Western Alliance shares fall on new report

Western Alliance Bancorp shares plunged to their lowest level in more than 18 months in heavy trading Tuesday after the company reported that loan losses and other factors would slash second-quarter profits.

The Las Vegas-based holding company for Bank of Nevada expects to earn between 24 cents and 26 cents a share in the second quarter, compared with 39 cents in the first quarter.

Analysts were expecting the company to earn 42 cents a share, excluding extraordinary items.

Shares fell as low as $27.36 during trading Tuesday, a new 52-week loan. Western Alliance shares fell $1.65, or 5.47 percent, Tuesday to close at closed $28.52 on the New York Stock Exchange.

Stock in Western Alliance has dropped 13 percent in the last six months.

In reporting lower profit expectations, Western Alliance cited losses from three loans from acquired offices, merger-related expenses from buying the holding company for First Independent Bank of Reno and costs associated with revaluing securities.

Balance-sheet growth slowed. Loans increased 1 percent, and deposits shrank by 1 percent during the second quarter.

Western Alliance plans to set aside $1.9 million or 4 cents a share for loan losses after taxes for the second quarter. That's up from $400,000 in the first quarter.

The company attributed the loan loss provision to $2.2 million in loan losses from three loans at offices the company acquired last year.

Analysts believe more Nevada banks will take earnings hits as the once-rocketing real estate market slumps.

Western Alliance took a 2 cents-per-share after-tax charge related to terminating the lease of the Reno office of Bank of Nevada.