Business Wire | Oct 22, 2020 04:15PM EDT

Western Alliance Reports Third Quarter 2020 Financial Results

Oct. 22, 2020

PHOENIX--(BUSINESS WIRE)--Oct. 22, 2020--Western Alliance Bancorporation (NYSE:WAL):

THIRD QUARTER 2020 FINANCIAL RESULTS

Net Earnings Net Efficiency Book value perincome per share PPNR^1 interest ratio^1 common share margin

$31.98

$135.8 $181.3 $29.03^1,million $1.36 million 3.71% 39.7% excluding goodwill and intangibles

CEO COMMENTARY

"The flexibility of Western Alliance's diversified business model drove the Company's record third quarter performance," said Kenneth A. Vecchione, President and Chief Executive Officer. "Our deep segment and product expertise enables us to pivot our business in response to a changing external environment and we continue to prove that we can achieve industry-leading profitability and growth, while maintaining prudent credit risk management. Net income of $135.8 million and earnings per share of $1.36 are each up over 45% from the prior quarter, benefiting from a decline in the provision for credit losses of $77.3 million as the macroeconomic outlook improved and the Company grew loans in low-risk asset classes. In addition, return on average tangible common equity1 of 18.7% for the quarter continues to be among the highest in the industry."

"The Company produced another quarter of sizable loan and deposit growth of $985 million and $1.3 billion, respectively. While deposit growth ($314 million over loan growth) provides a stable base for asset expansion in future quarters, it added transitory pressure on net interest margin, which declined 48 basis points from the prior quarter to 3.71%, largely as a result of excess liquidity that had not been fully deployed at quarter-end. Nonperforming assets to total assets remained stable at 0.47%, attributable to the Company's timely credit mitigation actions that also resulted in a decline in loan deferrals to 5.0% of total loans. Capital levels also remain strong with a tangible common equity ratio1 of 8.9% and a total ACL to funded loans ratio of 1.46%, excluding PPP loans."

LINKED-QUARTER BASIS YEAR-OVER-YEAR

FINANCIAL HIGHLIGHTS:

* Net income of $135.8 million and * Net income of $135.8 million and earnings per share of $1.36, earnings per share of $1.36, up compared to $93.3 million and $0.93, 6.6% and 9.7%, from $127.4 million respectively and $1.24, respectively

* Net revenue of $305.3 million, a * Net revenue of $305.3 million, an decrease of 4.5%, or $14.3 million, increase of 6.8%, or $19.5 compared to an increase in million, compared to a decrease in non-interest expenses of 8.1%, or non-interest expenses of $2.1 $9.3 million million

* Pre-provision net revenue^1 of * Pre-provision net revenue^1 of $181.3 million, down $23.6 million $181.3 million, up $21.5 million from $204.9 million from $159.7 million

* Effective tax rate of 18.50%, * Effective tax rate of 18.50%, compared to 17.36% compared to 18.30%

FINANCIAL POSITION RESULTS: * Total loans of $26.0 billion, up * Increase in total loans of $5.9 $985 million, or 15.6% annualized billion, or 29.1%

* Total deposits of $28.8 billion, up * Increase in total deposits of $6.4 $1.3 billion, or 18.8% annualized billion, or 28.5%

* Stockholders' equity of $3.2 * Increase in stockholders' equity billion, up $122 million of $301 million

LOANS AND ASSET QUALITY * Nonperforming assets (nonaccrual loans and repossessed assets) to * Nonperforming assets to total total assets of 0.47%, flat from the assets of 0.47%, compared to 0.25% prior quarter

* Annualized net loan charge-offs to * Annualized net loan charge-offs average loans outstanding of 0.13%, (recoveries) to average loans compared to 0.09% outstanding of 0.13%, compared to (0.01)%

KEY PERFORMANCE METRICS * Net interest margin of 3.71%, * Net interest margin of 3.71%, compared to 4.19% compared to 4.41%

* Return on average assets and on * Return on average assets and on tangible common equity ^1 of 1.66% tangible common equity ^1 of 1.66% and 18.73%, compared to 1.22% and and 18.73%, compared to 1.94% and 13.60%, respectively 19.41%, respectively

* Tangible common equity ratio ^1 of * Tangible common equity ratio ^1 of 8.9%, flat from the prior quarter 8.9%, compared to 10.1%

* Tangible book value per share ^1, * Tangible book value per share ^1, net of tax, of $29.03, an increase net of tax, of $29.03, an increase of 4.3% from $27.84 of 13.4% from $25.60

* Efficiency ratio^1 of 39.7%,^ * Efficiency ratio ^1 of 39.7%, compared to 35.1% compared to 43.2%

1 See reconciliation of Non-GAAP Financial Measures.

Income Statement

Net interest income was $284.7 million in the third quarter 2020, a decrease of $13.7 million from $298.4 million in the second quarter 2020, and an increase of $18.3 million, or 6.9%, compared to the third quarter 2019. Net interest income was impacted by changes in prepayment assumptions on PPP loans, which resulted in reversal of $6.4 million of net deferred loan fee accretion on PPP loans recognized in the prior quarter and a decrease of $4.2 million in current quarter accretion.

Provision for credit losses2 was $14.7 million in the third quarter 2020, a decrease of $77.3 million from $92.0 million in the second quarter 2020, and an increase of $10.9 million from $3.8 million in the third quarter 2019. The significant decrease in the provision for credit losses during the third quarter 2020 is due to improvement in economic forecasts relative to June 30, 2020 and concentration of loan growth in portfolio segments with lower expected loss rates. The CECL standard, adopted by the Company in the first quarter of 2020, changes the methodology for estimating credit losses on financial instruments from an incurred loss model to an expected total loss model. This results in the recognition of expected losses over the life of a loan at the time that the loan is originated, rather than after a loss has been incurred, which results in an acceleration in the timing of loss recognition. Further, as the Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses, the current uncertainty in the overall economy contributed to an increased provision for credit losses for 2020.

The Company's net interest margin in the third quarter 2020 was 3.71%, a decrease from 4.19% in the second quarter 2020 and from 4.41% in the third quarter 2019. The decrease in net interest margin from the prior periods is largely a result of excess liquidity from deposit growth that has outpaced loan growth as well as a decrease in net deferred loan fee accretion on PPP loans from the prior quarter, as discussed above. These drivers of net interest margin compression during the quarter are expected to be temporary in nature and will taper off over time.

Non-interest income was $20.6 million for the third quarter 2020, compared to $21.3 million for the second quarter 2020, and $19.4 million for the third quarter 2019.

Net revenue was $305.3 million for the third quarter 2020, a decrease of $14.3 million, compared to $319.7 million for the second quarter 2020, and an increase of $19.5 million, or 6.8%, compared to $285.9 million for the third quarter 2019.

Non-interest expense was $124.1 million for the third quarter 2020, compared to $114.8 million for the second quarter 2020, and $126.2 million for the third quarter 2019. The Company's efficiency ratio1 was 39.7% for the third quarter 2020, compared to 35.1% in the second quarter 2020, and 43.2% for the third quarter 2019.

Income tax expense was $30.8 million for the third quarter 2020, compared to $19.6 million for the second quarter 2020, and $28.5 million for the third quarter 2019. The increase in income tax expense from the prior quarter is primarily the result of an increase in pre-tax income during the third quarter 2020 in conjunction with a marginal increase in the effective tax rate.

Net income was $135.8 million for the third quarter 2020, an increase of $42.5 million from $93.3 million for the second quarter 2020, and an increase of $8.4 million, or 6.6%, from $127.4 million for the third quarter 2019. Earnings per share was $1.36 for the third quarter 2020, compared to $0.93 for the second quarter 2020, and $1.24 for the third quarter 2019. As discussed above, the increase in net income and earnings per share for the third quarter 2020 compared to the prior quarter was driven by the decrease in the provision for credit losses.

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 third quarter 2020, the Company's PPNR1 was $181.3 million, down $23.6 million from $204.9 million in the second quarter 2020, and up $21.5 million from $159.7 million in the third quarter 2019. PPNR for the second quarter 2020 benefited from a $5.6 million gain related to restructuring of the Company's bank owned life insurance as well as recognition of $13.9 million in net deferred fee accretion and $5.6 million in cost deferrals related to PPP loans.

The Company had 1,885 full-time equivalent employees and 49 offices at September 30, 2020, compared to 1,851 employees and 47 offices at June 30, 2020, and 1,814 employees and 47 offices at September 30, 2019.

^ See reconciliation of Non-GAAP Financial Measures.1

Upon adoption of CECL on January 1, 2020, Provision for credit losses has^ been modified to also include amounts related to unfunded loan commitments2 and investment securities. Prior period amounts have been restated to conform to the current presentation.

Balance Sheet

Gross loans totaled $26.0 billion at September 30, 2020, an increase of $985 million from $25.0 billion at June 30, 2020, and an increase of $5.9 billion from $20.2 billion at September 30, 2019. By loan type, the largest increases from the prior quarter include $892 million in commercial and industrial loans and $103 million in construction and land development loans. From September 30, 2019, the largest increases in the loan balance were driven by commercial and industrial loans of $4.9 billion (includes $1.7 billion of PPP loans), residential real estate loans of $525 million, and CRE non-owner occupied loans of $376 million. The Company's allowance for credit losses on loans consists of an allowance for funded loans and an allowance for unfunded loan commitments. At September 30, 2020, the allowance for loan losses to loans held for investment was 1.19%, compared to 1.24% at June 30, 2020, and 0.82% at September 30, 2019. The allowance for credit losses, which includes the allowance for unfunded loan commitments, to loans held for investment was 1.37% at September 30, 2020, compared to 1.39% at June 30, 2020, and 0.86% at September 30, 2019.

Deposits totaled $28.8 billion at September 30, 2020, an increase of $1.3 billion from $27.5 billion at June 30, 2020, and an increase of $6.4 billion from $22.4 billion at September 30, 2019. By deposit type, the largest increases from the prior quarter include $777 million from non-interest bearing demand deposits and $752 million from savings and money market accounts. These increases were offset by a decrease in certificates of deposit of $276 million. From September 30, 2019, deposits increased across most deposit types, with increases in non-interest bearing demand deposits of $4.3 billion, savings and money market accounts of $1.5 billion, and interest-bearing demand deposits of $1.0 billion. These increases were partially offset by a decrease in certificates of deposit of $416 million. Non-interest bearing deposits were $13.0 billion at September 30, 2020, compared to $12.2 billion at June 30, 2020, and $8.8 billion at September 30, 2019.

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

Sep 30, 2020 Jun 30, 2020 Sep 30, 2019

Non-interest bearing 45.1 % 44.4 % 39.0 %

Savings and money market 36.7 35.7 40.4

Interest-bearing demand 12.3 12.7 11.2

Certificates of deposit 5.9 7.2 9.4

The Company's ratio of loans to deposits was 90.2% at September 30, 2020, compared to 90.9% at June 30, 2020, and 89.8% at September 30, 2019.

Borrowings were $10 million at September 30, 2020 and June 30, 2020, and zero at September 30, 2019. The increase in borrowings from September 30, 2019 is due to an increase in short-term borrowings from the FHLB.

Qualifying debt totaled $619 million at September 30, 2020, compared to $618 million at June 30, 2020, and $389 million at September 30, 2019. The increase in qualifying debt from September 30, 2019 is primarily due to the issuance of $225 million in subordinated debt in May 2020.

Stockholders' equity was $3.2 billion at September 30, 2020, compared to $3.1 billion at June 30, 2020, and $2.9 billion at September 30, 2019. The increase in stockholders' equity from September 30, 2019 is primarily a function of net income, partially offset by share repurchases and dividends to shareholders as well as the adoption impact of CECL. During the third quarter 2020, the Company's Board of Directors approved a cash dividend of $0.25 per share. The dividend payment to shareholders totaled $25.2 million, and was paid on August 27, 2020.

At September 30, 2020, tangible common equity, net of tax, was 8.9% of tangible assets1 and total capital was 13.0% of risk-weighted assets. The Company's tangible book value per share1 was $29.03 at September 30, 2020, up 13.4% from September 30, 2019.

Total assets increased 4.5% to $33.3 billion at September 30, 2020, from $31.9 billion at June 30, 2020, and increased 26.6% from $26.3 billion at September 30, 2019. The increase in total assets from the prior year was driven by organic loan and deposit growth.

Asset Quality

The provision for credit losses totaled $14.7 million for the third quarter 2020, compared to $92.0 million for the second quarter 2020, and $3.8 million for the third quarter 2019. Net loan charge-offs (recoveries) in the third quarter 2020 were $8.2 million, or 0.13% of average loans (annualized), compared to $5.5 million, or 0.09%, in the second quarter 2020, and $(0.6) million, or (0.01)%, in the third quarter 2019.

Nonaccrual loans increased $6.8 million to $146.5 million during the quarter and increased $96.1 million from September 30, 2019. Loans past due 90 days and still accruing interest were $28.1 million at September 30, 2020, compared to zero at June 30, 2020 and September 30, 2019. Loans past due 30-89 days and still accruing interest totaled $24.3 million at September 30, 2020, an increase from $9.3 million at June 30, 2020, and a decrease from $29.5 million at September 30, 2019.

