Western Alliance Bancorporation(WAL) - 2024 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements highlight significant asset and deposit growth, with Q2 net income slightly decreasing Consolidated Balance Sheets Total assets grew to $80.6 billion by June 30, 2024, fueled by a $10.9 billion increase in deposits Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2024 | December 31, 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $80,581 | $70,862 | $9,719 | 13.7% | | Cash and cash equivalents | $4,077 | $1,576 | $2,501 | 158.7% | | Net loans held for investment | $52,078 | $49,960 | $2,118 | 4.2% | | Total Investment Securities | $17,268 | $12,712 | $4,556 | 35.8% | | Total Liabilities | $74,247 | $64,784 | $9,463 | 14.6% | | Total deposits | $66,244 | $55,333 | $10,911 | 19.7% | | Other borrowings | $5,587 | $7,230 | ($1,643) | -22.7% | | Total Stockholders' Equity | $6,334 | $6,078 | $256 | 4.2% | Consolidated Income Statements Net income for Q2 2024 decreased to $193.6 million, primarily due to increased non-interest expenses Key Income Statement Data (in millions, except per share data) | Metric | Q2 2024 | Q2 2023 | 6 Months 2024 | 6 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $656.6 | $550.3 | $1,255.5 | $1,160.2 | | Provision for Credit Losses | $37.1 | $21.8 | $52.3 | $41.2 | | Non-interest Income | $115.2 | $119.0 | $245.1 | $61.0 | | Non-interest Expense | $486.8 | $387.4 | $968.6 | $735.3 | | Net Income | $193.6 | $215.7 | $371.0 | $357.9 | | Diluted EPS | $1.75 | $1.96 | $3.34 | $3.24 | - Dividends declared per common share increased to $0.37 in Q2 2024 from $0.36 in Q2 2023 For the six-month period, dividends were $0.74 per share in 2024, up from $0.72 in 2023[8] Consolidated Statements of Comprehensive Income Q2 2024 comprehensive income was $193.0 million, slightly lower than prior year, impacted by comprehensive losses Comprehensive Income (in millions) | Item | Q2 2024 | Q2 2023 | 6 Months 2024 | 6 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $193.6 | $215.7 | $371.0 | $357.9 | | Net Other Comprehensive (Loss) Income | $(0.6) | $(19.0) | $(45.3) | $50.5 | | Comprehensive Income | $193.0 | $196.7 | $325.7 | $408.4 | Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $6.33 billion by June 30, 2024, driven by net income, partially offset by dividends and losses - For the six months ended June 30, 2024, total stockholders' equity increased by $255.8 million, reflecting $371.0 million in net income, offset by $87.9 million in dividends and a $45.3 million net other comprehensive loss[17] Consolidated Statements of Cash Flows Cash and cash equivalents increased by $2.5 billion for the six months ended June 30, 2024, primarily from financing activities Six Months Ended June 30 - Cash Flow Summary (in millions) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,052.3) | $(100.1) | | Net cash (used in) provided by investing activities | $(6,159.3) | $366.6 | | Net cash provided by financing activities | $9,713.0 | $843.3 | | Net increase in cash and cash equivalents | $2,501.4 | $1,109.8 | Notes to Unaudited Consolidated Financial Statements The notes provide detailed disclosures on accounting policies, financial statement line items, portfolio composition, and regulatory capital Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting significant deposit and loan growth, expanded net interest margin, and CRE portfolio monitoring - Total deposits grew by $10.9 billion (19.7%) to $66.2 billion since December 31, 2023[221][231] - Total loans held for investment (HFI) increased by $2.1 billion (4.2%) to $52.4 billion since year-end 2023[221][230] - Net interest margin for Q2 2024 was 3.63%, an increase from 3.42% in Q2 2023[221][256] - The company is proactively monitoring its Commercial Real Estate (CRE) portfolio, which comprised approximately 31% of total loans During Q2 2024, the company recognized gross charge-offs of $17.6 million on one CRE non-owner occupied office property[218] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages interest rate risk using simulation models to project impacts on Net Interest Income and Economic Value of Equity within limits Interest Rate Sensitivity Analysis (as of June 30, 2024) | Scenario (Basis Point Change) | Projected Change in Net Interest Income (Next 12 Months) | Projected Change in Economic Value of Equity | | :--- | :--- | :--- | | +200 | +13.6% | -14.5% | | +100 | +6.8% | -8.0% | | -100 | -6.7% | +8.3% | | -200 | -13.0% | +14.2% | Item 4. Controls and Procedures CEO and CFO concluded disclosure controls are effective, with no material changes to internal control over financial reporting this quarter - The CEO and CFO have concluded that disclosure controls and procedures were effective as of the end of the reporting period[343] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2024[344] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports no material pending legal proceedings that are expected to have a significant impact on its financial position - There are no material pending legal proceedings against the company[345] Item 1A. Risk Factors No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were reported - No material changes to risk factors were reported since the last Annual Report on Form 10-K[347] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company purchased 17,886 shares from employees in Q2 2024 to satisfy tax withholding obligations for vested restricted stock awards - In Q2 2024, the company purchased 17,886 shares from employees to cover tax withholding on vested restricted stock The company does not currently have a common stock repurchase program[348] Item 5. Other Information No directors or officers reported the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[349] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and interactive data files