Bank plans charge-off
Western Alliance Bancorporation, the $5.2 billion-asset holding company for Bank of Nevada and other banks, intends to charge off as much as $77 million because of investments that went bad.
The disclosure, made in a filing Thursday with the Securities and Exchange Commission, said its bank subsidiaries hold 18 collateralized debt obligations that are on a negative watch by Fitch Ratings. The CDOs remain investment grade, the report said.
Of the CDOs, five are deferring interest payments, and the others are current on interest payments.
The CDO securities total $108 million backed by pools of debt from 650 banking companies and are the only CDOs held by Western, Chief Financial Officer Dale Gibbons said.
The company expects the banking sector will continue to deteriorate next year, and Western decided to take the charges now so that the matter will not detract from its core banking operations next year, Gibbons said.
Western said it expects to record an after-tax impairment charge in the fourth quarter for $65 million to $70 million.
Western shares gained 19 cents, or 1.94 percent, Friday to close at $9.77 on the New York Stock Exchange.