Repossessed assets totaled $8.6 million at September 30, 2020, a decrease of $0.8 million from $9.4 million at June 30, 2020, and a decrease of $6.9 million from $15.5 million at September 30, 2019. Classified assets totaled $325.7 million at September 30, 2020, an increase of $27.2 million from $298.5 million at June 30, 2020, and an increase of $105.2 million from $220.4 million at September 30, 2019.

The ratio of classified assets to Tier 1 capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 9.9% at September 30, 2020, compared to 9.5% at June 30, 2020, and 7.8% at September 30, 2019.

1 See reconciliation of Non-GAAP Financial Measures.

Segment Highlights

The Company's reportable segments are aggregated primarily based on geographic location, services offered, and markets served. The Company's regional segments, which include Arizona, Nevada, Southern California, and Northern California, provide full service banking and related services to their respective markets. The operations from the regional segments correspond to the following banking divisions: Alliance Bank of Arizona, Bank of Nevada and First Independent Bank, Torrey Pines Bank, and Bridge Bank.

The Company's National Business Lines ("NBL") segments provide specialized banking services to niche markets. The Company's NBL reportable segments include Homeowner Associations ("HOA") Services, Hotel Franchise Finance ("HFF"), Public & Nonprofit Finance, Technology & Innovation, and Other NBLs. These NBLs are managed centrally and are broader in geographic scope than our other segments, though still predominately located within our core market areas.

The 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 Arizona, Nevada, Southern California, Northern California, and NBL segments include loan and deposit growth, asset quality, and pre-tax income.

The regional segments reported gross loan balances of $11.2 billion at September 30, 2020, a decrease of $33 million during the quarter, and an increase of $1.5 billion during the last twelve months. The decline in loans during the quarter was driven by decreases in the Nevada and Southern California segments of $76 million and $46 million, respectively. These decreases were partially offset by increases in the Arizona and Northern California segments of $51 million and $38 million, respectively. During the last twelve months, each of the regional segments reported loan growth, with increases in the Northern California, Nevada, Arizona, and Southern California segments of $560 million, $433 million, $420 million, and $70 million, respectively. Total deposits for the regional segments were $19.5 billion, an increase of $1.5 billion during the quarter, and an increase of $4.3 billion during the last twelve months. The increase in deposits during the quarter was spread across all regional segments, with the largest increases in the Arizona and Southern California segments of $913 million and $478 million, respectively. The growth in deposits over the last twelve months was spread across all regional segments with increases in the Arizona, Southern California, Northern California, and Nevada segments of $2.6 billion, $749 million, $470 million, and $465 million, respectively.

Pre-tax income for the regional segments was $116.1 million for the three months ended September 30, 2020, an increase of $33.3 million from the three months ended June 30, 2020, and an increase of $12.1 million from the three months ended September 30, 2019. The increase in pre-tax income during the quarter was primarily attributable to increases in the Arizona and Southern California segments of $22.9 million and $9.5 million, respectively. These increases were partially offset by a decrease in the Nevada segment of $0.7 million. Pre-tax income from the three months ended September 30, 2019 was driven by increases in the Arizona and Northern California segments of $14.5 million and $3.2 million, respectively, which were partially offset by decreases in the Nevada and Southern California segments of $3.4 million and $2.1 million, respectively. For the nine months ended September 30, 2020, the regional segments reported total pre-tax income of $287.9 million, a decrease of $1.2 million compared to the nine months ended September 30, 2019. The decrease was driven by decreases in the Southern California and Nevada segments of $12.7 million and $4.6 million, respectively. These decreases were partially offset by increases in the Arizona and Northern California segments of $14.4 million and $1.6 million, respectively.

The NBL segments reported gross loan balances of $14.8 billion at September 30, 2020, an increase of $1.0 billion during the quarter, and an increase of $4.4 billion during the last twelve months. Each of the NBL segments reported loan growth during the quarter, with the largest increases in the Other NBLs and Technology & Innovation segments of $829 million and $123 million, respectively. During the last twelve months, each of the NBL segments reported loan growth, with the Other NBLs, Technology & Innovation, HFF, and Public & Nonprofit Finance segments contributing the largest increases of $3.1 billion, $952 million, $203 million, and $104 million, respectively. Total deposits for the NBL segments were $8.4 billion, an increase of $247 million during the quarter, and an increase of $2.0 billion during the last twelve months. The increase in deposits from the prior quarter is primarily attributable to the Technology & Innovation segment, which increased deposits by $230 million. The increase in deposits of $2.0 billion during the last twelve months is attributable to growth in the Technology & Innovation and HOA Services segments of $1.4 billion and $646 million, respectively.

Pre-tax income for the NBL segments was $109.1 million for the three months ended September 30, 2020, an increase of $34.3 million from the three months ended June 30, 2020, and an increase of $38.0 million from the three months ended September 30, 2019. The increase in pre-tax income from the prior quarter was driven by increases in the Technology & Innovation and HFF segments of $25.4 million and $16.1 million, respectively. These increases were partially offset by decreases in the Other NBLs and HOA Services segments of $4.7 million and $3.6 million, respectively. The drivers of the increase in pre-tax income from the same period in the prior year were the Technology & Innovation and Other NBLs segments, which had increases of $22.3 million and $17.8 million, respectively. Pre-tax income for the NBL segments for the nine months ended September 30, 2020 totaled $231.9 million, an increase of $41.2 million compared to the nine months ended September 30, 2019. The Other NBLs, Technology & Innovation, and HOA Services segments each reported an increase in pre-tax income of $47.4 million, $18.8 million, and $3.3 million, respectively. These increases in pre-tax income were offset by decreases in the HFF and Public & Nonprofit Finance segments of $24.4 million and $4.0 million, respectively.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its third quarter 2020 financial results at 12:00 p.m. ET on Friday, October 23, 2020. Participants may access the call by dialing 1-888-317-6003 and using passcode 4467607 or via live audio webcast using the website link https://services.choruscall.com/links/wal201016.html. 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 2:00 p.m. ET October 23rd through 9:00 a.m. ET November 23rd by dialing 1-877-344-7529 passcode: 10148637.

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.

Adoption of Accounting Standards

During the first quarter of 2020, the Company adopted the Accounting Standards Updates ("ASU") related to credit losses, which include ASU 2016-13, Measurement of Credit Losses on Financial Instruments, ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, ASU 2019-05, Financial Instruments - Credit Losses, and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses.

The new standards significantly change the impairment model for most financial assets that are measured at amortized cost, including off-balance sheet credit exposures, from an incurred loss model to an expected loss model. The amendments in ASU 2016-13 require that an organization measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted the amendments within ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. The Company recorded a cumulative effect adjustment to retained earnings, which resulted in a total decrease to retained earnings of $24.9 million as of January 1, 2020. This adjustment was due primarily to expected total losses under the new model in the Company's loan portfolio and its off-balance sheet credit exposures.

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, and the impact of the COVID-19 pandemic and related economic conditions. 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, 2019 as filed with the Securities and Exchange Commission; the potential adverse effects of the ongoing COVID-19 pandemic and any governmental or societal responses thereto, or other unusual and infrequently occurring events; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; 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 including in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and the rules and regulations that may be promulgated thereunder; or changes in accounting principles, policies or guidelines (including changes related to CECL); 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 $30 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country's top-performing banking companies. The company has ranked in the top 10 on the Forbes "Best Banks in America" list for five consecutive years, 2016-2020, and was named #1 best-performing of the 50 largest public U.S. banks for 2019 by S&P Global Market Intelligence. Its primary subsidiary, Western Alliance Bank, Member FDIC, helps business clients realize their ambitions with local teams of experienced bankers who deliver superior service and a full spectrum of customized loan, deposit and treasury management capabilities. Business clients also benefit from a powerful array of specialized financial services that provide strong expertise and tailored solutions for a wide variety of industries and sectors. A national presence with a regional footprint, Western Alliance Bank operates individually branded, full-service banking divisions and has 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 September 30,

2020 2019 Change %

(in millions)

Total assets $ 33,335.5 $ 26,324.2 26.6 %

Gross loans, net of deferred fees 26,014.0 20,152.8 29.1

Investment securities 4,701.1 4,148.1 13.3

Total deposits 28,843.4 22,440.8 28.5

Qualifying debt 618.8 388.9 59.1

Stockholders' equity 3,224.0 2,923.0 10.3

Tangible common equity, net of tax (1) 2,926.7 2,627.1 11.4





Selected Income Statement Data:

For the Three Months Ended September For the Nine Months Ended September 30, 30,

2020 2019 Change % 2020 2019 Change %

(in thousands, except per (in thousands, except per share data) share data)

Interest $ 304,843 $ 315,608 (3.4) % $ 930,297 $ 909,624 2.3 %income

Interest 20,105 49,186 (59.1) 78,139 141,185 (44.7) expense

Net interest 284,738 266,422 6.9 852,158 768,439 10.9 income

Provisionfor credit 14,661 3,803 NM 157,837 15,303 NM losses

Net interestincome afterprovision 270,077 262,619 2.8 694,321 753,136 (7.8) for creditlosses

Non-interest 20,606 19,441 6.0 46,985 49,069 (4.2) income

Non-interest 124,092 126,152 (1.6) 359,372 352,279 2.0 expense

Incomebefore 166,591 155,908 6.9 381,934 449,926 (15.1) income taxes

Income tax 30,822 28,533 8.0 68,929 78,819 (12.5) expense

Net income $ 135,769 $ 127,375 6.6 $ 313,005 $ 371,107 (15.7)

Dilutedearnings per $ 1.36 $ 1.24 9.7 $ 3.11 $ 3.59 (13.4) share

(1) See Reconciliation of Non-GAAP Financial Measures. NM 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 For the Nine Months Ended September September 30, 30,

2020 2019 Change % 2020 2019 Change %

Dilutedearnings per $ 1.36 $ 1.24 9.7 % $ 3.11 $ 3.59 (13.4 ) %share

Book valueper common 31.98 28.48 12.3 share

Tangiblebook valueper share, 29.03 25.60 13.4 net of tax(1)

Averagesharesoutstanding (inthousands):

Basic 99,850 102,041 (2.1 ) 100,322 103,024 (2.6 )

Diluted 100,059 102,451 (2.3 ) 100,574 103,468 (2.8 )

Commonshares 100,825 102,639 (1.8 ) outstanding

SelectedPerformance Ratios:

Return onaverage 1.66 % 1.94 % (14.4 ) % 1.38 % 2.03 % (32.0 ) %assets (2)

Return onaveragetangible 18.73 19.41 (3.5 ) 14.90 19.86 (25.0 ) common equity (1,2)

Net interest 3.71 4.41 (15.9 ) 4.03 4.56 (11.6 ) margin (2)

Efficiencyratio - tax 39.71 43.16 (8.0 ) 39.07 42.13 (7.3 ) equivalent basis (1)

Loan todeposit 90.19 89.80 0.4 ratio

AssetQuality Ratios:

Netcharge-offs(recoveries)to average 0.13 % (0.01 ) % (1,400.0 ) 0.06 % 0.02 % NM loansoutstanding(2)

Nonaccrualloans to 0.56 0.25 NM funded loans

Nonaccrualloans andrepossessed 0.47 0.25 88.0 assets tototal assets

Allowancefor loan 1.19 0.82 45.1 losses to funded loans

Allowancefor loanlosses to 212.03 327.83 (35.3 ) nonaccrualloans

Capital Ratios:Sep 30, 2020

Jun 30, 2020

Sep 30, 2019

Tangible common equity (1)

8.9

%

8.9

%

10.1

%

Common Equity Tier 1 (3)

10.0

10.2

10.3

Tier 1 Leverage ratio (3)

9.3

9.5

10.4

Tier 1 Capital (3)

10.3

10.5

10.6

Total Capital (3)

13.0

13.4

12.6

(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 September 30, 2020 are preliminary. NM Changes +/- 100% are not meaningful.

Capital Ratios: Sep 30, 2020 Jun 30, 2020 Sep 30, 2019

Tangible common equity (1) 8.9 % 8.9 % 10.1 %

Common Equity Tier 1 (3) 10.0 10.2 10.3

Tier 1 Leverage ratio (3) 9.3 9.5 10.4

Tier 1 Capital (3) 10.3 10.5 10.6

Total Capital (3) 13.0 13.4 12.6

(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 September 30, 2020 are preliminary. NM Changes +/- 100% are not meaningful.

