficiency Ratio (Tax Equivalent Basis), Adjusted for Deposit Costs and Notable Items:

(dollars in millions)

Total non-interest expense, excluding deposit costs

344.8

330.9

Less: FDIC special assessment

17.6

66.3

Total non-interest expense, excluding deposit costs and notable items

327.2

264.6

Divided by:

Total net interest income

598.9

591.7

Plus:

Tax equivalent interest adjustment

9.6

9.1

Total non-interest income

129.9

90.5

Less: Deposit costs

137.0

131.0

601.4

560.3

Efficiency ratio, adjusted for deposit costs and notable items (2)

54.4

47.2

Tangible Common Equity:

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

(dollars and shares in millions)

Total stockholders' equity

6,172

6,078

5,746

5,685

5,521

Less:

Goodwill and intangible assets

666

669

672

674

677

Preferred stock

295

Total tangible common equity

5,211

5,114

4,779

4,716

4,549

Plus: deferred tax - attributed to intangible assets

Total tangible common equity, net of tax

5,213

5,116

4,781

4,718

4,551

Total assets

76,989

70,862

70,891

68,160

71,047

Less: goodwill and intangible assets, net

666

669

672

674

677

Tangible assets

76,323

70,193

70,219

67,486

70,370

Plus: deferred tax - attributed to intangible assets

Total tangible assets, net of tax

76,325

70,195

70,221

67,488

70,372

Tangible common equity ratio (3)

6.8

7.3

6.8

7.0

6.5

Common shares outstanding

110.2

109.5

Tangible book value per share, net of tax (3)

47.30

46.72

43.66

43.09

41.56

Return on Average Tangible Common Equity, Excluding Notable Items:

Three Months Ended

Mar 31, 2024

(in millions)

Net income available to common shareholders, excluding notable items

187.7

Divided by:

Average stockholders' equity

6,184

Less:

Average goodwill and intangible assets

668

Average preferred stock

295

Average tangible common equity

5,221

Return on average tangible common equity, excluding notable items (1)

14.5

Non-GAAP Financial Measures Footnotes

(1)

We believe this non-GAAP measurement is a key indicator of the earnings power of the Company.

(2)

We believe this non-GAAP ratio provides a useful metric to measure the efficiency of the Company.

(3)

We believe this non-GAAP metric provides an important metric with which to analyze and evaluate the financial condition and capital strength of the Company.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240417197435/en/

Investors: Miles Pondelik, 602-346-7462 Email: MPondelik@westernalliancebank.com

Media: Stephanie Whitlow, 480-998-6547 Email: SWhitlow@westernalliancebank.com

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