PHOENIX--(BUSINESS WIRE)--

Western Alliance Bancorporation (NYSE:WAL):

FOURTH QUARTER AND FULL YEAR 2017 FINANCIAL RESULTS

Net income

Earnings per share

Net interest margin

Efficiency ratio

Book value per common share

$89.3 million

$0.85

4.73%

40.47%

$21.13

CEO COMMENTARY

Robert Sarver, Chairman and CEO, commented, “The year 2017 ended as expected for Western Alliance with outstanding results for our shareholders. Our performance is underscored by strong organic loan and deposit growth, plus expanding revenue well over the rate of expense growth. Our core EPS² grew 22% year over year from $2.54 to $3.10. Net income grew 25% from $259.8 million to $325.5 million.

For the past three years, we have posted organic annual growth of $1.5 billion to $3.0 billion in total assets. Total loans grew $1.89 billion to $15.09 billion for the year, up $572 million for the quarter. Total deposits grew $2.42 billion to $16.97 billion for the year, up $68 million for the quarter. Our hands-on approach led to strong metrics for asset quality – nonperforming assets to total assets for the year was 0.36% compared to 0.51% in 2016 and net loan losses for the year were 0.01% of total loans.

With the benefits of tax reform ahead, coupled with the energy and drive that our bankers bring to clients in our markets, we are well positioned to continue our strong operating performance."

LINKED-QUARTER BASIS											FULL YEAR
FINANCIAL HIGHLIGHTS:
▪			Net income and earnings per share of $89.3 million and $0.85 compared to $82.8 million and $0.79, respectively					▪			Net income of $325.5 million and earnings per share of $3.10, compared to $259.8 million and $2.50, respectively
▪			Net operating revenue of $223.3 million constituting growth of $11.6 million compared to an increase in operating non-interest expenses of $6.4 million1					▪			Net operating revenue of $827.7 million, constituting year-over-year growth of 18.4%, or $128.6 million, compared to an increase in operating non-interest expenses of 13.3%, or $42.3 million1
▪			Operating pre-provision net revenue of $127.8 million up $5.2 million from $122.7 million1					▪			Operating pre-provision net revenue of $466.6 million up $86.2 million from $380.4 million1
▪			Income tax expense includes the effect of the Tax Cut and Jobs Act and related actions, which in aggregate resulted in essentially no change in income performance					▪			Income tax expense increased $24.9 million due to an increase in pre-tax income, while the effective tax rate was stable at 28%
FINANCIAL POSITION RESULTS:
▪			Total loans of $15.09 billion, up $572 million					▪			Increase in total loans of $1.89 billion
▪			Total deposits of $16.97 billion, up $68 million					▪			Increase in total deposits of $2.42 billion
▪			Stockholders' equity of $2.23 billion, up $84 million					▪			Increase in stockholders' equity of $338 million
LOANS AND ASSET QUALITY:
▪			Nonperforming assets (nonaccrual loans and repossessed assets) to total assets of 0.36% compared to 0.42%					▪			Nonperforming assets to total assets of 0.36%, compared to 0.51%
▪			Annualized net loan charge-offs to average loans outstanding of 0.04%, compared to 0.01%					▪			Net loan charge-offs to average loans outstanding of 0.01%, compared to 0.02%
KEY PERFORMANCE METRICS:
▪			Net interest margin of 4.73%, compared to 4.65%					▪			Net interest margin of 4.65%, compared to 4.58%
▪			Return on average assets and return on tangible common equity1 of 1.79% and 18.80%, compared to 1.71% and 18.18%, respectively					▪			Return on average assets and return on tangible common equity1 of 1.72% and 18.32%, compared to 1.61% and 17.71%, respectively
▪			Tangible common equity ratio of 9.6%, compared to 9.4%1					▪			Tangible common equity ratio of 9.6%, compared to 9.4%1
▪			Tangible book value per share, net of tax, of $18.31, an increase from $17.531					▪			Tangible book value per share, net of tax, of $18.31 an increase of 20.7% from $15.171
▪			Operating efficiency ratio of 40.7%, compared to 40.0%1					▪			Operating efficiency ratio of 41.5%, compared to 43.4%1
1 See reconciliation of Non-GAAP Financial Measures. 2 Non-GAAP Financial Measure, excludes acquisition / restructure expense, net of tax.

Income Statement

Net interest income was $211.0 million in the fourth quarter 2017, an increase of $9.4 million from $201.6 million in the third quarter 2017, and an increase of $35.8 million or 20.4%, compared to the fourth quarter 2016. Net interest income in the fourth quarter 2017 includes $7.1 million of total accretion income from acquired loans, compared to $7.5 million in the third quarter 2017, and $7.0 million in the fourth quarter 2016. For 2017, net interest income was $784.7 million an increase of $127.5 million or 19.4%, from $657.2 million in 2016.

The Company’s net interest margin in the fourth quarter 2017 was 4.73%, an increase from 4.65% the third quarter 2017, and an increase from 4.57% in the fourth quarter 2016. The increase in net interest margin from the third quarter 2017 primarily relates to an increase in yield on most interest-earning asset categories. The increase in net interest margin from the fourth quarter 2016 primarily relates to the rise in short-term interest rates during the year. For 2017, net interest margin was 4.65%, compared to 4.58% in 2016. The increase in net interest margin from the prior year relates primarily to an increase in loan yield resulting from additional income from the Hotel Franchise Finance acquisition, partially offset by higher costs of deposits and qualifying debt.

Operating non-interest income was $12.3 million for the fourth quarter 2017, compared to $10.1 million for the third quarter 2017, and $10.4 million for the fourth quarter 2016.¹ Operating non-interest income for the fourth quarter 2017 was elevated as a result of warrant income of $1.4 million and net gains on SBA loan sales of $1.2 million. For 2017, operating non-interest income was $43.0 million an increase of $1.2 million or 2.8%, compared to $41.8 million in 2016.¹

Net operating revenue was $223.3 million for the fourth quarter 2017, an increase of $11.6 million, compared to $211.7 million for the third quarter 2017, and an increase of $37.6 million or 20.2%, compared to $185.7 million for the fourth quarter 2016.¹ For 2017, net operating revenue was $827.7 million an increase of $128.6 million, or 18.4%, compared to $699.1 million in 2016.¹

Operating non-interest expense was $95.4 million for the fourth quarter 2017, compared to $89.0 million for the third quarter 2017, and $82.7 million for the fourth quarter 2016.¹ The Company’s operating efficiency ratio¹ on a tax equivalent basis was 40.7% for the fourth quarter 2017, compared to 40.0% for the third quarter 2017, and 42.4% for the fourth quarter 2016. For 2017, operating non-interest expense was $361.0 million, an increase of $42.3 million or 13.3%, compared to $318.7 million in 2016.¹ This increase was primarily driven by an increase in salaries and benefits, including incentive compensation, to accommodate growth and performance.

Income tax expense was $35.0 million for the fourth quarter 2017, compared to $34.9 million for the third quarter 2017, and $26.4 million for the fourth quarter 2016. Income tax expense for the fourth quarter 2017 is comparable to the prior quarter due to remeasurement of the Company's deferred tax assets and liabilities as a result of the Tax Cut and Jobs Act and related actions. This adjustment to the deferred tax asset is management's best estimate based upon the information available as of this earnings release and is subject to change as final tax related calculations are completed in conjunction with the filing of our Form 10-K and the one-year remeasurement period granted by the SEC.

Net income was $89.3 million for the fourth quarter 2017, an increase of $6.5 million from $82.8 million for the third quarter 2017, and an increase of $19.5 million or 28.0%, from $69.8 million for the fourth quarter 2016. Earnings per share was $0.85 for the fourth quarter 2017, compared to $0.79 for the third quarter 2017, and $0.67 for the fourth quarter 2016. For 2017, net income was $325.5 million an increase of $65.7 million or 25.3%, compared to $259.8 million in 2016. Earnings per share for 2017 was $3.10 an increase of 23.9%, compared to $2.50 in 2016.