Western Alliance Bancorporation and Subsidiaries

Condensed Consolidated Income Statements

Unaudited

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

(dollars in thousands, except per share data)

Interest income:

Loans $ 276,623 $ 278,932 $ 843,085 $ 808,099

Investment securities 27,403 29,660 83,024 87,694

Other 817 7,016 4,188 13,831

Total interest income 304,843 315,608 930,297 909,624

Interest expense:

Deposits 12,215 43,354 59,736 121,030

Qualifying debt 7,872 5,785 17,833 17,898

Borrowings 18 47 570 2,257

Total interest expense 20,105 49,186 78,139 141,185

Net interest income 284,738 266,422 852,158 768,439

Provision for credit 14,661 3,803 157,837 15,303 losses (1)

Net interest incomeafter provision for 270,077 262,619 694,321 753,136 credit losses

Non-interest income:

Service charges and 5,913 5,888 17,447 17,121 fees

Card income 1,873 1,729 4,768 5,195

Foreign currency income 1,755 1,321 4,242 3,564

Income from bank owned 1,345 979 8,977 2,938 life insurance

Income from equity 1,186 3,742 6,263 6,619 investments

Lending related incomeand gains (losses) on 705 539 2,072 1,343 sale of loans, net

Gain (loss) on sales of - 3,152 230 3,152 investment securities

Fair value gain (loss)adjustments on assets 5,882 222 (986) 4,628 measured at fair value,net

Other 1,947 1,869 3,972 4,509

Total non-interest 20,606 19,441 46,985 49,069 income

Non-interest expenses:

Salaries and employee 78,757 70,978 220,455 205,328 benefits

Legal, professional, 10,034 8,248 31,105 26,885 and directors' fees

Occupancy 9,426 8,263 25,752 24,251

Data processing 8,864 7,095 26,044 20,563

Deposit costs 3,246 11,537 14,098 24,930

Insurance 3,064 3,071 9,506 8,691

Loan and repossessed 1,771 1,953 5,280 5,419 asset expenses

Business development 950 1,443 4,062 4,972

Marketing 848 842 2,621 2,640

Card expense 505 548 1,631 1,892

Intangible amortization 373 387 1,120 1,161

Net loss (gain) onsales and valuations of 123 3,379 (1,335) 2,856 repossessed and otherassets

Other 6,131 8,408 19,033 22,691

Total non-interest 124,092 126,152 359,372 352,279 expense

Income before income 166,591 155,908 381,934 449,926 taxes

Income tax expense 30,822 28,533 68,929 78,819

Net income $ 135,769 $ 127,375 $ 313,005 $ 371,107



Earnings per share:

Diluted shares 100,059 102,451 100,574 103,468

Diluted earnings per $ 1.36 $ 1.24 $ 3.11 $ 3.59 share

(1)

Upon adoption of CECL on January 1, 2020, provision for credit losses has been modified to also include amounts related to unfunded loan commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

Upon adoption of CECL on January 1, 2020, provision for credit losses has(1) been modified to also include amounts related to unfunded loan commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Income Statements

Unaudited

Three Months Ended

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

(in thousands, except per share data)

Interest income:

Loans

$

276,623

$

289,576

$

276,886

$

284,971

$

278,932

Investment securities

27,403

28,254

27,367

28,194

29,660

Other

817

408

2,963

2,255

7,016

Total interest income

304,843

318,238

307,216

315,420

315,608

Interest expense:

Deposits

12,215

15,005

32,516

37,374

43,354

Qualifying debt

7,872

4,712

5,249

5,492

5,785

Borrowings

18

121

431

581

47

Total interest expense

20,105

19,838

38,196

43,447

49,186

Net interest income

284,738

298,400

269,020

271,973

266,422

Provision for credit losses (1)

14,661

92,000

51,176

3,964

3,803

Net interest income after provision for credit losses

270,077

206,400

217,844

268,009

262,619

Non-interest income:

Service charges and fees

5,913

5,130

6,404

6,233

5,888

Card income

1,873

1,178

1,717

1,784

1,729

Foreign currency income

1,755

1,159

1,328

1,423

1,321

Income from bank owned life insurance

1,345

6,670

962

963

979

Income from equity investments

1,186

1,311

3,766

1,671

3,742

Lending related income and gains (losses) on sale of loans, net

705

719

648

1,815

539

Gain (loss) on sales of investment securities

-

158

72

-

3,152

Fair value gain (loss) adjustments on assets measured at fair value, net

5,882

4,432

(11,300

)

491

222

Other

1,947

513

1,512

1,647

1,869

Total non-interest income

20,606

21,270

5,109

16,027

19,441

Non-interest expenses:

Salaries and employee benefits

78,757

69,634

72,064

73,946

70,978

Legal, professional, and directors' fees

10,034

10,669

10,402

10,124

8,248

Occupancy

9,426

8,101

8,225

8,256

8,263

Data processing

8,864

8,577

8,603

10,014

7,095

Deposit costs

3,246

3,514

7,338

6,789

11,537

Insurance

3,064

3,444

2,998

3,233

3,071

Loan and repossessed asset expenses

1,771

2,047

1,462

2,152

1,953

Business development

950

831

2,281

2,071

1,443

Marketing

848

869

904

1,559

842

Card expense

505

383

743

454

548

Intangible amortization

373

374

373

386

387

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

123

(6

)

(1,452

)

962

3,379

Other

6,131

6,362

6,540

9,789

8,408

Total non-interest expense

124,092

114,799

120,481

129,735

126,152

Income before income taxes

166,591

112,871

102,472

154,301

155,908

Income tax expense

30,822

19,599

18,508

26,236

28,533

Net income

$

135,769

$

93,272

$

83,964

$

128,065

$

127,375

Earnings per share:

Diluted shares

100,059

99,993

101,675

102,138

102,451

Diluted earnings per share

$

1.36

$

0.93

$

0.83

$

1.25

$

1.24

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Income Statements

Unaudited

Three Months Ended

Sep 30, Jun 30, 2020 Mar 31, 2020 Dec 31, Sep 30, 2020 2019 2019

(in thousands, except per share data)

Interest income:

Loans $ 276,623 $ 289,576 $ 276,886 $ 284,971 $ 278,932

Investment 27,403 28,254 27,367 28,194 29,660 securities

Other 817 408 2,963 2,255 7,016

Totalinterest 304,843 318,238 307,216 315,420 315,608 income

Interest expense:

Deposits 12,215 15,005 32,516 37,374 43,354

Qualifying 7,872 4,712 5,249 5,492 5,785 debt

Borrowings 18 121 431 581 47

Totalinterest 20,105 19,838 38,196 43,447 49,186 expense

Net interest 284,738 298,400 269,020 271,973 266,422 income

Provision forcredit losses 14,661 92,000 51,176 3,964 3,803 (1)

Net interestincome after 270,077 206,400 217,844 268,009 262,619 provision forcredit losses

Non-interest income:

Servicecharges and 5,913 5,130 6,404 6,233 5,888 fees

Card income 1,873 1,178 1,717 1,784 1,729

Foreigncurrency 1,755 1,159 1,328 1,423 1,321 income

Income frombank owned 1,345 6,670 962 963 979 lifeinsurance

Income fromequity 1,186 1,311 3,766 1,671 3,742 investments

Lendingrelatedincome andgains 705 719 648 1,815 539 (losses) onsale ofloans, net

Gain (loss)on sales of - 158 72 - 3,152 investmentsecurities

Fair valuegain (loss)adjustmentson assets 5,882 4,432 (11,300 ) 491 222 measured atfair value,net

Other 1,947 513 1,512 1,647 1,869

Totalnon-interest 20,606 21,270 5,109 16,027 19,441 income

Non-interest expenses:

Salaries andemployee 78,757 69,634 72,064 73,946 70,978 benefits

Legal,professional,and 10,034 10,669 10,402 10,124 8,248 directors'fees

Occupancy 9,426 8,101 8,225 8,256 8,263

Data 8,864 8,577 8,603 10,014 7,095 processing

Deposit costs 3,246 3,514 7,338 6,789 11,537

Insurance 3,064 3,444 2,998 3,233 3,071

Loan andrepossessed 1,771 2,047 1,462 2,152 1,953 assetexpenses

Business 950 831 2,281 2,071 1,443 development

Marketing 848 869 904 1,559 842

Card expense 505 383 743 454 548

Intangible 373 374 373 386 387 amortization

Net loss(gain) onsales andvaluations of 123 (6 ) (1,452 ) 962 3,379 repossessedand otherassets

Other 6,131 6,362 6,540 9,789 8,408

Totalnon-interest 124,092 114,799 120,481 129,735 126,152 expense

Income before 166,591 112,871 102,472 154,301 155,908 income taxes

Income tax 30,822 19,599 18,508 26,236 28,533 expense

Net income $ 135,769 $ 93,272 $ 83,964 $ 128,065 $ 127,375



Earnings per share:

Diluted 100,059 99,993 101,675 102,138 102,451 shares

Dilutedearnings per $ 1.36 $ 0.93 $ 0.83 $ 1.25 $ 1.24 share

(1)

Upon adoption of CECL on January 1, 2020, provision for credit losses has been modified to also include amounts related to unfunded loan commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

Upon adoption of CECL on January 1, 2020, provision for credit losses has(1) been modified to also include amounts related to unfunded loan commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Balance Sheets

Unaudited

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

(in millions)

Assets:

Cash and due from banks

$

1,418.7

$

1,518.5

$

415.7

$

434.6

$

872.1

Investment securities

4,701.1

4,193.8

4,355.3

4,036.6

4,148.1

Loans held for sale

20.8

20.2

20.9

21.8

21.8

Loans held for investment:

Commercial and industrial

13,648.6

12,756.8

11,204.3

9,382.0

8,707.8

Commercial real estate - non-owner occupied

5,407.4

5,344.3

5,292.7

5,245.6

5,031.3

Commercial real estate - owner occupied

2,213.5

2,257.1

2,289.0

2,316.9

2,299.8

Construction and land development

2,300.5

2,197.5

2,059.4

1,952.2

2,155.6

Residential real estate

2,387.1

2,404.8

2,239.7

2,147.7

1,862.5

Consumer

36.1

48.7

60.2

57.1

74.0

Gross loans, net of deferred fees

25,993.2

25,009.2

23,145.3

21,101.5

20,131.0

Allowance for credit losses

(310.5

)

(310.5

)

(235.3

)

(167.8

)

(165.0

)

Loans, net

25,682.7

24,698.7

22,910.0

20,933.7

19,966.0

Premises and equipment, net

128.3

127.8

125.9

125.8

125.0

Operating lease right-of-use asset

71.4

70.3

72.3

72.6

74.5

Other assets acquired through foreclosure, net

8.6

9.4

10.6

13.9

15.5

Bank owned life insurance

175.5

174.9

175.0

174.0

173.1

Goodwill and other intangibles, net

299.0

296.9

297.2

297.6

298.0

Other assets

829.4

795.9

775.3

711.3

630.1

Total assets

$

33,335.5

$

31,906.4

$

29,158.2

$

26,821.9

$

26,324.2

Liabilities and Stockholders' Equity:

Liabilities:

Deposits

Non-interest bearing demand deposits

$

13,013.0

$

12,236.0

$

9,886.5

$

8,537.9

$

8,755.7

Interest bearing:

Demand

3,554.6

3,508.1

3,578.8

2,760.9

2,509.4

Savings and money market

10,574.9

9,823.2

8,978.1

9,120.7

9,058.4

Certificates of deposit

1,700.9

1,977.3

2,387.3

2,377.0

2,117.3

Total deposits

28,843.4

27,544.6

24,830.7

22,796.5

22,440.8

Customer repurchase agreements

19.7

25.4

23.0

16.7

15.0

Total customer funds

28,863.1

27,570.0

24,853.7

22,813.2

22,455.8

Borrowings

10.0

10.0

308.0

-

-

Qualifying debt

618.8

617.7

389.9

393.6

388.9

Operating lease liability

78.6

76.9

78.7

78.1

79.8

Accrued interest payable and other liabilities

541.0

529.4

528.3

520.3

476.7

Total liabilities

30,111.5

28,804.0

26,158.6

23,805.2

23,401.2

Stockholders' Equity:

Common stock and additional paid-in capital

1,312.4

1,306.3

1,300.3

1,311.4

1,305.5

Retained earnings

1,833.0

1,722.4

1,661.8

1,680.3

1,581.9

Accumulated other comprehensive income

78.6

73.7

37.5

25.0

35.6

Total stockholders' equity

3,224.0

3,102.4

2,999.6

3,016.7

2,923.0

Total liabilities and stockholders' equity

$

33,335.5

$

31,906.4

$

29,158.2

$

26,821.9

$

26,324.2

Western Alliance Bancorporation and Subsidiaries

Five Quarter Condensed Consolidated Balance Sheets

Unaudited

Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019

(in millions)

Assets:

Cash and due $ 1,418.7 $ 1,518.5 $ 415.7 $ 434.6 $ 872.1 from banks

Investment 4,701.1 4,193.8 4,355.3 4,036.6 4,148.1 securities

Loans held 20.8 20.2 20.9 21.8 21.8 for sale

Loans heldfor investment:

Commercialand 13,648.6 12,756.8 11,204.3 9,382.0 8,707.8 industrial

Commercialreal estate - 5,407.4 5,344.3 5,292.7 5,245.6 5,031.3 non-owneroccupied

