Western Alliance Ban Corp. (WAL) filed Quarterly Report for the period ended 2009-09-30.
Western Alliance Bancorporation is the parent company of BankWest of Nevada, Alliance Bank of Arizona, Torrey Pines Bank, Miller/Russell & Associates, and Premier Trust. These dynamic companies provide a broad array of banking, leasing, trust, investment, and mortgage services to clients in Nevada, Arizona and California. Staffed with experienced financial professionals, these organizations deliver a broader product array and larger credit capacity than community banks, yet are empowered to be more responsive to customers' needs than larger institutions. Western Alliance Ban Corp. has a market cap of $270.9 million; its shares were traded at around $3.74 with and P/S ratio of 0.8.
Highlight of Business Operations:
Loans for the quarter ended September 30, 2009 declined $60.9 million, or 1.5%, as compared to loan growth of $72.6 million, or 1.9% for the same period in 2008. Deposit growth was $360.0 million, or 8.2%, for the quarter ended September 30, 2009, compared to a decline of $144.7 million, or 4.0% for the same period in 2008. We reported a net loss of $23.9 million, or $0.37 loss per diluted share, for the quarter ended September 30, 2009, as compared to a net loss of $94.7 million, or $2.84 loss per diluted share, for the same period in 2008. The current period net loss is primarily due to a $36.0 million increase to the provision for loan losses and a $7.3 million net loss on sale of repossessed assets from the quarter ended September 30, 2008 caused by challenging economic conditions, which was partially offset by net mark-to-market gains and gains on sale of securities of $5.0 million and by a $5.4 million decrease in interest expense due to lower costs of funds. Other noninterest income increased 9.5% to $8.1 million from the same period in 2008 due primarily to increases in bank service charges. Noninterest expense for the quarter ended September 30, 2009 decreased $74.5 million, or 62.2%, from the same period in 2008, due primarily to a $79.2 million goodwill impairment charge in the third quarter 2008, offset by increases in insurance costs of $1.3 million from increased FDIC assessments and higher deposit balances and a $2.7 million increase in salaries and employee benefits costs.
Return on Average Equity. For the three months ended September 30, 2009 we had a net loss of $23.9 million compared to a net loss of $94.7 million for the three months ended September 30, 2008. The current period net loss is primarily due to a $36.0 million increase to the provision for loan losses and a $7.3 million net loss on sale of repossessed assets from the quarter ended September 30, 2008 caused by challenging economic conditions, which was partially offset by net mark-to-market gains and gains on sale of securities of $5.0 million and by a $5.4 million decrease in interest expense due to lower costs of funds. Basic and diluted loss per share was $0.37 for the three months ended September 30, 2009 compared to basic and diluted net loss per share of $2.84 for the same period in 2008. Stockholders’ equity decreased $18.7 million from the quarter ended June 30, 2009 due to a $23.9 million net loss for the third quarter, partially offset by a $5.1 million increase in unrealized gains on securities. Net loss available to common stockholders was $26.4 million, which includes $2.4 million in preferred stock dividends and accretion. The decrease in net income and equity resulted in an ROE of (14.78)% for the three months ended September 30, 2009 compared to (71.63)% for the three months ended September 30, 2008.
For the nine months ended September 30, 2009 we incurred a net loss of $124.5 million compared to a net loss of $88.2 million for the nine months ended September 30, 2008. The current period net loss was primarily due to securities impairment charges of $42.0 million and a $72.4 million increase to the provision for loan losses caused by challenging economic conditions, which was partially offset by a $21.1 million decrease in interest expense due to lower costs of funds. Basic and diluted net loss per share was $2.42 for the nine months ended September 30, 2009 compared to basic and diluted net loss per share of $2.86 for the same period in 2008. Stockholders’ equity increased $107.5 million from December 31, 2008 due primarily to a $200 million public offering, partially offset by the $124.5 net loss for the nine months ended September 31, 2009. The decrease in net income and increase in equity resulted in an ROE of (30.16)% for the nine months ended September 30, 2009 compared to (23.06)% for the nine months ended September 30, 2008.
Asset Quality. For all banks and bank holding companies, asset quality plays a significant role in the overall financial condition of the institution and results of operations. We measure asset quality in terms of nonaccrual loans as a percentage of gross loans, and net charge-offs as a percentage of average loans. Net charge-offs are calculated as the difference between charged-off loans and recovery payments received on previously charged-off loans. As of September 30, 2009, impaired loans, including nonaccrual loans, were $232.0 million compared to $43.9 million at September 30, 2008. Nonaccrual loans as a percentage of gross loans as of September 30, 2009 were 4.19% compared to 0.71% as of September 30, 2008. For the three and nine months ended September 30, 2009 annualized net charge-offs as a percentage of average loans were 3.05% and 2.60%, respectively. For the same periods in 2008, annualized net charge-offs as a percentage of average loans were 1.65% and 0.98%, respectively.
Asset and Deposit Growth. The ability to produce loans and generate deposits is fundamental to our asset growth. Our assets and liabilities are comprised primarily of loans and deposits, respectively. Total assets increased 11.5% to $5.83 billion as of September 30, 2009 from $5.23 billion as of September 30, 2008. Gross loans grew 0.5% to
$3.97 billion as of September 30, 2009 from $3.95 billion as of September 30, 2008. Total deposits increased 35.4% to $4.75 billion as of September
WAL is in the portfolios of NWQ Managers of NWQ Investment Management Co.
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