The Company views its operating pre-provision net revenue ("PPNR") as a key metric for assessing the Company’s earnings power, which it defines as net operating revenue less operating non-interest expense. For the fourth quarter 2017, the Company’s operating PPNR was $127.8 million, up from $122.7 million in the third quarter 2017, and up 24.1% from $103.1 million in the fourth quarter 2016.¹ The non-operating items¹ for the fourth quarter 2017 consisted primarily of net gains on sales of investment securities of $1.4 million. For 2017, operating PPNR was $466.6 million an increase of $86.2 million or 22.7%, from $380.4 million in 2016.¹

The Company had 1,725 full-time equivalent employees and 47 offices at December 31, 2017, compared to 1,673 employees and 47 offices at September 30, 2017, and 1,514 employees and 48 offices at December 31, 2016.

Balance Sheet

Gross loans totaled $15.09 billion at December 31, 2017, an increase of $572 million from $14.52 billion at September 30, 2017, and an increase of $1.89 billion from $13.21 billion at December 31, 2016. The year-over-year increase is due to organic loan growth. At December 31, 2017, the allowance for credit losses to gross loans held for investment was 0.93%, compared to 0.94% at September 30, 2017, and 0.95% at December 31, 2016. At December 31, 2017, the allowance for credit losses to total organic loans was 1.03%, compared to 1.06% at September 30, 2017, and 1.11% at December 31, 2016. The Company defines its organic loans as those loans that have not been acquired in a transaction accounted for as a business combination.

Consistent with accounting principles generally accepted in the United States ("GAAP"), the allowance for credit losses is not carried over in an acquisition because acquired loans are recorded at fair value, which discounts the loans based on expected future cash flows. Credit discounts on acquired loans are included as a reduction to gross loans. These discounts totaled $27.0 million at December 31, 2017, compared to $32.7 million at September 30, 2017, and $47.3 million at December 31, 2016.

Deposits totaled $16.97 billion at December 31, 2017, an increase of $68 million from $16.90 billion at September 30, 2017, and an increase of $2.42 billion from $14.55 billion at December 31, 2016. The increase from both the prior quarter and from December 31, 2016 is the result of organic deposit growth. Non-interest bearing deposits were $7.43 billion at December 31, 2017, compared to $7.61 billion at September 30, 2017, and $5.63 billion at December 31, 2016. Non-interest bearing deposits comprised 43.8% of total deposits at December 31, 2017, compared to 45.0% at September 30, 2017, and 38.7% at December 31, 2016. The proportion of savings and money market balances to total deposits was 37.3%, compared to 37.3% at September 30, 2017, and 42.1% at December 31, 2016. Certificates of deposit as a percentage of total deposits were 9.6% at December 31, 2017, compared to 9.4% at September 30, 2017, and 10.0% at December 31, 2016. The Company’s ratio of loans to deposits was 88.9% at December 31, 2017, compared to 85.9% at September 30, 2017, and 90.8% at December 31, 2016.

Borrowings totaled $390 million at December 31, 2017, an increase from zero at September 30, 2017, and an increase of $310 million from $80 million at December 31, 2016. The increase in borrowings from both the prior quarter and the prior year is due to an increase in FHLB overnight advances.

Qualifying debt totaled $377 million at December 31, 2017, compared to $373 million at September 30, 2017, and $368 million at December 31, 2016.

Stockholders’ equity at December 31, 2017 was $2.23 billion, compared to $2.15 billion at September 30, 2017, and $1.89 billion at December 31, 2016.

At December 31, 2017, tangible common equity, net of tax, was 9.6% of tangible assets¹ and total capital was 13.2% of risk-weighted assets. The Company’s tangible book value per share¹ was $18.31 at December 31, 2017, up 20.7% from December 31, 2016.

Total assets increased 2.0% to $20.33 billion at December 31, 2017, from $19.92 billion at September 30, 2017, and increased 18.2% from $17.20 billion at December 31, 2016. The increase in total assets from the prior year relates primarily to organic loan growth and an increase in investment securities resulting from utilized cash from increased deposits.

Asset Quality

The provision for credit losses was $5.0 million for the fourth quarter 2017, consistent with $5.0 million for the third quarter 2017, and compared to $1.0 million for the fourth quarter 2016. Net loan charge-offs (recoveries) in the fourth quarter 2017 were $1.4 million or 0.04% of average loans (annualized), compared to $0.4 million, or 0.01%, in the third quarter 2017, and $(0.8) million, or (0.03)%, in the fourth quarter 2016.

Nonaccrual loans decreased $11.1 million to $43.9 million during the quarter and increased $3.7 million during the year. Loans past due 90 days and still accruing interest totaled $43 thousand at December 31, 2017, compared to $44 thousand at September 30, 2017, and $1.1 million at December 31, 2016. Loans past due 30-89 days and still accruing interest totaled $10.1 million at quarter end, an increase from $5.2 million at September 30, 2017, and an increase from $6.3 million at December 31, 2016.

Repossessed assets totaled $28.5 million at December 31, 2017, a decrease of $0.5 million from $29.0 million at September 30, 2017, and a decrease of $19.3 million from $47.8 million at December 31, 2016. Adversely graded loans and non-performing assets totaled $355.2 million at December 31, 2017, a decrease of $51.0 million from $406.2 million at September 30, 2017, and a decrease of $12.3 million from $342.9 million at December 31, 2016.

As the Company’s asset quality improved and its capital increased, the ratio of classified assets to Tier I capital plus the allowance for credit losses, a common regulatory measure of asset quality, was 10.3% at December 31, 2017, compared to 10.8% at September 30, 2017, and 11.8% at December 31, 2016.¹

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") segment provides 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 HOA Services NBL corresponds to the Alliance Association Bank division. The HFF NBL includes the hotel franchise loan portfolio purchased from GE Capital on April 20, 2016. The operations of Public and Nonprofit Finance are combined into one reportable segment. The Technology & Innovation NBL includes the operations of Equity Fund Resources, the Life Sciences Group, the Renewable Resource Group, and Technology Finance. The Other NBLs segment consists of the operations of Corporate Finance, Mortgage Warehouse Lending, and Resort Finance.

The Corporate & Other segment consists of corporate-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 $8.38 billion at December 31, 2017, an increase of $428 million during the quarter, and an increase of $835 million during the year. Each of the regional segments had loan growth during the quarter, with Arizona and Nevada contributing the largest increases of $192 million and $159 million, respectively. The growth in loans during the year was primarily driven by an increase of $368 million in Arizona and $180 million in Northern California. Total deposits for the regional segments were $12.94 billion, a decrease of $261 million during the quarter, and an increase of $1.43 billion during the year. Arizona and Southern California had decreases in deposits during the quarter of $357 million and $51 million, respectively, which was partially offset by an increase of $146 million in Northern California. Each of the regional segments generated increased deposits during the year, with Arizona contributing the largest increase of $998 million, followed by Nevada and Northern California with increases of $220 million and $138 million, respectively.

Pre-tax income for the regional segments was $83.5 million for the three months ended December 31, 2017, a decrease of $2.6 million from the three months ended September 30, 2017, and an increase of $7.1 million from the three months ended December 31, 2016. Arizona and Nevada had the largest decreases in pre-tax income of $3.1 million and $2.7 million, respectively, compared to the three months ended September 30, 2017, which were partially offset by an increase of $3.7 million in Northern California. Arizona, Northern California, and Nevada had increases in pre-tax income from the three months ended December 31, 2016 of $3.1 million, $2.9 million, and $2.0 million, respectively, which were partially offset by a decrease of $0.9 million in Southern California. For the year ended December 31, 2017, the regional segments reported total pre-tax income of $327.0 million, an increase of $30.0 million compared to the year ended December 31, 2016. Arizona and Nevada contributed the largest increases of $22.0 million and $8.9 million, respectively, which were partially offset by decreases of $0.5 million and $0.4 million in Northern California and Southern California, respectively.

The NBL segments reported gross loan balances of $6.71 billion at December 31, 2017, an increase of $145 million during the quarter, and an increase of $1.06 billion during the year. The increase in loans for the NBL segments compared to the prior quarter relates primarily to the HFF, Technology & Innovation, and Other NBLs segments, which increased by $55 million, $49 million, and $30 million, respectively. During the year, the increases were driven by the Other NBLs, Public & Nonprofit Finance, and Technology & Innovation, which increased loans by $766 million, $126 million, and $87 million, respectively. Total deposits for the NBL segments were $3.97 billion, an increase of $355 million during the quarter, and an increase of $1.04 billion during the year. The Technology & Innovation and HOA Services segments increased deposits during the quarter by $278 million and $77 million, respectively. The increase of $1.04 billion during the year is the result of growth in the Technology & Innovation and HOA Services of $699 million and $340 million, respectively.