Commercialreal estate - 2,213.5 2,257.1 2,289.0 2,316.9 2,299.8 owneroccupied

Constructionand land 2,300.5 2,197.5 2,059.4 1,952.2 2,155.6 development

Residential 2,387.1 2,404.8 2,239.7 2,147.7 1,862.5 real estate

Consumer 36.1 48.7 60.2 57.1 74.0

Gross loans,net of 25,993.2 25,009.2 23,145.3 21,101.5 20,131.0 deferred fees

Allowance for (310.5 ) (310.5 ) (235.3 ) (167.8 ) (165.0 ) credit losses

Loans, net 25,682.7 24,698.7 22,910.0 20,933.7 19,966.0

Premises andequipment, 128.3 127.8 125.9 125.8 125.0 net

Operatinglease 71.4 70.3 72.3 72.6 74.5 right-of-useasset

Other assetsacquiredthrough 8.6 9.4 10.6 13.9 15.5 foreclosure,net

Bank ownedlife 175.5 174.9 175.0 174.0 173.1 insurance

Goodwill andother 299.0 296.9 297.2 297.6 298.0 intangibles,net

Other assets 829.4 795.9 775.3 711.3 630.1

Total assets $ 33,335.5 $ 31,906.4 $ 29,158.2 $ 26,821.9 $ 26,324.2

Liabilitiesand Stockholders'Equity:

Liabilities:

Deposits

Non-interestbearing $ 13,013.0 $ 12,236.0 $ 9,886.5 $ 8,537.9 $ 8,755.7 demanddeposits

Interest bearing:

Demand 3,554.6 3,508.1 3,578.8 2,760.9 2,509.4

Savings and 10,574.9 9,823.2 8,978.1 9,120.7 9,058.4 money market

Certificates 1,700.9 1,977.3 2,387.3 2,377.0 2,117.3 of deposit

Total 28,843.4 27,544.6 24,830.7 22,796.5 22,440.8 deposits

Customerrepurchase 19.7 25.4 23.0 16.7 15.0 agreements

Totalcustomer 28,863.1 27,570.0 24,853.7 22,813.2 22,455.8 funds

Borrowings 10.0 10.0 308.0 - -

Qualifying 618.8 617.7 389.9 393.6 388.9 debt

Operatinglease 78.6 76.9 78.7 78.1 79.8 liability

Accruedinterestpayable and 541.0 529.4 528.3 520.3 476.7 otherliabilities

Total 30,111.5 28,804.0 26,158.6 23,805.2 23,401.2 liabilities

Stockholders' Equity:

Common stockandadditional 1,312.4 1,306.3 1,300.3 1,311.4 1,305.5 paid-incapital

Retained 1,833.0 1,722.4 1,661.8 1,680.3 1,581.9 earnings

Accumulatedother 78.6 73.7 37.5 25.0 35.6 comprehensiveincome

Totalstockholders' 3,224.0 3,102.4 2,999.6 3,016.7 2,923.0 equity

Totalliabilitiesand $ 33,335.5 $ 31,906.4 $ 29,158.2 $ 26,821.9 $ 26,324.2 stockholders'equity

Western Alliance Bancorporation and Subsidiaries

Changes in the Allowance For Credit Losses on Loans

Unaudited

Three Months Ended

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

(in thousands)

Allowance for loan losses

Balance, beginning of period

$

310,550

$

235,329

$

167,797

$

165,021

$

160,409

Beginning balance adjustment from adoption of CECL

-

-

19,128

-

-

Provision for credit losses (1)

8,204

80,685

45,241

4,000

4,000

Recoveries of loans previously charged-off:

Commercial and industrial

212

586

1,299

744

2,549

Commercial real estate - non-owner occupied

-

(365

)

1,931

4

-

Commercial real estate - owner occupied

5

3

4

5

8

Construction and land development

6

7

10

10

17

Residential real estate

355

18

12

161

131

Consumer

1

10

4

6

6

Total recoveries

579

259

3,260

930

2,711

Loans charged-off:

Commercial and industrial

7,137

4,795

97

2,028

1,950

Commercial real estate - non-owner occupied

1,246

885

-

-

-

Commercial real estate - owner occupied

83

43

-

-

139

Construction and land development

-

-

-

-

-

Residential real estate

307

-

-

-

9

Consumer

-

-

-

126

1

Total loans charged-off

8,773

5,723

97

2,154

2,099

Net loan charge-offs (recoveries)

8,194

5,464

(3,163

)

1,224

(612

)

Balance, end of period

$

310,560

$

310,550

$

235,329

$

167,797

$

165,021

Allowance for unfunded loan commitments

Balance, beginning of period

$

36,292

$

29,644

$

8,955

$

8,991

$

9,188

Beginning balance adjustment from adoption of CECL

-

-

15,089

-

-

Provision for credit losses (1)

8,142

6,648

5,600

(36

)

(197

)

Balance, end of period (2)

$

44,434

$

36,292

$

29,644

$

8,955

$

8,991

Components of the allowance for credit losses on loans

Allowance for loan losses

$

310,560

$

310,550

$

235,329

$

167,797

$

165,021

Allowance for unfunded loan commitments

44,434

36,292

29,644

8,955

8,991

Total allowance for credit losses on loans

$

354,994

$

346,842

$

264,973

$

176,752

$

174,012

Net charge-offs (recoveries) to average loans - annualized

0.13

%

0.09

%

(0.06

)

%

0.02

%

(0.01

)

%

Allowance for loan losses to funded loans

1.19

%

1.24

%

1.02

%

0.80

%

0.82

%

Allowance for credit losses to funded loans

1.37

1.39

1.14

0.84

0.86

Allowance for loan losses to nonaccrual loans

212.03

222.26

271.83

299.81

327.83

Allowance for credit losses to nonaccrual loans

242.36

248.24

306.07

315.81

345.69

Western Alliance Bancorporation and Subsidiaries

Changes in the Allowance For Credit Losses on Loans

Unaudited

Three Months Ended

Sep 30, Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 2020

(in thousands)

Allowancefor loan losses

Balance,beginning of $ 310,550 $ 235,329 $ 167,797 $ 165,021 $ 160,409 period

Beginningbalanceadjustment - - 19,128 - - fromadoption ofCECL

Provisionfor credit 8,204 80,685 45,241 4,000 4,000 losses (1)

Recoveriesof loans previouslycharged-off:

Commercialand 212 586 1,299 744 2,549 industrial

Commercialreal estate - (365 ) 1,931 4 - - non-owneroccupied

Commercialreal estate 5 3 4 5 8 - owneroccupied

Constructionand land 6 7 10 10 17 development

Residential 355 18 12 161 131 real estate

Consumer 1 10 4 6 6

Total 579 259 3,260 930 2,711 recoveries

Loans charged-off:

Commercialand 7,137 4,795 97 2,028 1,950 industrial

Commercialreal estate 1,246 885 - - - - non-owneroccupied

Commercialreal estate 83 43 - - 139 - owneroccupied

Constructionand land - - - - - development

Residential 307 - - - 9 real estate

Consumer - - - 126 1

Total loans 8,773 5,723 97 2,154 2,099 charged-off

Net loancharge-offs 8,194 5,464 (3,163 ) 1,224 (612 ) (recoveries)

Balance, end $ 310,560 $ 310,550 $ 235,329 $ 167,797 $ 165,021 of period



Allowancefor unfunded loancommitments

Balance,beginning of $ 36,292 $ 29,644 $ 8,955 $ 8,991 $ 9,188 period

Beginningbalanceadjustment - - 15,089 - - fromadoption ofCECL

Provisionfor credit 8,142 6,648 5,600 (36 ) (197 ) losses (1)

Balance, endof period $ 44,434 $ 36,292 $ 29,644 $ 8,955 $ 8,991 (2)



Componentsof theallowance for creditlosses onloans

Allowancefor loan $ 310,560 $ 310,550 $ 235,329 $ 167,797 $ 165,021 losses

Allowancefor unfunded 44,434 36,292 29,644 8,955 8,991 loancommitments

Totalallowancefor credit $ 354,994 $ 346,842 $ 264,973 $ 176,752 $ 174,012 losses onloans



Netcharge-offs(recoveries) 0.13 % 0.09 % (0.06 ) % 0.02 % (0.01 ) %to averageloans -annualized



Allowancefor loan 1.19 % 1.24 % 1.02 % 0.80 % 0.82 %losses tofunded loans

Allowancefor credit 1.37 1.39 1.14 0.84 0.86 losses tofunded loans

Allowancefor loanlosses to 212.03 222.26 271.83 299.81 327.83 nonaccrualloans

Allowancefor creditlosses to 242.36 248.24 306.07 315.81 345.69 nonaccrualloans

(1)

Upon adoption of CECL on January 1, 2020, the provision for credit losses presented in the income statement has been modified to include amounts related to unfunded loan commitments and investment securities. The above tables reflect the provision for credit losses on funded and unfunded loans. A recovery of credit losses on investment securities totaled $1.7 million, resulting in an ending allowance for credit losses on investment securities of $6.0 million.

(2)

The allowance for unfunded loan commitments is included as part of accrued interest payable and other liabilities on the balance sheet.

Upon adoption of CECL on January 1, 2020, the provision for credit losses presented in the income statement has been modified to include amounts related to unfunded loan commitments and investment securities. The above(1) tables reflect the provision for credit losses on funded and unfunded loans. A recovery of credit losses on investment securities totaled $1.7 million, resulting in an ending allowance for credit losses on investment securities of $6.0 million.

(2) The allowance for unfunded loan commitments is included as part of accrued interest payable and other liabilities on the balance sheet.

Western Alliance Bancorporation and Subsidiaries

Asset Quality Metrics

Unaudited

Three Months Ended

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

(in thousands)

Nonaccrual loans

$

146,472

$

139,721

$

86,573

$

55,968

$

50,338

Nonaccrual loans to funded loans

0.56

%

0.56

%

0.37

%

0.27

%

0.25

%

Repossessed assets

$

8,591

$

9,424

$

10,647

$

13,850

$

15,483

Nonaccrual loans and repossessed assets to total assets

0.47

%

0.47

%

0.33

%

0.26

%

0.25

%

Loans past due 90 days, still accruing

$

28,129

$

-

$

-

$

-

$

-

Loans past due 90 days and still accruing to funded loans

0.11

%

-

%

-

%

-

%

-

%

Loans past due 30 to 89 days, still accruing

$

24,259

$

9,267

$

38,461

$

14,479

$

29,502

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

0.09

%

0.04

%

0.17

%

0.07

%

0.15

%

Special mention loans

$

476,839

$

395,537

$

104,220

$

180,479

$

233,835

Special mention loans to funded loans

1.83

%

1.58

%

0.45

%

0.86

%

1.16

%

Classified loans on accrual

$

170,546

$

149,298

$

149,812

$

91,286

$

139,576

Classified loans on accrual to funded loans

0.66

%

0.60

%

0.65

%

0.43

%

0.69

%

Classified assets

$

325,659

$

298,493

$

247,082

$

171,246

$

220,423

Classified assets to total assets

0.98

%

0.94

%

0.85

%

0.64

%

0.84

%

Western Alliance Bancorporation and Subsidiaries

Asset Quality Metrics

Unaudited

Three Months Ended

Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, 2020 2020 2020 2019 2019

(in thousands)

Nonaccrual $ 146,472 $ 139,721 $ 86,573 $ 55,968 $ 50,338 loans

Nonaccrualloans to 0.56 % 0.56 % 0.37 % 0.27 % 0.25 %fundedloans

Repossessed $ 8,591 $ 9,424 $ 10,647 $ 13,850 $ 15,483 assets

Nonaccrualloans andrepossessed 0.47 % 0.47 % 0.33 % 0.26 % 0.25 %assets tototalassets



Loans pastdue 90 $ 28,129 $ - $ - $ - $ - days, stillaccruing

Loans pastdue 90 daysand still 0.11 % - % - % - % - %accruing tofundedloans

Loans pastdue 30 to89 days, $ 24,259 $ 9,267 $ 38,461 $ 14,479 $ 29,502 stillaccruing

Loans pastdue 30 to89 days,still 0.09 % 0.04 % 0.17 % 0.07 % 0.15 %accruing tofundedloans



Specialmention $ 476,839 $ 395,537 $ 104,220 $ 180,479 $ 233,835 loans

Specialmentionloans to 1.83 % 1.58 % 0.45 % 0.86 % 1.16 %fundedloans



Classifiedloans on $ 170,546 $ 149,298 $ 149,812 $ 91,286 $ 139,576 accrual

Classifiedloans onaccrual to 0.66 % 0.60 % 0.65 % 0.43 % 0.69 %fundedloans

Classified $ 325,659 $ 298,493 $ 247,082 $ 171,246 $ 220,423 assets

Classifiedassets to 0.98 % 0.94 % 0.85 % 0.64 % 0.84 %totalassets

Western Alliance Bancorporation and Subsidiaries

Analysis of Average Balances, Yields and Rates

Unaudited

Three Months Ended

September 30, 2020

June 30, 2020

Average

Balance

Interest

Average Yield /

Cost

Average

Balance

Interest

Average Yield /

Cost

($ in millions)

($ in thousands)

($ in millions)

($ in thousands)

Interest earning assets

Loans:

