Company: WAL-PA
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001212545-25-000141
Chunk: 145

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 145
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 the three months ended March 31, 2024 from a smaller net increase in loans. A net increase in investment securities drove a $629.1 million cash outflow for the three months ended March 31, 2025, which contributed to the decrease in the Company's cash balance during the period. A net increase in investment securities drove $3.3 billion of cash outflows for the three months ended March 31, 2024.

Net cash provided by financing activities was impacted significantly by deposit levels. During the three months ended March 31, 2025, net deposits increased $3.0 billion, compared to an increase of $6.9 billion during the three months ended March 31, 2024. 

Fluctuations in core deposit levels may increase the Company's need for liquidity as certificates of deposit mature or are withdrawn before maturity, and as non-maturity deposits, such as checking and savings account balances, are withdrawn. Additionally, the Company is exposed to the risk that customers with large deposit balances will withdraw all or a portion of such deposits, due in part to the FDIC limitations on the amount of insurance coverage provided to depositors. To partially mitigate uninsured deposit risk, the Company participates in reciprocal deposit programs, such as CDARS and ICS, which allow an individual customer to invest up to $50 million and $265 million, respectively, through one participating financial institution or, a combined total of $315 million per individual customer, with the entire amount being covered by FDIC insurance. As of March 31, 2025, the Company has $1.8 billion of CDARS and $9.6 billion of ICS deposits.

As of March 31, 2025, the Company has $6.2 billion of wholesale brokered deposits outstanding. Brokered deposits are generally considered to be deposits that have been received from a third party who is engaged in the business of placing deposits on behalf of others. A traditional deposit broker will direct deposits to the banking institution offering the highest interest rate available. Federal banking laws and regulations place restrictions on depository institutions regarding brokered deposits because of the general concern these deposits are not relationship based and are at a greater risk of being withdrawn and placed on deposit at another institution offering a higher interest rate, thus posing liquidity risk for institutions that gather brokered deposits in significant amounts. 

Federal and state banking regulations place certain restrictions on dividends paid. The total amount of dividends which may be paid at any date is generally limited to the retained earnings of