Pre-tax income for the NBL segments was $50.8 million for the three months ended December 31, 2017, an increase of $5.2 million from the three months ended September 30, 2017, and an increase of $10.3 million from the three months ended December 31, 2016. The increase in pre-tax income from the prior quarter relates primarily to the Other NBLs segment, which increased $6.6 million. This increase was offset by decreases in pre-tax income from the HFF and Public & Nonprofit Finance segments of $1.4 million and $0.3 million, respectively. All NBLs had increases in pre-tax income from the prior year, with the Other NBLs and Technology & Innovation segments contributing the largest increases of $3.9 million and $2.2 million, respectively. Pre-tax income for the NBLs for the year ended December 31, 2017 totaled $176.5 million, compared to $140.0 million for the year ended December 31, 2016. All NBL segments had increases in pre-tax income compared to the year ended December 31, 2016, with the largest increases in HFF and HOA Services of $12.3 million, and $8.3 million, respectively.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live webcast to discuss its fourth quarter 2017 financial results at 12:00 p.m. ET on Friday, January 26, 2018. Participants may access the call by dialing 1-888-317-6003 and using passcode 0958016 or via live audio webcast using the website link https://services.choruscall.com/links/wal180126.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 January 26th through 9:00 a.m. ET February 26th by dialing 1-877-344-7529 passcode: 10115798.

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.

Early Adoption of Accounting Standards

During the fourth quarter 2017, the Company elected to early adopt Accounting Standards Update ("ASU") 2017-12, Targeted Improvements to Accounting for Hedging Activities. The amendments in this ASU simplify the application of hedge accounting by changing how companies assess effectiveness of hedging instruments. The guidance also amends the presentation and disclosure requirements for hedging activities. Under the new accounting guidance, a qualitative hedge effectiveness assessment can be performed after the initial quantitative assessment. In addition, the timing of the completion of the initial quantitative hedge effectiveness assessment may be pushed out to the first quarterly reporting date subsequent to entering into the hedge.

Upon adoption of the new accounting guidance, the Company recorded a cumulative basis adjustment of $0.5 million for its fair value hedges as an adjustment to retained earnings as of January 1, 2017 and, the effects of hedging ineffectiveness previously recognized in each of the quarters of 2017 was reversed, which totaled less than $0.1 million for the year.

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, and future economic performance, including our recent domestic select-service hotel franchise finance loan portfolio acquisition. 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, 2016 as filed with the Securities and Exchange Commission; 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 or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities, including expansion through acquisitions; additional regulatory requirements resulting from our continued growth; management’s estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.

Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.

About Western Alliance Bancorporation

With more than $20 billion in assets, Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies. Its primary subsidiary, Western Alliance Bank, is the go-to bank for business and succeeds with local teams of experienced bankers who deliver superior service and a full spectrum of deposit, lending, treasury management, international banking and online banking products and services. Western Alliance Bank operates full-service banking divisions: Alliance Bank of Arizona, Bank of Nevada, Bridge Bank, First Independent Bank and Torrey Pines Bank. The bank also serves business customers through a robust national platform of specialized financial services including Corporate Finance, Equity Fund Resources, Hotel Franchise Finance, Life Sciences Group, Mortgage Warehouse Lending, Public and Nonprofit Finance, Renewable Resource Group, Resort Finance, Technology Finance and Alliance Association Bank. For more information, visit westernalliancebancorporation.com.

Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
Selected Balance Sheet Data:
			As of December 31,
			2017				2016				Change		%
			(in millions)
Total assets			$	20,329.1			$	17,200.8			18.2	%
Total loans, net of deferred fees			15,093.9				13,208.5				14.3
Securities and money market investments			3,820.4				2,767.8				38.0
Total deposits			16,972.5				14,549.8				16.7
Borrowings			390.0				80.0				NM
Qualifying debt			376.9				367.9				2.4
Stockholders' equity			2,229.2				1,891.5				17.8
Tangible common equity, net of tax (1)			1,931.1				1,593.6				21.2
Selected Income Statement Data:
			For the Three Months Ended December 31,												For the Year Ended December 31,
			2017				2016				Change		%		2017				2016				Change		%
			(in thousands, except per share data)												(in thousands, except per share data)
Interest income			$	228,459			$	187,411			21.9	%			$	845,513			$	700,506			20.7	%
Interest expense			17,430				12,142				43.6				60,849				43,293				40.6
Net interest income			211,029				175,269				20.4				784,664				657,213				19.4
Provision for credit losses			5,000				1,000				NM				17,250				8,000				NM
Net interest income after provision for credit losses			206,029				174,269				18.2				767,414				649,213				18.2
Non-interest income			13,688				10,540				29.9				45,344				42,915				5.7
Non-interest expense			95,398				88,645				7.6				360,941				330,949				9.1
Income before income taxes			124,319				96,164				29.3				451,817				361,179				25.1
Income tax expense			34,973				26,364				32.7				126,325				101,381				24.6
Net income			$	89,346			$	69,800			28.0				$	325,492			$	259,798			25.3
Diluted earnings per share			$	0.85			$	0.67			26.9				$	3.10			$	2.50			24.0
(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 December 31,															For the Year Ended December 31,
			2017				2016				Change %							2017						2016							Change %
Diluted earnings per share			$	0.85			$	0.67			26.9				%			$	3.10					$	2.50						24.0	%
Book value per common share			21.13				18.00				17.4
Tangible book value per share, net of tax (1)			18.31				15.17				20.7
Average shares outstanding (in thousands):
Basic			104,342				103,788				0.5							104,179						103,042							1.1
Diluted			105,164				104,765				0.4							104,997						103,843							1.1
Common shares outstanding			105,487				105,071				0.4
Selected Performance Ratios:
Return on average assets (2)			1.79		%		1.63		%		9.8				%			1.72				%		1.61					%		6.8	%
Return on average tangible common equity (1, 2)			18.80				17.59				6.9							18.32						17.71							3.4
Net interest margin (2)			4.73				4.57				3.5							4.65						4.58							1.5
Operating efficiency ratio - tax equivalent basis (1)			40.73				42.42				(4.0				)			41.51						43.42							(4.4	)
Loan to deposit ratio			88.93				90.78				(2.0				)
Asset Quality Ratios:
Net charge-offs (recoveries) to average loans outstanding (2)			0.04		%		(0.03		)%		NM							0.01				%		0.02					%		(50.0	) %
Nonaccrual loans to gross organic loans			0.29				0.31				(6.5				)
Nonaccrual loans and repossessed assets to total assets			0.36				0.51				(29.4				)
Loans past due 90 days and still accruing to gross loans			0.00				0.01				(100.0				)
Allowance for credit losses to gross loans			0.93				0.95				(2.1				)
Allowance for credit losses to nonaccrual loans			318.61				309.65				2.9

Capital Ratios (1):
								December 31, 2017							September 30, 2017							December 31, 2016
Tangible common equity (1)								9.6	%						9.4	%						9.4	%
Common Equity Tier 1 (1), (3)								10.4							10.4							10.0
Tier 1 Leverage ratio (1), (3)								10.3							10.1							9.9
Tier 1 Capital (1), (3)								10.8							10.8							10.5
Total Capital (1), (3)								13.2							13.3							13.2

(1)			See Reconciliation of Non-GAAP Financial Measures.
(2)			Annualized for the three month periods ended December 31, 2017 and 2016.
(3)			Capital ratios for December 31, 2017 are preliminary until the Call Report is filed.
NM			Changes +/- 100% are not meaningful.

Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Income Statements
Unaudited
			Three Months Ended December 31,								For the Year Ended December 31,
			2017				2016				2017				2016
			(dollars in thousands, except per share data)
Interest income:
Loans			$	200,204			$	168,881			$	747,510			$	636,596
Investment securities			26,312				16,725				88,639				58,540
Other			1,943				1,805				9,364				5,370
Total interest income			228,459				187,411				845,513				700,506
Interest expense:
Deposits			12,459				7,729				41,965				29,722
Qualifying debt			4,734				4,252				18,273				12,998
Borrowings			237				161				611				573
Total interest expense			17,430				12,142				60,849				43,293
Net interest income			211,029				175,269				784,664				657,213
Provision for credit losses			5,000				1,000				17,250				8,000
Net interest income after provision for credit losses			206,029				174,269				767,414				649,213
Non-interest income:
Service charges			5,157				4,865				20,346				18,824
Income from equity investments			1,519				1,054				4,496				2,664
Card income			1,796				1,381				6,313				5,226
Income from bank owned life insurance			965				904				3,861				3,762
Foreign currency income			906				747				3,536				3,419
Lending related income and gains (losses) on sale of loans, net			1,466				488				2,212				5,295
Gain (loss) on sales of investment securities, net			1,436				58				2,343				1,059
Other			443				1,043				2,237				2,666
Total non-interest income			13,688				10,540				45,344				42,915
Non-interest expenses:
Salaries and employee benefits			57,704				49,702				214,344				188,810
Legal, professional and directors' fees			6,490				7,600				29,814				24,610
Occupancy			6,532				6,944				27,860				27,303
Data processing			5,062				4,504				19,225				18,660
Insurance			3,687				3,468				14,042				12,898
Deposit costs			2,953				1,862				9,731				4,983
Marketing			1,176				1,164				3,804				3,596
Intangible amortization			408				697				2,074				2,788
Card expense			855				689				3,413				2,936
Loan and repossessed asset expenses			978				477				4,617				2,999
Net (gain) loss on sales and valuations of repossessed and other assets			(34		)		(34		)		(80		)		(125		)
Acquisition / restructure expense			—				6,021				—				12,412
Other			9,587				5,551				32,097				29,079
Total non-interest expense			95,398				88,645				360,941				330,949
Income before income taxes			124,319				96,164				451,817				361,179
Income tax expense			34,973				26,364				126,325				101,381
Net income			$	89,346			$	69,800			$	325,492			$	259,798
Earnings per share:
Diluted shares			105,164				104,765				104,997				103,843
Diluted earnings per share			$	0.85			$	0.67			$	3.10			$	2.50

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Income Statements
Unaudited
			Three Months Ended
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(in thousands, except per share data)
Interest income:
Loans			$	200,204			$	191,096			$	183,657			$	172,553			$	168,881
Investment securities			26,312				23,584				20,629				18,114				16,725
Other			1,943				3,156				2,667				1,598				1,805
Total interest income			228,459				217,836				206,953				192,265				187,411
Interest expense:
Deposits			12,459				11,449				9,645				8,412				7,729
Qualifying debt			4,734				4,708				4,493				4,338				4,252
Borrowings			237				96				72				206				161
Total interest expense			17,430				16,253				14,210				12,956				12,142
Net interest income			211,029				201,583				192,743				179,309				175,269
Provision for credit losses			5,000				5,000				3,000				4,250				1,000
Net interest income after provision for credit losses			206,029				196,583				189,743				175,059				174,269
Non-interest income:
Service charges and fees			5,157				5,248				5,203				4,738				4,865
Income from equity investments			1,519				967				1,318				692				1,054
Card income			1,796				1,509				1,516				1,492				1,381
Income from bank owned life insurance			965				975				973				948				904
Foreign currency income			906				756				832				1,042				747
Lending related income and gains (losses) on sale of loans, net			1,466				97				227				422				488
Gains (losses) on sales of investment securities, net			1,436				319				(47		)		635				58
Other			443				585				579				630				1,043
Total non-interest income			13,688				10,456				10,601				10,599				10,540
Non-interest expenses:
Salaries and employee benefits			57,704				52,747				52,273				51,620				49,702
Legal, professional, and directors' fees			6,490				6,038				8,483				8,803				7,600
Occupancy			6,532				7,507				6,927				6,894				6,944
Data processing			5,062				4,524				4,375				5,264				4,504
Insurance			3,687				3,538				3,589				3,228				3,468
Deposit costs			2,953				2,904				2,133				1,741				1,862
Marketing			1,176				776				1,131				721				1,164
Intangible amortization			408				489				488				689				697
Card expense			855				966				861				731				689
Loan and repossessed asset expenses			978				1,263				1,098				1,278				477
Net (gain) loss on sales and valuations of repossessed and other assets			(34		)		266				231				(543		)		(34		)
Acquisition / restructure expense			—				—				—				—				6,021
Other			9,587				8,278				6,831				7,401				5,551
Total non-interest expense			95,398				89,296				88,420				87,827				88,645
Income before income taxes			124,319				117,743				111,924				97,831				96,164
Income tax expense			34,973				34,899				31,964				24,489				26,364
Net income			$	89,346			$	82,844			$	79,960			$	73,342			$	69,800
Earnings per share:
Diluted shares			105,164				104,942				105,045				104,836				104,765
Diluted earnings per share			$	0.85			$	0.79			$	0.76			$	0.70			$	0.67

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Balance Sheets
Unaudited
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(in millions, except per share data)
Assets:
Cash and due from banks			$	416.8			$	650.4			$	606.7			$	647.0			$	284.5
Securities and money market investments			3,820.4				3,773.6				3,283.0				2,869.1				2,767.8
Loans held for sale			—				16.3				16.7				17.8				18.9
Loans held for investment:
Commercial			6,841.4				6,735.9				6,318.5				6,039.1				5,855.8
Commercial real estate - non-owner occupied			3,904.0				3,628.4				3,649.1				3,607.8				3,544.0
Commercial real estate - owner occupied			2,241.6				2,047.5				2,021.2				2,043.4				2,013.3
Construction and land development			1,632.2				1,666.4				1,601.7				1,601.7				1,478.1
Residential real estate			425.9				376.7				334.8				309.9				259.4
Consumer			48.8				50.7				47.9				43.0				39.0
Gross loans and deferred fees, net			15,093.9				14,505.6				13,973.2				13,644.9				13,189.6
Allowance for credit losses			(140.0		)		(136.4		)		(131.8		)		(127.6		)		(124.7		)
Loans, net			14,953.9				14,369.2				13,841.4				13,517.3				13,064.9
Premises and equipment, net			118.7				120.1				120.5				120.0				119.8
Other assets acquired through foreclosure, net			28.5				29.0				31.0				45.2				47.8
Bank owned life insurance			167.8				166.8				166.4				165.5				164.5
Goodwill and other intangibles, net			300.7				301.2				301.6				302.1				302.9
Other assets			522.3				495.6				477.4				438.5				429.7
Total assets			$	20,329.1			$	19,922.2			$	18,844.7			$	18,122.5			$	17,200.8
Liabilities and Stockholders' Equity:
Liabilities:
Deposits
Non-interest bearing demand deposits			$	7,434.0			$	7,608.7			$	6,859.4			$	6,114.1			$	5,632.9
Interest bearing:
Demand			1,586.2				1,406.4				1,480.8				1,449.3				1,346.7
Savings and money market			6,330.9				6,300.2				6,104.0				6,253.8				6,120.9
Time certificates			1,621.4				1,589.5				1,586.9				1,538.8				1,449.3
Total deposits			16,972.5				16,904.8				16,031.1				15,356.0				14,549.8
Customer repurchase agreements			26.0				26.1				32.7				35.7				41.7
Total customer funds			16,998.5				16,930.9				16,063.8				15,391.7				14,591.5
Borrowings			390.0				—				—				—				80.0
Qualifying debt			376.9				372.9				375.4				366.9				367.9
Accrued interest payable and other liabilities			334.5				472.8				346.8				394.9				269.9
Total liabilities			18,099.9				17,776.6				16,786.0				16,153.5				15,309.3
Stockholders' Equity:
Common stock and additional paid-in capital			1,384.4				1,378.8				1,376.4				1,370.3				1,373.8
Retained earnings			847.9				758.6				675.8				595.8				522.4
Accumulated other comprehensive (loss) income			(3.1		)		8.2				6.5				2.9				(4.7		)
Total stockholders' equity			2,229.2				2,145.6				2,058.7				1,969.0				1,891.5
Total liabilities and stockholders' equity			$	20,329.1			$	19,922.2			$	18,844.7			$	18,122.5			$	17,200.8