Commercial and industrial

$

12,687.9

$

130,041

4.17

%

12,318.3

$

141,885

4.73

%

CRE - non-owner occupied

5,393.1

63,813

4.72

5,345.0

65,609

4.95

CRE - owner occupied

2,232.7

26,645

4.85

2,273.7

27,517

4.97

Construction and land development

2,209.3

32,293

5.83

2,128.5

30,900

5.86

Residential real estate

2,396.0

23,358

3.88

2,329.4

22,970

3.97

Consumer

38.5

473

4.89

53.7

695

5.21

Loans held for sale

20.3

-

-

21.7

-

-

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

24,977.8

276,623

4.47

24,470.3

289,576

4.82

Securities:

Securities - taxable

2,811.6

14,769

2.09

2,781.3

16,254

2.35

Securities - tax-exempt

1,556.4

12,634

4.07

1,403.3

12,000

4.34

Total securities (1)

4,368.0

27,403

2.79

4,184.6

28,254

3.02

Cash and other

1,926.4

817

0.17

671.4

408

0.24

Total interest earning assets

31,272.2

304,843

3.97

29,326.3

318,238

4.46

Non-interest earning assets

Cash and due from banks

163.8

162.0

Allowance for credit losses

(325.0

)

(271.2

)

Bank owned life insurance

175.0

186.6

Other assets

1,237.4

1,221.8

Total assets

$

32,523.4

$

30,625.5

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing transaction accounts

$

3,636.3

$

1,463

0.16

%

$

3,495.4

$

1,565

0.18

%

Savings and money market

10,170.1

5,661

0.22

9,428.4

5,564

0.24

Certificates of deposit

1,845.5

5,091

1.10

2,150.5

7,876

1.47

Total interest-bearing deposits

15,651.9

12,215

0.31

15,074.3

15,005

0.40

Short-term borrowings

36.0

18

0.20

267.4

121

0.18

Qualifying debt

616.2

7,872

5.08

489.0

4,712

3.88

Total interest-bearing liabilities

16,304.1

20,105

0.49

15,830.7

19,838

0.50

Interest cost of funding earning assets

0.26

0.27

Non-interest-bearing liabilities

Non-interest-bearing demand deposits

12,422.2

11,130.0

Other liabilities

617.0

608.7

Stockholders' equity

3,180.1

3,056.1

Total liabilities and stockholders' equity

$

32,523.4

$

30,625.5

Net interest income and margin (4)

$

284,738

3.71

%

$

298,400

4.19

%

Western Alliance Bancorporation and Subsidiaries

Analysis of Average Balances, Yields and Rates

Unaudited

Three Months Ended

September 30, 2020 June 30, 2020

Average Average Average Average Interest Yield / Interest Yield / Balance Balance Cost Cost

($ in ($ in ($ in ($ in millions) thousands) millions) thousands)

Interest earning assets

Loans:

Commercial and industrial $ 12,687.9 $ 130,041 4.17 % 12,318.3 $ 141,885 4.73 %

CRE - non-owner occupied 5,393.1 63,813 4.72 5,345.0 65,609 4.95

CRE - owner occupied 2,232.7 26,645 4.85 2,273.7 27,517 4.97

Construction and land 2,209.3 32,293 5.83 2,128.5 30,900 5.86 development

Residential real estate 2,396.0 23,358 3.88 2,329.4 22,970 3.97

Consumer 38.5 473 4.89 53.7 695 5.21

Loans held for sale 20.3 - - 21.7 - -

Total loans (1), (2), (3) 24,977.8 276,623 4.47 24,470.3 289,576 4.82

Securities:

Securities - taxable 2,811.6 14,769 2.09 2,781.3 16,254 2.35

Securities - tax-exempt 1,556.4 12,634 4.07 1,403.3 12,000 4.34

Total securities (1) 4,368.0 27,403 2.79 4,184.6 28,254 3.02

Cash and other 1,926.4 817 0.17 671.4 408 0.24

Total interest earning 31,272.2 304,843 3.97 29,326.3 318,238 4.46 assets

Non-interest earning assets

Cash and due from banks 163.8 162.0

Allowance for credit (325.0 ) (271.2 ) losses

Bank owned life insurance 175.0 186.6

Other assets 1,237.4 1,221.8

Total assets $ 32,523.4 $ 30,625.5

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing $ 3,636.3 $ 1,463 0.16 % $ 3,495.4 $ 1,565 0.18 %transaction accounts

Savings and money market 10,170.1 5,661 0.22 9,428.4 5,564 0.24

Certificates of deposit 1,845.5 5,091 1.10 2,150.5 7,876 1.47

Total interest-bearing 15,651.9 12,215 0.31 15,074.3 15,005 0.40 deposits

Short-term borrowings 36.0 18 0.20 267.4 121 0.18

Qualifying debt 616.2 7,872 5.08 489.0 4,712 3.88

Total interest-bearing 16,304.1 20,105 0.49 15,830.7 19,838 0.50 liabilities

Interest cost of funding 0.26 0.27 earning assets

Non-interest-bearing liabilities

Non-interest-bearing 12,422.2 11,130.0 demand deposits

Other liabilities 617.0 608.7

Stockholders' equity 3,180.1 3,056.1

Total liabilities and $ 32,523.4 $ 30,625.5 stockholders' equity

Net interest income and $ 284,738 3.71 % $ 298,400 4.19 %margin (4)

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $7.2 million and $7.0 million for the three months ended September 30, 2020 and June 30, 2020, respectively.

(2)

Included in the yield computation are net loan fees of $18.2 million and $27.8 million for the three months ended September 30, 2020 and June 30, 2020, 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.

Yields on loans and securities have been adjusted to a tax equivalent(1) basis. The tax equivalent adjustment was $7.2 million and $7.0 million for the three months ended September 30, 2020 and June 30, 2020, respectively.

Included in the yield computation are net loan fees of $18.2 million and(2) $27.8 million for the three months ended September 30, 2020 and June 30, 2020, 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

September 30, 2020

September 30, 2019

Average

Balance

Interest

Average Yield /

Cost

Average

Balance

Interest

Average Yield /

Cost

($ in millions)

($ in thousands)

($ in millions)

($ in thousands)

Interest earning assets

Loans:

Commercial and industrial

$

12,687.9

$

130,041

4.17

%

$

8,423.0

$

118,332

5.72

%

CRE - non-owner occupied

5,393.1

63,813

4.72

4,722.2

69,421

5.85

CRE - owner occupied

2,232.7

26,645

4.85

2,259.6

30,099

5.38

Construction and land development

2,209.3

32,293

5.83

2,226.3

39,177

7.00

Residential real estate

2,396.0

23,358

3.88

1,701.6

20,913

4.88

Consumer

38.5

473

4.89

69.5

990

5.65

Loans held for sale

20.3

-

-

0.2

-

-

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

24,977.8

276,623

4.47

19,402.4

278,932

5.79

Securities:

Securities - taxable

2,811.6

14,769

2.09

3,073.1

20,575

2.66

Securities - tax-exempt

1,556.4

12,634

4.07

1,062.1

9,085

4.30

Total securities (1)

4,368.0

27,403

2.79

4,135.2

29,660

3.08

Cash and other

1,926.4

817

0.17

1,009.9

7,016

2.76

Total interest earning assets

31,272.2

304,843

3.97

24,547.5

315,608

5.20

Non-interest earning assets

Cash and due from banks

163.8

346.8

Allowance for credit losses

(325.0

)

(162.6

)

Bank owned life insurance

175.0

172.5

Other assets

1,237.4

1,094.2

Total assets

$

32,523.4

$

25,998.4

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing transaction accounts

$

3,636.3

$

1,463

0.16

%

$

2,488.6

$

5,061

0.81

%

Savings and money market

10,170.1

5,661

0.22

8,456.5

26,608

1.25

Certificates of deposit

1,845.5

5,091

1.10

2,250.4

11,685

2.06

Total interest-bearing deposits

15,651.9

12,215

0.31

13,195.5

43,354

1.30

Short-term borrowings

36.0

18

0.20

17.5

47

1.07

Qualifying debt

616.2

7,872

5.08

387.8

5,785

5.92

Total interest-bearing liabilities

16,304.1

20,105

0.49

13,600.8

49,186

1.43

Interest cost of funding earning assets

0.26

0.79

Non-interest-bearing liabilities

Non-interest-bearing demand deposits

12,422.2

8,916.6

Other liabilities

617.0

579.6

Stockholders' equity

3,180.1

2,901.4

Total liabilities and stockholders' equity

$

32,523.4

$

25,998.4

Net interest income and margin (4)

$

284,738

3.71

%

$

266,422

4.41

%

Western Alliance Bancorporation and Subsidiaries

Analysis of Average Balances, Yields and Rates

Unaudited

Three Months Ended

September 30, 2020 September 30, 2019

Average Average Average Average Interest Yield / Interest Yield / Balance Balance Cost Cost

($ in ($ in ($ in ($ in millions) thousands) millions) thousands)

Interest earning assets

Loans:

Commercial and industrial $ 12,687.9 $ 130,041 4.17 % $ 8,423.0 $ 118,332 5.72 %

CRE - non-owner occupied 5,393.1 63,813 4.72 4,722.2 69,421 5.85

CRE - owner occupied 2,232.7 26,645 4.85 2,259.6 30,099 5.38

Construction and land 2,209.3 32,293 5.83 2,226.3 39,177 7.00 development

Residential real estate 2,396.0 23,358 3.88 1,701.6 20,913 4.88

Consumer 38.5 473 4.89 69.5 990 5.65

Loans held for sale 20.3 - - 0.2 - -

Total loans (1), (2), (3) 24,977.8 276,623 4.47 19,402.4 278,932 5.79

Securities:

Securities - taxable 2,811.6 14,769 2.09 3,073.1 20,575 2.66

Securities - tax-exempt 1,556.4 12,634 4.07 1,062.1 9,085 4.30

Total securities (1) 4,368.0 27,403 2.79 4,135.2 29,660 3.08

Cash and other 1,926.4 817 0.17 1,009.9 7,016 2.76

Total interest earning 31,272.2 304,843 3.97 24,547.5 315,608 5.20 assets

Non-interest earning assets

Cash and due from banks 163.8 346.8

Allowance for credit (325.0 ) (162.6 ) losses

Bank owned life insurance 175.0 172.5

Other assets 1,237.4 1,094.2

Total assets $ 32,523.4 $ 25,998.4

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing $ 3,636.3 $ 1,463 0.16 % $ 2,488.6 $ 5,061 0.81 %transaction accounts

Savings and money market 10,170.1 5,661 0.22 8,456.5 26,608 1.25

Certificates of deposit 1,845.5 5,091 1.10 2,250.4 11,685 2.06

Total interest-bearing 15,651.9 12,215 0.31 13,195.5 43,354 1.30 deposits

Short-term borrowings 36.0 18 0.20 17.5 47 1.07

Qualifying debt 616.2 7,872 5.08 387.8 5,785 5.92

Total interest-bearing 16,304.1 20,105 0.49 13,600.8 49,186 1.43 liabilities

Interest cost of funding 0.26 0.79 earning assets

Non-interest-bearing liabilities

Non-interest-bearing 12,422.2 8,916.6 demand deposits

Other liabilities 617.0 579.6

Stockholders' equity 3,180.1 2,901.4

Total liabilities and $ 32,523.4 $ 25,998.4 stockholders' equity

Net interest income and $ 284,738 3.71 % $ 266,422 4.41 %margin (4)

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $7.2 million and $6.4 million for the three months ended September 30, 2020 and 2019, respectively.

(2)

Included in the yield computation are net loan fees of $18.2 million and $13.4 million for the three months ended September 30, 2020 and 2019, 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.

Yields on loans and securities have been adjusted to a tax equivalent(1) basis. The tax equivalent adjustment was $7.2 million and $6.4 million for the three months ended September 30, 2020 and 2019, respectively.

