Company: WAL-PA
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001628280-25-047883
Chunk: 279

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 8
Chunk 279
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 speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Form 10-Q might not occur, and you should not put undue reliance on any forward-looking statements.

Recent Market and Banking Industry Developments

CRE Exposure

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 29% and 30% of total loans at September 30, 2025 and December 31, 2024, respectively. Approximately 14% and 16% of CRE loans, excluding construction and land loans, were owner occupied at September 30, 2025 and December 31, 2024, respectively, and less than 5% were non-owner occupied office loans at September 30, 2025 and December 31, 2024. Due to changing conditions in the CRE market, the Company has implemented enhanced measures to monitor and manage credit risk related to this portfolio segment, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. During the three and nine months ended September 30, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $12.9 million and $44.9 million, respectively, which primarily related to office properties. As the Company is focused on moving nonperforming loans through its standard credit resolution process, the Company took possession of five CRE office properties during the nine months ended September 30, 2025 which drove the net increase in other assets acquired through foreclosure from December 31, 2024. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio. 

Legal Dispute Related to Credit Facility

In August 2025, the Bank initiated a lawsuit in connection with its note finance revolving credit facility to Cantor Group V, LLC, citing allegations of fraud by the borrower for failing to provide collateral loans in first position, among other claims. Management has evaluated the existing collateral based on most recent “as-is” appraisals and believes it covers the obligation. In addition, under certain circumstances such as fraud,