Western Alliance Bancorporation and Subsidiaries
Changes in the Allowance For Credit Losses
Unaudited
			Three Months Ended
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(in thousands)
Balance, beginning of period			$	136,421			$	131,811			$	127,649			$	124,704			$	122,884
Provision for credit losses			5,000				5,000				3,000				4,250				1,000
Recoveries of loans previously charged-off:
Commercial and industrial			406				619				1,759				328				1,144
Commercial real estate - non-owner occupied			58				1,168				360				355				691
Commercial real estate - owner occupied			119				613				46				178				45
Construction and land development			218				226				508				277				30
Residential real estate			120				108				1,299				251				287
Consumer			3				33				—				49				11
Total recoveries			924				2,767				3,972				1,438				2,208
Loans charged-off:
Commercial and industrial			2,019				2,921				651				2,595				1,267
Commercial real estate - non-owner occupied			275				175				1,808				—				1
Commercial real estate - owner occupied			—				—				11				—				1
Construction and land development			—				—				—				—				18
Residential real estate			—				—				332				115				60
Consumer			1				61				8				33				41
Total loans charged-off			2,295				3,157				2,810				2,743				1,388
Net loan charge-offs (recoveries)			1,371				390				(1,162		)		1,305				(820		)
Balance, end of period			$	140,050			$	136,421			$	131,811			$	127,649			$	124,704
Net charge-offs (recoveries) to average loans- annualized			0.04		%		0.01		%		(0.03		)%		0.04		%		(0.03		)%
Allowance for credit losses to gross loans			0.93		%		0.94		%		0.94		%		0.94		%		0.95		%
Allowance for credit losses to gross organic loans			1.03				1.06				1.08				1.08				1.11
Allowance for credit losses to nonaccrual loans			318.84				248.07				438.33				370.45				309.65
Nonaccrual loans			$	43,925			$	54,994			$	30,071			$	34,458			$	40,272
Nonaccrual loans to gross loans			0.29		%		0.38		%		0.22		%		0.25		%		0.31		%
Repossessed assets			$	28,540			$	28,992			$	30,988			$	45,200			$	47,815
Nonaccrual loans and repossessed assets to total assets			0.36		%		0.42		%		0.32		%		0.44		%		0.51		%
Loans past due 90 days, still accruing			$	43			$	44			$	4,021			$	3,659			$	1,067
Loans past due 90 days and still accruing to gross loans			0.00		%		0.00		%		0.03		%		0.03		%		0.01		%
Loans past due 30 to 89 days, still accruing			$	10,142			$	5,179			$	4,071			$	10,764			$	6,294
Loans past due 30 to 89 days, still accruing to gross loans			0.07		%		0.04		%		0.03		%		0.08		%		0.05		%
Special mention loans			$	155,032			$	199,965			$	141,036			$	175,080			$	148,144
Special mention loans to gross loans			1.03		%		1.38		%		1.01		%		1.28		%		1.12		%
Classified loans on accrual			$	127,681			$	122,264			$	165,715			$	133,483			$	106,644
Classified loans on accrual to gross loans			0.85		%		0.84		%		1.19		%		0.98		%		0.81		%
Classified assets			$	222,004			$	221,803			$	249,491			$	236,786			$	211,782
Classified assets to total assets			1.09		%		1.11		%		1.32		%		1.31		%		1.23		%

Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
				Three Months Ended
				December 31, 2017													September 30, 2017
			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			$	6,597.6				$	86,336				5.70	%		$	6,345.0				$	80,831				5.59	%
CRE - non-owner occupied				3,734.8					55,757				5.97				3,595.3					54,250				6.04
CRE - owner occupied				2,084.0					26,081				5.01				2,032.7					25,238				4.97
Construction and land development				1,661.6					26,463				6.37				1,633.4					25,897				6.34
Residential real estate				409.9					4,941				4.82				351.5					4,151				4.72
Consumer				48.6					626				5.15				52.2					729				5.59
Total loans (1), (2), (3)				14,536.5					200,204				5.72				14,010.1					191,096				5.68
Securities:
Securities - taxable				2,975.0					19,350				2.60				2,778.4					17,399				2.50
Securities - tax-exempt				791.5					6,962				5.21				657.1					6,185				5.61
Total securities (1)				3,766.5					26,312				3.15				3,435.5					23,584				3.10
Cash and other				489.0					1,943				1.59				845.8					3,156				1.49
Total interest earning assets				18,792.0					228,459				5.10				18,291.4					217,836				5.00
Non-interest earning assets
Cash and due from banks				135.0													132.3
Allowance for credit losses				(138.4		)											(133.6		)
Bank owned life insurance				167.1													166.4
Other assets				956.3													930.7
Total assets			$		19,912.0											$		19,387.2
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts			$		1,464.5			$		1,116			0.30	%		$		1,476.5			$		1,066			0.29	%
Savings and money market				6,321.4					7,810				0.49				6,282.4					7,135				0.45
Time certificates of deposit				1,595.6					3,533				0.89				1,585.7					3,248				0.82
Total interest-bearing deposits				9,381.5					12,459				0.53				9,344.6					11,449				0.49
Short-term borrowings				78.1					237				1.21				31.7					96				1.21
Qualifying debt				372.8					4,734				5.08				375.3					4,708				5.02
Total interest-bearing liabilities				9,832.4					17,430				0.71				9,751.6					16,253				0.67
Non-interest-bearing liabilities
Non-interest-bearing demand deposits				7,502.2													7,174.5
Other liabilities				375.2													336.9
Stockholders’ equity				2,202.2													2,124.2
Total liabilities and stockholders' equity			$		19,912.0											$		19,387.2
Net interest income and margin (4)								$		211,029			4.73	%							$		201,583			4.65	%

(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $11.0 million and $10.8 million for the three months ended December 31, 2017 and September 30, 2017, respectively.

(2) Included in the yield computation are net loan fees of $11.0 million and accretion on acquired loans of $7.1 million for the three months ended December 31, 2017, compared to $9.4 million and $7.5 million for the three months ended September 30, 2017, 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
Analysis of Average Balances, Yields and Rates
Unaudited
				Three Months Ended December 31,
				2017													2016
			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			$	6,597.6				$	86,336				5.70	%		$	5,676.6				$	66,931				5.18	%
CRE - non-owner occupied				3,734.8					55,757				5.97				3,581.1					51,565				5.76
CRE - owner occupied				2,084.0					26,081				5.01				1,993.3					24,897				5.00
Construction and land development				1,661.6					26,463				6.37				1,431.9					22,094				6.17
Residential real estate				409.9					4,941				4.82				264.3					2,926				4.43
Consumer				48.6					626				5.15				38.7					468				4.84
Total loans (1), (2), (3)				14,536.5					200,204				5.72				12,985.9					168,881				5.41
Securities:
Securities - taxable				2,975.0					19,350				2.60				2,142.6					11,482				2.14
Securities - tax-exempt				791.5					6,962				5.21				591.2					5,243				5.25
Total securities (1)				3,766.5					26,312				3.15				2,733.8					16,725				2.81
Cash and other				489.0					1,943				1.59				430.0					1,805				1.68
Total interest earning assets				18,792.0					228,459				5.10				16,149.7					187,411				4.87
Non-interest earning assets
Cash and due from banks				135.0													146.0
Allowance for credit losses				(138.4		)											(122.7		)
Bank owned life insurance				167.1													163.9
Other assets				956.3													844.0
Total assets			$		19,912.0											$		17,180.9
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts			$		1,464.5			$		1,116			0.30	%		$		1,295.6			$		660			0.20	%
Savings and money market				6,321.4					7,810				0.49				6,004.4					5,043				0.34
Time certificates of deposit				1,595.6					3,533				0.89				1,507.0					2,026				0.54
Total interest-bearing deposits				9,381.5					12,459				0.53				8,807.0					7,729				0.35
Short-term borrowings				78.1					237				1.21				73.5					161				0.88
Qualifying debt				372.8					4,734				5.08				365.4					4,252				4.65
Total interest-bearing liabilities				9,832.4					17,430				0.71				9,245.9					12,142				0.53
Non-interest-bearing liabilities
Non-interest-bearing demand deposits				7,502.2													5,752.0
Other liabilities				375.2													292.5
Stockholders’ equity				2,202.2													1,890.5
Total liabilities and stockholders' equity			$		19,912.0											$		17,180.9
Net interest income and margin (4)								$		211,029			4.73	%							$		175,269			4.57	%

(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $11.0 million and $9.2 million for the three months ended December 31, 2017 and 2016, respectively.