Included in the yield computation are net loan fees of $18.2 million and(2) $13.4 million for the three months ended September 30, 2020 and 2019, 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

Nine Months Ended

September 30, 2020

September 30, 2019

Average

Balance

Interest

Average Yield /

Cost

Average

Balance

Interest

Average Yield /

Cost

($ in millions)

($ in thousands)

($ in millions)

($ in thousands)

Interest earning assets

Loans:

Commercial and industrial

$

11,556.5

$

396,578

4.69

%

$

7,955.6

$

340,808

5.88

%

CRE - non-owner occupied

5,325.6

198,335

4.99

4,468.4

199,372

5.98

CRE - owner occupied

2,262.4

83,353

5.02

2,279.9

90,113

5.39

Construction and land development

2,115.0

95,451

6.05

2,210.2

118,687

7.20

Residential real estate

2,294.9

67,122

3.91

1,535.9

56,275

4.90

Consumer

49.2

1,922

5.22

64.5

2,844

5.90

Loans held for sale

21.3

324

2.03

0.1

-

-

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

23,624.9

843,085

4.83

18,514.6

808,099

5.92

Securities:

Securities - taxable

2,826.0

48,271

2.28

2,865.6

60,641

2.83

Securities - tax-exempt

1,376.6

34,753

4.25

979.7

27,053

4.62

Total securities (1)

4,202.6

83,024

2.93

3,845.3

87,694

3.29

Cash and other

1,136.2

4,188

0.49

700.7

13,831

2.64

Total interest earning assets

28,963.7

930,297

4.39

23,060.6

909,624

5.38

Non-interest earning assets

Cash and due from banks

173.9

225.9

Allowance for credit losses

(263.2

)

(157.8

)

Bank owned life insurance

178.7

171.4

Other assets

1,206.1

1,098.6

Total assets

$

30,259.2

$

24,398.7

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing transaction accounts

$

3,410.9

$

7,530

0.29

%

$

2,511.9

$

16,194

0.86

%

Savings and money market

9,546.3

28,875

0.40

7,854.9

73,283

1.25

Certificates of deposit

2,113.0

23,331

1.47

2,114.6

31,553

1.99

Total interest-bearing deposits

15,070.2

59,736

0.53

12,481.4

121,030

1.30

Short-term borrowings

150.1

570

0.51

129.4

2,257

2.33

Qualifying debt

500.5

17,833

4.76

376.2

17,898

6.36

Total interest-bearing liabilities

15,720.8

78,139

0.66

12,987.0

141,185

1.45

Interest cost of funding earning assets

0.36

0.82

Non-interest-bearing liabilities

Non-interest-bearing demand deposits

10,813.2

8,118.8

Other liabilities

622.9

495.6

Stockholders' equity

3,102.3

2,797.3

Total liabilities and stockholders' equity

$

30,259.2

$

24,398.7

Net interest income and margin (4)

$

852,158

4.03

%

$

768,439

4.56

%

Western Alliance Bancorporation and Subsidiaries

Analysis of Average Balances, Yields and Rates

Unaudited

Nine Months Ended

September 30, 2020 September 30, 2019

Average Average Average Average Interest Yield / Interest Yield / Balance Balance Cost Cost

($ in ($ in ($ in ($ in millions) thousands) millions) thousands)

Interest earning assets

Loans:

Commercial and industrial $ 11,556.5 $ 396,578 4.69 % $ 7,955.6 $ 340,808 5.88 %

CRE - non-owner occupied 5,325.6 198,335 4.99 4,468.4 199,372 5.98

CRE - owner occupied 2,262.4 83,353 5.02 2,279.9 90,113 5.39

Construction and land 2,115.0 95,451 6.05 2,210.2 118,687 7.20 development

Residential real estate 2,294.9 67,122 3.91 1,535.9 56,275 4.90

Consumer 49.2 1,922 5.22 64.5 2,844 5.90

Loans held for sale 21.3 324 2.03 0.1 - -

Total loans (1), (2), (3) 23,624.9 843,085 4.83 18,514.6 808,099 5.92

Securities:

Securities - taxable 2,826.0 48,271 2.28 2,865.6 60,641 2.83

Securities - tax-exempt 1,376.6 34,753 4.25 979.7 27,053 4.62

Total securities (1) 4,202.6 83,024 2.93 3,845.3 87,694 3.29

Cash and other 1,136.2 4,188 0.49 700.7 13,831 2.64

Total interest earning 28,963.7 930,297 4.39 23,060.6 909,624 5.38 assets

Non-interest earning assets

Cash and due from banks 173.9 225.9

Allowance for credit (263.2 ) (157.8 ) losses

Bank owned life insurance 178.7 171.4

Other assets 1,206.1 1,098.6

Total assets $ 30,259.2 $ 24,398.7

Interest-bearing liabilities

Interest-bearing deposits:

Interest-bearing $ 3,410.9 $ 7,530 0.29 % $ 2,511.9 $ 16,194 0.86 %transaction accounts

Savings and money market 9,546.3 28,875 0.40 7,854.9 73,283 1.25

Certificates of deposit 2,113.0 23,331 1.47 2,114.6 31,553 1.99

Total interest-bearing 15,070.2 59,736 0.53 12,481.4 121,030 1.30 deposits

Short-term borrowings 150.1 570 0.51 129.4 2,257 2.33

Qualifying debt 500.5 17,833 4.76 376.2 17,898 6.36

Total interest-bearing 15,720.8 78,139 0.66 12,987.0 141,185 1.45 liabilities

Interest cost of funding 0.36 0.82 earning assets

Non-interest-bearing liabilities

Non-interest-bearing 10,813.2 8,118.8 demand deposits

Other liabilities 622.9 495.6

Stockholders' equity 3,102.3 2,797.3

Total liabilities and $ 30,259.2 $ 24,398.7 stockholders' equity

Net interest income and $ 852,158 4.03 % $ 768,439 4.56 %margin (4)

(1)

Yields on loans and securities have been adjusted to a tax equivalent basis. The tax equivalent adjustment was $20.6 million and $18.7 million for the nine months ended September 30, 2020 and 2019, respectively.

(2)

Included in the yield computation are net loan fees of $61.5 million and $37.9 million for the nine months ended September 30, 2020 and 2019, respectively.

(3)

Includes non-accrual loans.

(4)

Net interest margin is computed by dividing net interest income by total average earning assets.

Yields on loans and securities have been adjusted to a tax equivalent(1) basis. The tax equivalent adjustment was $20.6 million and $18.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Included in the yield computation are net loan fees of $61.5 million and(2) $37.9 million for the nine months ended September 30, 2020 and 2019, respectively.

(3) Includes non-accrual loans.

(4) Net interest margin is computed by dividing net interest income by total average earning assets.

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited

Balance Sheet:

Regional Segments

Consolidated

Company

Arizona

Nevada

Southern

California

Northern

California

At September 30, 2020:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

$

6,119.8

$

1.5

$

8.8

$

1.8

$

2.3

Loans, net of deferred loan fees and costs

26,014.0

4,388.1

2,612.2

2,376.7

1,785.8

Less: allowance for credit losses

(310.5

)

(57.0

)

(36.4

)

(31.5

)

(19.3

)

Total loans

25,703.5

4,331.1

2,575.8

2,345.2

1,766.5

Other assets acquired through foreclosure, net

8.6

-

8.5

-

-

Goodwill and other intangible assets, net

299.0

-

23.2

-

153.9

Other assets

1,204.6

47.8

60.1

16.2

20.1

Total assets

$

33,335.5

$

4,380.4

$

2,676.4

$

2,363.2

$

1,942.8

Liabilities:

Deposits

$

28,843.4

$

8,541.5

$

4,733.9

$

3,502.0

$

2,741.1

Borrowings and qualifying debt

628.8

-

-

-

-

Other liabilities

639.3

28.7

18.8

8.6

20.0

Total liabilities

30,111.5

8,570.2

4,752.7

3,510.6

2,761.1

Allocated equity:

3,224.0

576.4

343.7

281.2

361.5

Total liabilities and stockholders' equity

$

33,335.5

$

9,146.6

$

5,096.4

$

3,791.8

$

3,122.6

Excess funds provided (used)

-

4,766.2

2,420.0

1,428.6

1,179.8

No. of offices

49

10

16

9

3

No. of full-time equivalent employees

1,885

114

88

122

119

Income Statement:

Three Months Ended September 30, 2020:

(in thousands)

Net interest income

$

284,738

$

83,492

$

46,625

$

35,656

$

28,353

Provision for (recovery of) credit losses

14,661

9,830

8,548

5,213

1,856

Net interest income after provision for credit losses

270,077

73,662

38,077

30,443

26,497

Non-interest income

20,606

1,771

2,391

1,186

2,381

Non-interest expense

(124,092

)

(17,644

)

(15,800

)

(14,020

)

(12,885

)

Income (loss) before income taxes

166,591

57,789

24,668

17,609

15,993

Income tax expense (benefit)

30,822

14,447

5,180

4,930

4,478

Net income

$

135,769

$

43,342

$

19,488

$

12,679

$

11,515

Nine Months Ended September 30, 2020:

(in thousands)

Net interest income

$

852,158

$

229,701

$

139,328

$

104,348

$

85,345

Provision for (recovery of) credit losses

157,837

46,623

25,015

23,750

12,680

Net interest income after provision for credit losses

694,321

183,078

114,313

80,598

72,665

Non-interest income

46,985

4,943

7,355

3,269

6,450

Non-interest expense

(359,372

)

(58,674

)

(44,414

)

(43,216

)

(38,460

)

Income (loss) before income taxes

381,934

129,347

77,254

40,651

40,655

Income tax expense (benefit)

68,929

32,207

16,164

11,241

11,340

Net income

$

313,005

$

97,140

$

61,090

$

29,410

$

29,315

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited



Balance Regional SegmentsSheet:

Consolidated Southern Northern Arizona Nevada Company California California

At September (dollars in millions)30, 2020:

Assets:

Cash, cashequivalents,and $ 6,119.8 $ 1.5 $ 8.8 $ 1.8 $ 2.3 investmentsecurities

Loans, net ofdeferred loan 26,014.0 4,388.1 2,612.2 2,376.7 1,785.8 fees andcosts

Less:allowance for (310.5 ) (57.0 ) (36.4 ) (31.5 ) (19.3 ) credit losses

Total loans 25,703.5 4,331.1 2,575.8 2,345.2 1,766.5

Other assetsacquiredthrough 8.6 - 8.5 - - foreclosure,net

Goodwill andother 299.0 - 23.2 - 153.9 intangibleassets, net

Other assets 1,204.6 47.8 60.1 16.2 20.1

Total assets $ 33,335.5 $ 4,380.4 $ 2,676.4 $ 2,363.2 $ 1,942.8

Liabilities:

Deposits $ 28,843.4 $ 8,541.5 $ 4,733.9 $ 3,502.0 $ 2,741.1

Borrowingsand 628.8 - - - - qualifyingdebt

Other 639.3 28.7 18.8 8.6 20.0 liabilities

Total 30,111.5 8,570.2 4,752.7 3,510.6 2,761.1 liabilities

Allocated 3,224.0 576.4 343.7 281.2 361.5 equity:

Totalliabilitiesand $ 33,335.5 $ 9,146.6 $ 5,096.4 $ 3,791.8 $ 3,122.6 stockholders'equity

Excess fundsprovided - 4,766.2 2,420.0 1,428.6 1,179.8 (used)



No. of 49 10 16 9 3 offices

No. offull-time 1,885 114 88 122 119 equivalentemployees



Income Statement:



Three MonthsEnded (in thousands)September 30,2020:

Net interest $ 284,738 $ 83,492 $ 46,625 $ 35,656 $ 28,353 income

Provision for(recovery of) 14,661 9,830 8,548 5,213 1,856 credit losses

Net interestincome after 270,077 73,662 38,077 30,443 26,497 provision forcredit losses

Non-interest 20,606 1,771 2,391 1,186 2,381 income

Non-interest (124,092 ) (17,644 ) (15,800 ) (14,020 ) (12,885 ) expense

Income (loss)before income 166,591 57,789 24,668 17,609 15,993 taxes

Income taxexpense 30,822 14,447 5,180 4,930 4,478 (benefit)

Net income $ 135,769 $ 43,342 $ 19,488 $ 12,679 $ 11,515



Nine MonthsEnded (in thousands)September 30,2020:

Net interest $ 852,158 $ 229,701 $ 139,328 $ 104,348 $ 85,345 income

Provision for(recovery of) 157,837 46,623 25,015 23,750 12,680 credit losses

Net interestincome after 694,321 183,078 114,313 80,598 72,665 provision forcredit losses

Non-interest 46,985 4,943 7,355 3,269 6,450 income

Non-interest (359,372 ) (58,674 ) (44,414 ) (43,216 ) (38,460 ) expense

Income (loss)before income 381,934 129,347 77,254 40,651 40,655 taxes

Income taxexpense 68,929 32,207 16,164 11,241 11,340 (benefit)

Net income $ 313,005 $ 97,140 $ 61,090 $ 29,410 $ 29,315



Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited

Balance Sheet:

National Business Lines

HOA

Services

Public &

Nonprofit

Finance

Technology &

Innovation

Hotel Franchise

Finance

Other NBLs

Corporate &

Other

At September 30, 2020:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

$

-

$

-

$

-

$

-

$

26.6

$

6,078.8

Loans, net of deferred loan fees and costs

280.0

1,686.7

2,329.3

2,099.3

8,451.8

4.1

Less: allowance for credit losses

(2.3

)

(17.9

)

(41.5

)

(40.7

)

(63.9

)

-

Total loans

277.7

1,668.8

2,287.8

2,058.6

8,387.9

4.1

Other assets acquired through foreclosure, net

-

-

-

-

0.1

-

Goodwill and other intangible assets, net

-

-

119.3

0.1

2.5

-

Other assets

5.4

11.9

9.2

33.4

110.3

890.2

Total assets

$

283.1

$

1,680.7

$

2,416.3

$

2,092.1

$

8,527.4

$

6,973.1

Liabilities:

Deposits

$

3,697.9

$

-

$

4,646.4

$

-

$

61.4

$

919.2

Borrowings and qualifying debt

-

-

-

-

-

628.8

Other liabilities

(2.7

)

91.8

5.4

0.9

56.8

411.0

Total liabilities

3,695.2

91.8

4,651.8

0.9

118.2

1,959.0

Allocated equity:

