Western Alliance Bancorporation, holding company for Bank of Nevada, reported Thursday that ink ran red in the second quarter though not as fast as during the first quarter.
The Las Vegas-based company narrowed its losses to $14.1 million from the $86.4 million recorded in the first quarter. It posted a $8.7 million gain from the sale of securities during the second quarter. Also, the writeoff of $45 million in goodwill for bank buyouts and $36 million write down of Bank of America preferred stock holdings contributed to the big loss in the first three months this year.
The second-quarter loss contrasts with a profit of $2.4 million in the second quarter last year. The loss per share was 31 cents, compared with 8 cents in earnings per share in the same period last year.
“It’s not great. It’s not terrible,” said Timothy Coffey, vice president of research for bank stock brokerage FIG Partners. “What I see is a management team that continues to struggle with the market but is doing the best they can.”
Coffey filtered out the “noise” in the numbers, such as taxes and impairment charges, and calculated that core pretax, pre-provision earnings were 22 cents per share.
That’s down from 36 cents for the first quarter of 2009 and for the fourth quarter of last year.
Wall Street showed a favorable opinion of the company with investment of $200 million in new shares of Western Alliance, he said. But the company was unable to quickly deploy the proceeds or it would have had stronger financial results in the second quarter, Coffey said.
The Nevada banks, which include Reno’s First Independent Bank and Bank of Nevada in Las Vegas, lost $3 million in the second quarter, compared with profit of $3.3 million in the same period last year.
Customer funds at the Nevada banks grew by $191 million in the second quarter to $2.7 billion. Loans declined $69 million in the second quarter to $2.6 billion in Nevada.
Nonperforming assets continue to drag down results companywide.
“Although I am disappointed by the increase in nonperforming assets and charge-off levels during the current quarter, we continue to see evidence that market contraction has slowed,” Chairman and Chief Executive Robert Sarver said in a statement.
The holding company boosted its allowance for loan losses to $84.1 million on June 30 from $77.2 million at the end of the first quarter.
The company charged off $30.6 million in loans, compared with $17.6 million in the first quarter. Nonaccrual loans grew to $116.4 million from $98.7 million in the first quarter.
However, loans past due for 90 days but still accruing declined to $36.1 million from $53.2 million in the first quarter.
Western Alliance boosted net loans to $3.9 billion from $3.8 billion a year ago but lower than the $4 billion in the first quarter of the current year.
Assets increased to $5.7 billion from $5.2 billion a year ago.
Western Alliance shares jumped 61 cents or 10 percent to close at $6.70 Thursday on the New York Stock Exchange.