(2) Included in the yield computation are net loan fees of $11.0 million and accretion on acquired loans of $7.1 million for the three months ended December 31, 2017, compared to $8.3 million and $7.0 million for the three months ended December 31, 2016, 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
Analysis of Average Balances, Yields and Rates
Unaudited
			Year ended December 31,
			2017											2016
			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			$	6,199.7			$	311,869			5.51	%		$	5,444.4			$	253,262			5.14	%
CRE - non-owner occupied			3,618.4				215,929				5.97			3,194.0				181,678				5.69
CRE - owner occupied			2,033.8				101,976				5.01			2,016.6				103,418				5.13
Construction and land development			1,603.3				99,427				6.20			1,307.9				83,206				6.36
Residential real estate			339.3				16,066				4.74			289.2				13,374				4.62
Consumer			46.0				2,243				4.87			35.8				1,658				4.63
Total loans (1), (2), (3)			13,840.5				747,510				5.62			12,287.9				636,596				5.40
Securities:
Securities - taxable			2,579.3				64,035				2.48			1,789.8				39,772				2.22
Securities - tax-exempt			670.7				24,604				5.45			507.1				18,768				5.34
Total securities (1)			3,250.0				88,639				3.10			2,296.9				58,540				2.91
Cash and other			680.5				9,364				1.38			532.5				5,370				1.01
Total interest earning assets			17,771.0				845,513				4.99			15,117.3				700,506				4.86
Non-interest earning assets
Cash and due from banks			137.5											141.8
Allowance for credit losses			(132.0		)									(122.0		)
Bank owned life insurance			166.1											163.6
Other assets			927.0											833.6
Total assets			$	18,869.6										$	16,134.3
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts			$	1,467.2			$	3,974			0.27	%		$	1,217.3			$	2,231			0.18	%
Savings and money market			6,208.1				26,087				0.42			5,827.5				19,368				0.33
Time certificates of deposit			1,560.9				11,904				0.76			1,615.5				8,123				0.50
Total interest-bearing deposits			9,236.2				41,965				0.45			8,660.3				29,722				0.34
Short-term borrowings			63.6				611				0.96			80.7				573				0.71
Qualifying debt			371.3				18,273				4.92			290.8				12,998				4.47
Total interest-bearing liabilities			9,671.1				60,849				0.63			9,031.8				43,293				0.48
Non-interest-bearing liabilities
Non-interest-bearing demand deposits			6,788.8											5,062.3
Other liabilities			331.0											269.3
Stockholders’ equity			2,078.7											1,770.9
Total liabilities and stockholders' equity			$	18,869.6										$	16,134.3
Net interest income and margin (4)							$	784,664			4.65	%						$	657,213			4.58	%

(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $42.0 million and $34.9 million for the year ended December 31, 2017 and 2016, respectively.

(2) Included in the yield computation are net loan fees of $37.0 million and accretion on acquired loans of $28.2 million for the year ended December 31, 2017, compared to $28.5 million and $29.2 million for the year ended December 31, 2016, 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 December 31, 2017			(dollars in millions)
Assets:
Cash, cash equivalents, and investment securities			$	4,237.2			$	2.2			$	8.2			$	2.1			$	1.7
Loans, net of deferred loan fees and costs			15,093.9				3,323.7				1,844.8				1,934.7				1,275.5
Less: allowance for credit losses			(140.0		)		(31.5		)		(18.1		)		(19.5		)		(13.2		)
Total loans			14,953.9				3,292.2				1,826.7				1,915.2				1,262.3
Other assets acquired through foreclosure, net			28.5				2.3				13.3				—				0.2
Goodwill and other intangible assets, net			300.7				—				23.2				—				156.5
Other assets			808.8				46.3				58.8				14.3				15.1
Total assets			$	20,329.1			$	3,343.0			$	1,930.2			$	1,931.6			$	1,435.8
Liabilities:
Deposits			$	16,972.5			$	4,841.2			$	3,951.5			$	2,461.1			$	1,681.7
Borrowings and qualifying debt			766.9				—				—				—				—
Other liabilities			360.5				11.6				20.9				3.2				11.9
Total liabilities			18,099.9				4,852.8				3,972.4				2,464.3				1,693.6
Allocated equity:			2,229.2				396.6				263.7				221.7				303.4
Total liabilities and stockholders' equity			$	20,329.1			$	5,249.4			$	4,236.1			$	2,686.0			$	1,997.0
Excess funds provided (used)			—				1,906.4				2,305.9				754.4				561.2
No. of offices			47				10				16				9				3
No. of full-time equivalent employees			1,725				175				223				178				166
Income Statement:
Three Months Ended December 31, 2017:			(in thousands)
Net interest income (expense)			$	211,029			$	52,765			$	36,927			$	28,079			$	21,749
Provision for (recovery) credit losses			5,000				1,044				654				120				337
Net interest income (expense) after provision for credit losses			206,029				51,721				36,273				27,959				21,412
Non-interest income			13,688				1,214				2,335				836				3,725
Non-interest expense			(95,398		)		(20,731		)		(15,333		)		(13,745		)		(12,190		)
Income (loss) before income taxes			124,319				32,204				23,275				15,050				12,947
Income tax expense (benefit)			34,973				12,486				8,067				6,335				5,355
Net income			$	89,346			$	19,718			$	15,208			$	8,715			$	7,592
Year Ended December 31, 2017:			(in thousands)
Net interest income (expense)			$	784,664			$	198,622			$	145,001			$	109,177			$	85,360
Provision for (recovery of) credit losses			17,250				1,153				(4,724		)		100				4,575
Net interest income (expense) after provision for credit losses			767,414				197,469				149,725				109,077				80,785
Non-interest income			45,344				4,757				9,135				3,396				10,000
Non-interest expense			(360,941		)		(76,117		)		(61,066		)		(51,808		)		(48,387		)
Income (loss) before income taxes			451,817				126,109				97,794				60,665				42,398
Income tax expense (benefit)			126,325				49,317				34,133				25,529				17,591
Net income (loss)			$	325,492			$	76,792			$	63,661			$	35,136			$	24,807

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, 2017			(dollars in millions)
Assets:
Cash, cash equivalents, and investment securities			$	—			$	—			$	—			$	—			$	—			$	4,223.0
Loans, net of deferred loan fees and costs			162.1				1,580.4				1,097.9				1,327.7				2,543.0				4.1
Less: allowance for credit losses			(1.6		)		(15.6		)		(11.4		)		(4.0		)		(25.0		)		(0.1		)
Total loans			160.5				1,564.8				1,086.5				1,323.7				2,518.0				4.0
Other assets acquired through foreclosure, net			—				—				—				—				—				12.7
Goodwill and other intangible assets, net			—				—				120.9				0.1				—				—
Other assets			0.9				17.9				6.0				5.9				15.5				628.1
Total assets			$	161.4			$	1,582.7			$	1,213.4			$	1,329.7			$	2,533.5			$	4,867.8
Liabilities:
Deposits			$	2,230.4			$	—			$	1,737.6			$	—			$	—			$	69.0
Borrowings and qualifying debt			—				—				—				—				—				766.9
Other liabilities			1.2				42.4				0.8				0.4				5.5				262.6
Total liabilities			2,231.6				42.4				1,738.4				0.4				5.5				1,098.5
Allocated equity:			59.4				126.5				244.1				108.3				206.0				299.5
Total liabilities and stockholders' equity			$	2,291.0			$	168.9			$	1,982.5			$	108.7			$	211.5			$	1,398.0
Excess funds provided (used)			2,129.6				(1,413.8		)		769.1				(1,221.0		)		(2,322.0		)		(3,469.8		)
No. of offices			1				1				9				1				4				(7		)
No. of full-time equivalent employees			66				10				62				12				38				795
Income Statement:
Three Months Ended December 31, 2017:			(in thousands)
Net interest income (expense)			$	13,827			$	7,243			$	22,862			$	14,624			$	19,528			$	(6,575	)
Provision for (recovery) credit losses			9				(202		)		2,005				1,569				(536		)		—
Net interest income (expense) after provision for credit losses			13,818				7,445				20,857				13,055				20,064				(6,575		)
Non-interest income			140				—				2,688				52				141				2,557
Non-interest expense			(6,873		)		(2,415		)		(9,996		)		(2,217		)		(5,978		)		(5,920		)
Income (loss) before income taxes			7,085				5,030				13,549				10,890				14,227				(9,938		)
Income tax expense (benefit)			2,571				1,893				5,081				4,084				5,310				(16,209		)
Net income			$	4,514			$	3,137			$	8,468			$	6,806			$	8,917			$	6,271
Year Ended December 31, 2017:			(in thousands)
Net interest income (expense)			$	54,102			$	28,485			$	82,473			$	56,961			$	65,908			$	(41,425	)
Provision for (recovery of) credit losses			341				593				2,821				4,493				9,729				(1,831		)
Net interest income (expense) after provision for credit losses			53,761				27,892				79,652				52,468				56,179				(39,594		)
Non-interest income			558				—				8,422				52				1,772				7,252
Non-interest expense			(28,289		)		(8,522		)		(36,726		)		(10,166		)		(20,551		)		(19,309		)
Income (loss) before income taxes			26,030				19,370				51,348				42,354				37,400				(51,651		)
Income tax expense (benefit)			9,676				6,317				19,255				15,883				14,000				(65,376		)
Net income (loss)			$	16,354			$	13,053			$	32,093			$	26,471			$	23,400			$	13,725