104.9

130.3

397.5

167.5

673.2

187.8

Total liabilities and stockholders' equity

$

3,800.1

$

222.1

$

5,049.3

$

168.4

$

791.4

$

2,146.8

Excess funds provided (used)

3,517.0

(1,458.6

)

2,633.0

(1,923.7

)

(7,736.0

)

(4,826.3

)

No. of offices

1

1

10

1

5

(7

)

No. of full-time equivalent employees

73

11

79

16

93

1,170

Income Statement:

Three Months Ended September 30, 2020:

(in thousands)

Net interest income

$

22,184

$

2,800

$

48,013

$

12,536

$

46,582

$

(41,503

)

Provision for (recovery of) credit losses

(138

)

781

(9,048

)

2,200

(2,706

)

(1,875

)

Net interest income after provision for credit losses

22,322

2,019

57,061

10,336

49,288

(39,628

)

Non-interest income

134

-

3,126

-

2,924

6,693

Non-interest expense

(9,896

)

(1,724

)

(11,530

)

(2,596

)

(12,335

)

(25,662

)

Income (loss) before income taxes

12,560

295

48,657

7,740

39,877

(58,597

)

Income tax expense (benefit)

2,889

68

11,191

1,780

9,172

(23,313

)

Net income

$

9,671

$

227

$

37,466

$

5,960

$

30,705

$

(35,284

)

Nine Months Ended September 30, 2020:

(in thousands)

Net interest income

$

67,740

$

6,351

$

137,436

$

39,442

$

128,096

$

(85,629

)

Provision for (recovery of) credit losses

(2,198

)

553

25,471

27,530

(4,737

)

3,150

Net interest income after provision for credit losses

69,938

5,798

111,965

11,912

132,833

(88,779

)

Non-interest income

350

-

9,247

-

4,108

11,263

Non-interest expense

(29,965

)

(5,114

)

(36,188

)

(7,353

)

(35,674

)

(60,314

)

Income (loss) before income taxes

40,323

684

85,024

4,559

101,267

(137,830

)

Income tax expense (benefit)

9,361

380

19,461

893

23,083

(55,201

)

Net income

$

30,962

$

304

$

65,563

$

3,666

$

78,184

$

(82,629

)

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited



Balance National Business Lines Sheet:

Public & Hotel HOA Technology & Franchise Corporate & Nonprofit Other NBLs Services Innovation Finance Other Finance

At September (dollars in millions)30, 2020:

Assets:

Cash, cashequivalents,and $ - $ - $ - $ - $ 26.6 $ 6,078.8 investmentsecurities

Loans, net ofdeferred loan 280.0 1,686.7 2,329.3 2,099.3 8,451.8 4.1 fees andcosts

Less:allowance for (2.3 ) (17.9 ) (41.5 ) (40.7 ) (63.9 ) - credit losses

Total loans 277.7 1,668.8 2,287.8 2,058.6 8,387.9 4.1

Other assetsacquiredthrough - - - - 0.1 - foreclosure,net

Goodwill andother - - 119.3 0.1 2.5 - intangibleassets, net

Other assets 5.4 11.9 9.2 33.4 110.3 890.2

Total assets $ 283.1 $ 1,680.7 $ 2,416.3 $ 2,092.1 $ 8,527.4 $ 6,973.1

Liabilities:

Deposits $ 3,697.9 $ - $ 4,646.4 $ - $ 61.4 $ 919.2

Borrowingsand - - - - - 628.8 qualifyingdebt

Other (2.7 ) 91.8 5.4 0.9 56.8 411.0 liabilities

Total 3,695.2 91.8 4,651.8 0.9 118.2 1,959.0 liabilities

Allocated 104.9 130.3 397.5 167.5 673.2 187.8 equity:

Totalliabilitiesand $ 3,800.1 $ 222.1 $ 5,049.3 $ 168.4 $ 791.4 $ 2,146.8 stockholders'equity

Excess fundsprovided 3,517.0 (1,458.6 ) 2,633.0 (1,923.7 ) (7,736.0 ) (4,826.3 ) (used)



No. of 1 1 10 1 5 (7 ) offices

No. offull-time 73 11 79 16 93 1,170 equivalentemployees



Income Statement:



Three MonthsEnded (in thousands)September 30,2020:

Net interest $ 22,184 $ 2,800 $ 48,013 $ 12,536 $ 46,582 $ (41,503 ) income

Provision for(recovery of) (138 ) 781 (9,048 ) 2,200 (2,706 ) (1,875 ) credit losses

Net interestincome after 22,322 2,019 57,061 10,336 49,288 (39,628 ) provision forcredit losses

Non-interest 134 - 3,126 - 2,924 6,693 income

Non-interest (9,896 ) (1,724 ) (11,530 ) (2,596 ) (12,335 ) (25,662 ) expense

Income (loss)before income 12,560 295 48,657 7,740 39,877 (58,597 ) taxes

Income taxexpense 2,889 68 11,191 1,780 9,172 (23,313 ) (benefit)

Net income $ 9,671 $ 227 $ 37,466 $ 5,960 $ 30,705 $ (35,284 )



Nine MonthsEnded (in thousands)September 30,2020:

Net interest $ 67,740 $ 6,351 $ 137,436 $ 39,442 $ 128,096 $ (85,629 ) income

Provision for(recovery of) (2,198 ) 553 25,471 27,530 (4,737 ) 3,150 credit losses

Net interestincome after 69,938 5,798 111,965 11,912 132,833 (88,779 ) provision forcredit losses

Non-interest 350 - 9,247 - 4,108 11,263 income

Non-interest (29,965 ) (5,114 ) (36,188 ) (7,353 ) (35,674 ) (60,314 ) expense

Income (loss)before income 40,323 684 85,024 4,559 101,267 (137,830 ) taxes

Income taxexpense 9,361 380 19,461 893 23,083 (55,201 ) (benefit)

Net income $ 30,962 $ 304 $ 65,563 $ 3,666 $ 78,184 $ (82,629 )



Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited

Balance Sheet:

Regional Segments

Consolidated

Company

Arizona

Nevada

Southern

California

Northern

California

At December 31, 2019:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

$

4,471.2

$

1.8

$

9.0

$

2.3

$

2.2

Loans, net of deferred loan fees and costs

21,123.3

3,847.9

2,252.5

2,253.9

1,311.2

Less: allowance for credit losses

(167.8

)

(31.6

)

(18.0

)

(18.3

)

(9.7

)

Total loans

20,955.5

3,816.3

2,234.5

2,235.6

1,301.5

Other assets acquired through foreclosure, net

13.9

-

13.0

0.9

-

Goodwill and other intangible assets, net

297.6

-

23.2

-

154.6

Other assets

1,083.7

48.6

59.4

15.0

19.8

Total assets

$

26,821.9

$

3,866.7

$

2,339.1

$

2,253.8

$

1,478.1

Liabilities:

Deposits

$

22,796.5

$

5,384.7

$

4,350.1

$

2,585.3

$

2,373.6

Borrowings and qualifying debt

393.6

-

-

-

-

Other liabilities

615.1

17.8

11.9

1.2

15.9

Total liabilities

23,805.2

5,402.5

4,362.0

2,586.5

2,389.5

Allocated equity:

3,016.7

453.6

301.0

253.3

312.5

Total liabilities and stockholders' equity

$

26,821.9

$

5,856.1

$

4,663.0

$

2,839.8

$

2,702.0

Excess funds provided (used)

-

1,989.4

2,323.9

586.0

1,223.9

No. of offices

47

10

16

9

3

No. of full-time equivalent employees

1,835

108

89

120

112

Income Statements:

Three Months Ended September 30, 2019:

(in thousands)

Net interest income

$

266,422

$

68,828

$

40,565

$

33,630

$

23,504

Provision for (recovery of) credit losses

3,803

103

(62

)

(189

)

218

Net interest income (expense) after provision for credit losses

262,619

68,725

40,627

33,819

23,286

Non-interest income

19,441

1,821

2,677

1,079

1,917

Non-interest expense

(126,152

)

(27,241

)

(15,211

)

(15,185

)

(12,379

)

Income (loss) before income taxes

155,908

43,305

28,093

19,713

12,824

Income tax expense (benefit)

28,533

10,826

5,899

5,520

3,591

Net income

$

127,375

$

32,479

$

22,194

$

14,193

$

9,233

No. of offices

47

10

16

9

3

No. of full-time equivalent employees

1,814

106

89

121

116

Nine Months Ended September 30, 2019:

(in thousands)

Net interest income

$

768,439

$

183,772

$

119,191

$

95,751

$

70,533

Provision for (recovery of) credit losses

15,303

1,705

166

611

(653

)

Net interest income (expense) after provision for credit losses

753,136

182,067

119,025

95,140

71,186

Non-interest income

49,069

5,050

7,926

3,054

6,299

Non-interest expense

(352,279

)

(72,183

)

(45,099

)

(44,890

)

(38,419

)

Income (loss) before income taxes

449,926

114,934

81,852

53,304

39,066

Income tax expense (benefit)

78,819

28,733

17,189

14,925

10,939

Net income

$

371,107

$

86,201

$

64,663

$

38,379

$

28,127

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited



Balance Regional SegmentsSheet:

Consolidated Southern Northern Arizona Nevada Company California California

At December (dollars in millions)31, 2019:

Assets:

Cash, cashequivalents,and $ 4,471.2 $ 1.8 $ 9.0 $ 2.3 $ 2.2 investmentsecurities

Loans, net ofdeferred loan 21,123.3 3,847.9 2,252.5 2,253.9 1,311.2 fees andcosts

Less:allowance for (167.8 ) (31.6 ) (18.0 ) (18.3 ) (9.7 ) credit losses

Total loans 20,955.5 3,816.3 2,234.5 2,235.6 1,301.5

Other assetsacquiredthrough 13.9 - 13.0 0.9 - foreclosure,net

Goodwill andother 297.6 - 23.2 - 154.6 intangibleassets, net

Other assets 1,083.7 48.6 59.4 15.0 19.8

Total assets $ 26,821.9 $ 3,866.7 $ 2,339.1 $ 2,253.8 $ 1,478.1

Liabilities:

Deposits $ 22,796.5 $ 5,384.7 $ 4,350.1 $ 2,585.3 $ 2,373.6

Borrowingsand 393.6 - - - - qualifyingdebt

Other 615.1 17.8 11.9 1.2 15.9 liabilities

Total 23,805.2 5,402.5 4,362.0 2,586.5 2,389.5 liabilities

Allocated 3,016.7 453.6 301.0 253.3 312.5 equity:

Totalliabilitiesand $ 26,821.9 $ 5,856.1 $ 4,663.0 $ 2,839.8 $ 2,702.0 stockholders'equity

Excess fundsprovided - 1,989.4 2,323.9 586.0 1,223.9 (used)



No. of 47 10 16 9 3 offices

No. offull-time 1,835 108 89 120 112 equivalentemployees



Income Statements:



Three MonthsEnded (in thousands)September 30,2019:

Net interest $ 266,422 $ 68,828 $ 40,565 $ 33,630 $ 23,504 income

Provision for(recovery of) 3,803 103 (62 ) (189 ) 218 credit losses

Net interestincome(expense) 262,619 68,725 40,627 33,819 23,286 afterprovision forcredit losses

Non-interest 19,441 1,821 2,677 1,079 1,917 income

Non-interest (126,152 ) (27,241 ) (15,211 ) (15,185 ) (12,379 ) expense

Income (loss)before income 155,908 43,305 28,093 19,713 12,824 taxes

Income taxexpense 28,533 10,826 5,899 5,520 3,591 (benefit)

Net income $ 127,375 $ 32,479 $ 22,194 $ 14,193 $ 9,233



No. of 47 10 16 9 3 offices

No. offull-time 1,814 106 89 121 116 equivalentemployees



Nine MonthsEnded (in thousands)September 30,2019:

Net interest $ 768,439 $ 183,772 $ 119,191 $ 95,751 $ 70,533 income

Provision for(recovery of) 15,303 1,705 166 611 (653 ) credit losses

Net interestincome(expense) 753,136 182,067 119,025 95,140 71,186 afterprovision forcredit losses

Non-interest 49,069 5,050 7,926 3,054 6,299 income

Non-interest (352,279 ) (72,183 ) (45,099 ) (44,890 ) (38,419 ) expense

Income (loss)before income 449,926 114,934 81,852 53,304 39,066 taxes

Income taxexpense 78,819 28,733 17,189 14,925 10,939 (benefit)

Net income $ 371,107 $ 86,201 $ 64,663 $ 38,379 $ 28,127



Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited

Balance Sheet:

National Business Lines

HOA

Services

Public &

Nonprofit

Finance

Technology &

Innovation

Hotel Franchise

Finance

Other NBLs

Corporate &

Other

At December 31, 2019:

(dollars in millions)

Assets:

Cash, cash equivalents, and investment securities

$

-

$

-

$

-

$

-

$

10.1

$

4,445.8

Loans, net of deferred loan fees and costs

237.2

1,635.6

1,552.0

1,930.8

6,098.7

3.5

Less: allowance for credit losses

(2.0

)

(13.7

)