Western Alliance Bancorporation and Subsidiaries
Operating Segment Results
Unaudited
Balance Sheet:							Regional Segments
			Consolidated Company				Arizona				Nevada				Southern California				Northern California
At December 31, 2016			(dollars in millions)
Assets:
Cash, cash equivalents, and investment securities			$	3,052.3			$	1.9			$	10.1			$	2.1			$	1.9
Loans, net of deferred loan fees and costs			13,208.5				2,955.9				1,725.5				1,766.8				1,095.4
Less: allowance for credit losses			(124.7		)		(30.1		)		(18.5		)		(19.4		)		(8.8		)
Total loans			13,083.8				2,925.8				1,707.0				1,747.4				1,086.6
Other assets acquired through foreclosure, net			47.8				6.2				18.0				—				0.3
Goodwill and other intangible assets, net			302.9				—				23.7				—				157.5
Other assets			714.0				42.9				58.8				14.5				14.3
Total assets			$	17,200.8			$	2,976.8			$	1,817.6			$	1,764.0			$	1,260.6
Liabilities:
Deposits			$	14,549.8			$	3,843.4			$	3,731.5			$	2,382.6			$	1,543.6
Borrowings and qualifying debt			447.9				—				—				—				—
Other liabilities			311.6				12.8				28.3				12.9				12.4
Total liabilities			15,309.3				3,856.2				3,759.8				2,395.5				1,556.0
Allocated equity:			1,891.5				346.6				250.7				201.6				283.7
Total liabilities and stockholders' equity			$	17,200.8			$	4,202.8			$	4,010.5			$	2,597.1			$	1,839.7
Excess funds provided (used)			—				1,226.0				2,192.9				833.1				579.1
No. of offices			48				10				18				9				3
No. of full-time equivalent employees			1,514				169				228				57				275
Income Statements:
Three Months Ended December 31, 2016:			(in thousands)
Net interest income (expense)			$	175,269			$	45,322			$	35,491			$	26,823			$	20,890
Provision for (recovery of) credit losses			1,000				(963		)		189				(724		)		475
Net interest income (expense) after provision for credit losses			174,269				46,285				35,302				27,547				20,415
Non-interest income			10,540				1,139				2,203				643				2,564
Non-interest expense			(88,645		)		(18,316		)		(16,199		)		(12,242		)		(12,919		)
Income (loss) before income taxes			96,164				29,108				21,306				15,948				10,060
Income tax expense (benefit)			26,364				11,419				7,457				6,707				4,230
Net income (loss)			$	69,800			$	17,689			$	13,849			$	9,241			$	5,830
Year Ended December 31, 2016:			(in thousands)
Net interest income (expense)			$	657,213			$	170,513			$	137,507			$	103,542			$	88,162
Provision for (recovery of) credit losses			8,000				9,912				(3,337		)		(580		)		2,587
Net interest income (expense) after provision for credit losses			649,213				160,601				140,844				104,122				85,575
Non-interest income			42,915				6,887				8,622				2,550				10,422
Non-interest expense			(330,949		)		(63,406		)		(60,570		)		(45,643		)		(53,073		)
Income (loss) before income taxes			361,179				104,082				88,896				61,029				42,924
Income tax expense (benefit)			101,381				40,832				31,113				25,663				18,049
Net income (loss)			$	259,798			$	63,250			$	57,783			$	35,366			$	24,875

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, 2016			(dollars in millions)
Assets:
Cash, cash equivalents, and investment securities			$	—			$	—			$	—			$	—			$	—			$	3,036.3
Loans, net of deferred loan fees and costs			116.8				1,454.3				1,011.4				1,292.1				1,776.9				13.4
Less: allowance for credit losses			(1.3		)		(15.6		)		(10.6		)		(0.8		)		(19.0		)		(0.6		)
Total loans			115.5				1,438.7				1,000.8				1,291.3				1,757.9				12.8
Other assets acquired through foreclosure, net			—				—				—				—				—				23.3
Goodwill and other intangible assets, net			—				—				121.5				0.2				—				—
Other assets			0.3				15.6				7.2				5.3				11.1				544.0
Total assets			$	115.8			$	1,454.3			$	1,129.5			$	1,296.8			$	1,769.0			$	3,616.4
Liabilities:
Deposits			$	1,890.3			$	—			$	1,038.2			$	—			$	—			$	120.2
Borrowings and qualifying debt			—				—				—				—				—				447.9
Other liabilities			0.7				50.5				2.0				1.4				17.5				173.1
Total liabilities			1,891.0				50.5				1,040.2				1.4				17.5				741.2
Allocated equity:			65.6				117.1				224.1				107.1				145.5				149.5
Total liabilities and stockholders' equity			$	1,956.6			$	167.6			$	1,264.3			$	108.5			$	163.0			$	890.7
Excess funds provided (used)			1,840.8				(1,286.7		)		134.8				1,188.3				(1,606.0		)		(2,725.7		)
No. of offices			1				1				8				1				4				(7		)
No. of full-time equivalent employees			55				7				59				21				32				611
Income Statement:
Three Months Ended December 31, 2016:			(in thousands)
Net interest income (expense)			$	11,686			$	5,641			$	18,060			$	13,145			$	14,673			$	(16,462	)
Provision for (recovery of) credit losses			96				326				710				—				891				—
Net interest income (expense) after provision for credit losses			11,590				5,315				17,350				13,145				13,782				(16,462		)
Non-interest income			119				37				2,105				—				717				1,013
Non-interest expense			(6,596		)		(2,010		)		(8,094		)		(2,780		)		(4,197		)		(5,292		)
Income (loss) before income taxes			5,113				3,342				11,361				10,365				10,302				(20,741		)
Income tax expense (benefit)			1,918				1,253				4,261				3,887				3,864				(18,632		)
Net income (loss)			$	3,195			$	2,089			$	7,100			$	6,478			$	6,438			$	(2,109	)
Year Ended December 31, 2016:			(in thousands)
Net interest income (expense)			$	41,539			$	20,900			$	69,143			$	38,583			$	49,893			$	(62,569	)
Provision for (recovery of) credit losses			256				(183		)		(1,626		)		—				4,200				(3,229		)
Net interest income (expense) after provision for credit losses			41,283				21,083				70,769				38,583				45,693				(59,340		)
Non-interest income			460				59				6,728				—				2,315				4,872
Non-interest expense			(24,019		)		(7,936		)		(31,271		)		(8,544		)		(15,204		)		(21,283		)
Income (loss) before income taxes			17,724				13,206				46,226				30,039				32,804				(75,751		)
Income tax expense (benefit)			6,647				4,952				17,335				11,265				12,302				(66,777		)
Net income (loss)			$	11,077			$	8,254			$	28,891			$	18,774			$	20,502			$	(8,974	)

Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Unaudited
Operating Pre-Provision Net Revenue by Quarter:
			Three Months Ended
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(in thousands)
Total non-interest income			$	13,688			$	10,456			$	10,601			$	10,599			$	10,540
Less:
Gains (losses) on sales of investment securities, net			1,436				319				(47		)		635				58
Unrealized gains (losses) on assets and liabilities measured at fair value, net			—				—				—				(1		)		37
Total operating non-interest income			12,252				10,137				10,648				9,965				10,445
Plus: net interest income			211,029				201,583				192,743				179,309				175,269
Net operating revenue (1)			$	223,281			$	211,720			$	203,391			$	189,274			$	185,714
Total non-interest expense			$	95,398			$	89,296			$	88,420			$	87,827			$	88,645
Less:
Net (gain) loss on sales and valuations of repossessed and other assets			(34		)		266				231				(543		)		(34		)
Acquisition / restructure expense			—				—				—				—				6,021
Total operating non-interest expense (1)			$	95,432			$	89,030			$	88,189			$	88,370			$	82,658
Operating pre-provision net revenue (2)			$	127,849			$	122,690			$	115,202			$	100,904			$	103,056
Plus:
Non-operating revenue adjustments			1,436				319				(47		)		634				95
Less:
Provision for credit losses			5,000				5,000				3,000				4,250				1,000
Non-operating expense adjustments			(34		)		266				231				(543		)		5,987
Income tax expense			34,973				34,899				31,964				24,489				26,364
Net income			$	89,346			$	82,844			$	79,960			$	73,342			$	69,800
(1), (2) See Non-GAAP Financial Measures footnotes.

Western Alliance Bancorporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Unaudited
Operating Pre-Provision Net Revenue by Year:
			Year Ended December 31,
			2017				2016
Total non-interest income			$	45,344			$	42,915
Less:
Gains (losses) on sales of investment securities, net			2,343				1,059
Unrealized gains (losses) on assets and liabilities measured at fair value, net			(1		)		8
Total operating non-interest income			43,002				41,848
Plus: net interest income			784,664				657,213
Net operating revenue (1)			$	827,666			$	699,061
Total non-interest expense			$	360,941			$	330,949
Less:
Net (gain) loss on sales and valuations of repossessed and other assets			(80		)		(125		)
Acquisition / restructure expense			—				12,412
Total operating non-interest expense (1)			$	361,021			$	318,662
Operating pre-provision net revenue (2)			$	466,645			$	380,399
Plus:
Non-operating revenue adjustments			2,342				1,067
Less:
Provision for credit losses			17,250				8,000
Non-operating expense adjustments			(80		)		12,287
Income tax expense			126,325				101,381
Net income			$	325,492			$	259,798

Tangible Common Equity:
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(dollars and shares in thousands)
Total stockholders' equity			$	2,229,160			$	2,145,627			$	2,058,674			$	1,968,992			$	1,891,529
Less: goodwill and intangible assets			300,748				301,157				301,645				302,133				302,894
Total tangible common equity			1,928,412				1,844,470				1,757,029				1,666,859				1,588,635
Plus: deferred tax - attributed to intangible assets			2,698				4,341				4,550				4,759				4,949
Total tangible common equity, net of tax			$	1,931,110			$	1,848,811			$	1,761,579			$	1,671,618			$	1,593,584
Total assets			$	20,329,085			$	19,922,221			$	18,844,745			$	18,122,506			$	17,200,842
Less: goodwill and intangible assets, net			300,748				301,157				301,645				302,133				302,894
Tangible assets			20,028,337				19,621,064				18,543,100				17,820,373				16,897,948
Plus: deferred tax - attributed to intangible assets			2,698				4,341				4,550				4,759				4,949
Total tangible assets, net of tax			$	20,031,035			$	19,625,405			$	18,547,650			$	17,825,132			$	16,902,897
Tangible common equity ratio (3)			9.6		%		9.4		%		9.5		%		9.4		%		9.4		%
Common shares outstanding			105,487				105,493				105,429				105,428				105,071
Tangible book value per share, net of tax (4)			$	18.31			$	17.53			$	16.71			$	15.86			$	15.17
(1), (2), (3), (4) See Non-GAAP Financial Measures footnotes.

Western Alliance Bancorporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Unaudited
Operating Efficiency Ratio by Quarter:
			Three Months Ended
			Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
			(in thousands)
Total operating non-interest expense			$	95,432			$	89,030			$	88,189			$	88,370			$	82,658
Divided by:
Total net interest income			211,029				201,583				192,743				179,309				175,269
Plus:
Tax equivalent interest adjustment			11,023				10,837				10,453				9,676				9,165
Operating non-interest income			12,252				10,137				10,648				9,965				10,445
			$	234,304			$	222,557			$	213,844			$	198,950			$	194,879
Operating efficiency ratio - tax equivalent basis (5)			40.7		%		40.0		%		41.2		%		44.4		%		42.4		%

Operating Efficiency Ratio:
			Year Ended December 31,
			2017				2016
			(in thousands)
Total operating non-interest expense			$	361,021			$	318,662
Divided by:
Total net interest income			784,664				657,213
Plus:
Tax equivalent interest adjustment			41,989				34,902
Operating non-interest income			43,002				41,848
			$	869,655			$	733,963
Operating efficiency ratio - tax equivalent basis (5)			41.5		%		43.4		%
(5) See Non-GAAP Financial Measures footnotes.

Western Alliance Bancorporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Unaudited
Regulatory Capital:
			December 31,
			2017				2016
			(in thousands)
Common Equity Tier 1:
Common equity			$	2,229,160			$	1,891,529
Less:
Non-qualifying goodwill and intangibles			296,420				294,754
Disallowed deferred tax asset			638				1,400
AOCI related adjustments			(9,496		)		(13,460		)
Unrealized gain on changes in fair value liabilities			7,786				8,118
Common equity Tier 1 (regulatory) (6) (9)			$	1,933,812			$	1,600,717
Divided by: estimated risk-weighted assets (regulatory (7) (9)			$	18,570,922			$	15,980,092
Common equity Tier 1 ratio (7) (9)			10.4		%		10.0		%
Common equity Tier 1 (regulatory) (6)(9)			1,933,812				1,600,717
Plus:
Trust preferred securities			81,500				81,500
Less:
Disallowed deferred tax asset			—				934
Unrealized gain on changes in fair value of liabilities			2,106				5,412
Tier 1 capital (7) (9)			$	2,013,206			$	1,675,871
Divided by: Tangible average assets			$	19,624,519			$	16,868,674
Tier 1 leverage ratio			10.3		%		9.9		%
Total Capital:
Tier 1 capital (regulatory) (6) (9)			$	2,013,206			$	1,675,871
Plus:
Subordinated debt			300,745				299,927
Qualifying allowance for credit losses			140,050				124,704
Other			6,174				6,978
Less: Tier 2 qualifying capital deductions			—				—
Tier 2 capital			$	446,969			$	431,609
Total capital			$	2,460,175			$	2,107,480
Total capital ratio			13.2		%		13.2		%
Classified assets to Tier 1 capital plus allowance for credit losses:
Classified assets			$	222,004			$	211,782
Divided by:
Tier 1 capital (7) (9)			2,013,206				1,675,871
Plus: Allowance for credit losses			140,050				124,704
Total Tier 1 capital plus allowance for credit losses			$	2,153,256			$	1,800,575
Classified assets to Tier 1 capital plus allowance (8) (9)			10.3		%		11.8		%
(6), (7), (8), (9) See Non-GAAP Financial Measures footnotes.

Non-GAAP Financial Measures Footnotes
(1)			We believe these non-GAAP measurements provide a useful indication of the cash generating capacity of the Company.
(2)			We believe this non-GAAP measurement is a key indicator of the earnings power of the Company.
(3)			We believe this non-GAAP ratio provides an important metric with which to analyze and evaluate financial condition and capital strength.
(4)			We believe this non-GAAP measurement improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.
(5)			We believe this non-GAAP ratio provides a useful metric to measure the operating efficiency of the Company.
(6)			Under the current guidelines of the Federal Reserve and the Federal Deposit Insurance Corporation, common equity Tier 1 capital consists of common stock, retained earnings, and minority interests in certain subsidiaries, less most other intangible assets.
(7)			Common equity Tier 1 is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of the risk categories defined under new capital guidelines. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each category are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) of the common equity Tier 1 ratio. Common equity Tier 1 is divided by the risk-weighted assets to determine the common equity Tier 1 ratio. We believe this non-GAAP ratio provides an important metric with which to analyze and evaluate financial condition and capital strength.
(8)			We believe this non-GAAP ratio provides an important regulatory metric to analyze asset quality.
(9)			Current quarter is preliminary until Call Report is filed.

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