(12.6

)

(12.6

)

(49.3

)

-

Total loans

235.2

1,621.9

1,539.4

1,918.2

6,049.4

3.5

Other assets acquired through foreclosure, net

-

-

-

-

-

-

Goodwill and other intangible assets, net

-

-

119.7

0.1

-

-

Other assets

1.2

18.3

7.3

8.8

64.3

841.0

Total assets

$

236.4

$

1,640.2

$

1,666.4

$

1,927.1

$

6,123.8

$

5,290.3

Liabilities:

Deposits

$

3,210.1

$

0.1

$

3,771.5

$

-

$

36.9

$

1,084.2

Borrowings and qualifying debt

-

-

-

-

-

393.6

Other liabilities

1.8

52.9

0.1

-

2.8

510.7

Total liabilities

3,211.9

53.0

3,771.6

-

39.7

1,988.5

Allocated equity:

84.5

131.6

317.5

158.5

494.3

509.9

Total liabilities and stockholders' equity

$

3,296.4

$

184.6

$

4,089.1

$

158.5

$

534.0

$

2,498.4

Excess funds provided (used)

3,060.0

(1,455.6

)

2,422.7

(1,768.6

)

(5,589.8

)

(2,791.9

)

No. of offices

1

1

9

1

4

(7

)

No. of full-time equivalent employees

75

12

76

16

75

1,152

Income Statement:

Three Months Ended September 30, 2019:

(in thousands)

Net interest income

$

21,974

$

3,394

$

33,932

$

12,845

$

32,935

$

(5,185

)

Provision for (recovery of) credit losses

60

(191

)

895

1,956

1,210

(197

)

Net interest income (expense) after provision for credit losses

21,914

3,585

33,037

10,889

31,725

(4,988

)

Non-interest income

84

-

5,422

-

1,708

4,733

Non-interest expense

(9,769

)

(1,845

)

(12,068

)

(2,197

)

(11,320

)

(18,937

)

Income (loss) before income taxes

12,229

1,740

26,391

8,692

22,113

(19,192

)

Income tax expense (benefit)

2,813

400

6,070

1,999

5,086

(13,671

)

Net income

$

9,416

$

1,340

$

20,321

$

6,693

$

17,027

$

(5,521

)

No. of offices

1

1

9

1

4

(7

)

No. of full-time equivalent employees

76

12

73

15

69

1,137

Nine Months Ended September 30, 2019:

(in thousands)

Net interest income

$

64,520

$

10,278

$

91,871

$

39,279

$

88,212

$

5,032

Provision for (recovery of) credit losses

27

(136

)

2,635

3,587

6,558

803

Net interest income (expense) after provision for credit losses

64,493

10,414

89,236

35,692

81,654

4,229

Non-interest income

268

-

10,946

-

3,915

11,611

Non-interest expense

(27,777

)

(5,683

)

(33,971

)

(6,757

)

(31,729

)

(45,771

)

Income (loss) before income taxes

36,984

4,731

66,211

28,935

53,840

(29,931

)

Income tax expense (benefit)

8,506

1,088

15,229

6,655

12,383

(36,828

)

Net income

$

28,478

$

3,643

$

50,982

$

22,280

$

41,457

$

6,897

Western Alliance Bancorporation and Subsidiaries

Operating Segment Results

Unaudited



Balance National Business Lines Sheet:

Public & Hotel HOA Technology & Franchise Corporate & Nonprofit Other NBLs Services Innovation Finance Other Finance

At December (dollars in millions)31, 2019:

Assets:

Cash, cashequivalents,and $ - $ - $ - $ - $ 10.1 $ 4,445.8 investmentsecurities

Loans, net ofdeferred loan 237.2 1,635.6 1,552.0 1,930.8 6,098.7 3.5 fees andcosts

Less:allowance for (2.0 ) (13.7 ) (12.6 ) (12.6 ) (49.3 ) - credit losses

Total loans 235.2 1,621.9 1,539.4 1,918.2 6,049.4 3.5

Other assetsacquiredthrough - - - - - - foreclosure,net

Goodwill andother - - 119.7 0.1 - - intangibleassets, net

Other assets 1.2 18.3 7.3 8.8 64.3 841.0

Total assets $ 236.4 $ 1,640.2 $ 1,666.4 $ 1,927.1 $ 6,123.8 $ 5,290.3

Liabilities:

Deposits $ 3,210.1 $ 0.1 $ 3,771.5 $ - $ 36.9 $ 1,084.2

Borrowingsand - - - - - 393.6 qualifyingdebt

Other 1.8 52.9 0.1 - 2.8 510.7 liabilities

Total 3,211.9 53.0 3,771.6 - 39.7 1,988.5 liabilities

Allocated 84.5 131.6 317.5 158.5 494.3 509.9 equity:

Totalliabilitiesand $ 3,296.4 $ 184.6 $ 4,089.1 $ 158.5 $ 534.0 $ 2,498.4 stockholders'equity

Excess fundsprovided 3,060.0 (1,455.6 ) 2,422.7 (1,768.6 ) (5,589.8 ) (2,791.9 ) (used)



No. of 1 1 9 1 4 (7 ) offices

No. offull-time 75 12 76 16 75 1,152 equivalentemployees



Income Statement:



Three MonthsEnded (in thousands)September 30,2019:

Net interest $ 21,974 $ 3,394 $ 33,932 $ 12,845 $ 32,935 $ (5,185 ) income

Provision for(recovery of) 60 (191 ) 895 1,956 1,210 (197 ) credit losses

Net interestincome(expense) 21,914 3,585 33,037 10,889 31,725 (4,988 ) afterprovision forcredit losses

Non-interest 84 - 5,422 - 1,708 4,733 income

Non-interest (9,769 ) (1,845 ) (12,068 ) (2,197 ) (11,320 ) (18,937 ) expense

Income (loss)before income 12,229 1,740 26,391 8,692 22,113 (19,192 ) taxes

Income taxexpense 2,813 400 6,070 1,999 5,086 (13,671 ) (benefit)

Net income $ 9,416 $ 1,340 $ 20,321 $ 6,693 $ 17,027 $ (5,521 )



No. of 1 1 9 1 4 (7 ) offices

No. offull-time 76 12 73 15 69 1,137 equivalentemployees



Nine MonthsEnded (in thousands)September 30,2019:

Net interest $ 64,520 $ 10,278 $ 91,871 $ 39,279 $ 88,212 $ 5,032 income

Provision for(recovery of) 27 (136 ) 2,635 3,587 6,558 803 credit losses

Net interestincome(expense) 64,493 10,414 89,236 35,692 81,654 4,229 afterprovision forcredit losses

Non-interest 268 - 10,946 - 3,915 11,611 income

Non-interest (27,777 ) (5,683 ) (33,971 ) (6,757 ) (31,729 ) (45,771 ) expense

Income (loss)before income 36,984 4,731 66,211 28,935 53,840 (29,931 ) taxes

Income taxexpense 8,506 1,088 15,229 6,655 12,383 (36,828 ) (benefit)

Net income $ 28,478 $ 3,643 $ 50,982 $ 22,280 $ 41,457 $ 6,897



Western Alliance Bancorporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

UnauditedPre-Provision Net Revenue by Quarter:

Three Months Ended

9/30/2020

6/30/2020

3/31/2020

12/31/2019

9/30/2019

(in thousands)

Total non-interest income

$

20,606

$

21,270

$

5,109

$

16,027

$

19,441

Net interest income

284,738

298,400

269,020

271,973

266,422

Net revenue

$

305,344

$

319,670

$

274,129

$

288,000

$

285,863

Total non-interest expense

124,092

114,799

120,481

129,735

126,152

Pre-provision net revenue (1)

$

181,252

$

204,871

$

153,648

$

158,265

$

159,711

Less:

Provision for credit losses

14,661

92,000

51,176

3,964

3,803

Income tax expense

30,822

19,599

18,508

26,236

28,533

Net income

$

135,769

$

93,272

$

83,964

$

128,065

$

127,375

Western Alliance Bancorporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Unaudited Pre-ProvisionNet Revenue by Quarter:

Three Months Ended

9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019

(in thousands)

Totalnon-interest $ 20,606 $ 21,270 $ 5,109 $ 16,027 $ 19,441 income

Net interest 284,738 298,400 269,020 271,973 266,422 income

Net revenue $ 305,344 $ 319,670 $ 274,129 $ 288,000 $ 285,863

Totalnon-interest 124,092 114,799 120,481 129,735 126,152 expense

Pre-provisionnet revenue $ 181,252 $ 204,871 $ 153,648 $ 158,265 $ 159,711 (1)

Less:

Provision for 14,661 92,000 51,176 3,964 3,803 credit losses

Income tax 30,822 19,599 18,508 26,236 28,533 expense

Net income $ 135,769 $ 93,272 $ 83,964 $ 128,065 $ 127,375

Efficiency Ratio by Quarter:

Total non-interest expense

$

124,092

$

114,799

$

120,481

$

129,735

$

126,152

Divided by:

Total net interest income

284,738

298,400

269,020

271,973

266,422

Plus:

Tax equivalent interest adjustment

7,188

6,997

6,453

6,359

6,423

Total non-interest income

20,606

21,270

5,109

16,027

19,441

$

312,532

$

326,667

$

280,582

$

294,359

$

292,286

Efficiency ratio - tax equivalent basis (2)

39.7

%

35.1

%

42.9

%

44.1

%

43.2

%

EfficiencyRatio by Quarter:

Totalnon-interest $ 124,092 $ 114,799 $ 120,481 $ 129,735 $ 126,152 expense

Divided by:

Total netinterest 284,738 298,400 269,020 271,973 266,422 income

Plus:

Taxequivalent 7,188 6,997 6,453 6,359 6,423 interest adjustment

Totalnon-interest 20,606 21,270 5,109 16,027 19,441 income

$ 312,532 $ 326,667 $ 280,582 $ 294,359 $ 292,286

Efficiencyratio - tax 39.7 % 35.1 % 42.9 % 44.1 % 43.2 %equivalent basis (2)

Tangible Common Equity:

9/30/2020

6/30/2020

3/31/2020

12/31/2019

9/30/2019

(dollars and shares in thousands)

Total stockholders' equity

$

3,224,046

$

3,102,414

$

2,999,633

$

3,016,748

$

2,923,063

Less: goodwill and intangible assets

298,987

296,860

297,234

297,607

297,994

Total tangible common equity

2,925,059

2,805,554

2,702,399

2,719,141

2,625,069

Plus: deferred tax - attributed to intangible assets

1,689

1,796

1,861

1,921

2,005

Total tangible common equity, net of tax

$

2,926,748

$

2,807,350

$

2,704,260

$

2,721,062

$

2,627,074

Total assets

$

33,335,506

$

31,906,396

$

29,158,227

$

26,821,948

$

26,324,245

Less: goodwill and intangible assets, net

298,987

296,860

297,234

297,607

297,994

Tangible assets

33,036,519

31,609,536

28,860,993

26,524,341

26,026,251

Plus: deferred tax - attributed to intangible assets

1,689

1,796

1,861

1,921

2,005

Total tangible assets, net of tax

$

33,038,208

$

31,611,332

$

28,862,854

$

26,526,262

$

26,028,256

Tangible common equity ratio (3)

8.9

%

8.9

%

9.4

%

10.3

%

10.1

%

Common shares outstanding

100,825

100,849

101,153

102,524

102,639

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

$

29.03

$

27.84

$

26.73

$

26.54

$

25.60

TangibleCommon Equity:

9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019

(dollars and shares in thousands)

Totalstockholders' $ 3,224,046 $ 3,102,414 $ 2,999,633 $ 3,016,748 $ 2,923,063 equity

Less:goodwill and 298,987 296,860 297,234 297,607 297,994 intangible assets

Totaltangible 2,925,059 2,805,554 2,702,399 2,719,141 2,625,069 common equity

Plus:deferred tax- attributed 1,689 1,796 1,861 1,921 2,005 to intangibleassets

Totaltangiblecommon $ 2,926,748 $ 2,807,350 $ 2,704,260 $ 2,721,062 $ 2,627,074 equity, netof tax

Total assets $ 33,335,506 $ 31,906,396 $ 29,158,227 $ 26,821,948 $ 26,324,245

Less:goodwill and 298,987 296,860 297,234 297,607 297,994 intangible assets, net

Tangible 33,036,519 31,609,536 28,860,993 26,524,341 26,026,251 assets

Plus:deferred tax- attributed 1,689 1,796 1,861 1,921 2,005 to intangibleassets

Totaltangible $ 33,038,208 $ 31,611,332 $ 28,862,854 $ 26,526,262 $ 26,028,256 assets, net of tax

Tangiblecommon equity 8.9 % 8.9 % 9.4 % 10.3 % 10.1 %ratio (3)

Common shares 100,825 100,849 101,153 102,524 102,639 outstanding

Tangible bookvalue per $ 29.03 $ 27.84 $ 26.73 $ 26.54 $ 25.60 share, net of tax (3)

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 financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022006154/en/

CONTACT: Western Alliance Bancorporation Dale Gibbons, 602-952-5476