WESTERN ALLIANCE : Reports Results for the Fourth Quarter 2010

Western Alliance Bancorporation (NYSE:WAL) announced today its financial results for the fourth quarter 2010.

Fourth Quarter 2010 Highlights:

• Pre-tax, pre-provision operating earnings of $25.0 million, up 1.6% from $24.6 million in third quarter 2010 and 44.5% from $17.3 million in fourth quarter 2009¹
• Record net interest income of $60.9 million, compared to $59.5 million in prior quarter and $51.8 million in same quarter last year
• Net interest margin of 4.26%, compared to 4.32% in third quarter and 3.84% in fourth quarter last year
• Nonperforming assets (nonaccrual loans and repossessed assets) of 3.6% of total assets, compared to 3.9% in third quarter 2010 and 4.1% in fourth quarter 2009
• Total watch and classified loans (including nonaccrual) of $452 million at December 31, 2010, compared to $491 million at September 30, 2010 and $701 million at December 31, 2009
• Provision for credit losses of $18.4 million, compared to $23.0 million in third quarter and $40.8 million in fourth quarter last year
• Net loan charge-offs of $15.9 million, down from $24.8 million for the third quarter and $36.4 million in fourth quarter last year
• Net loss of $10.8 million, including pre-tax loss on repossessed asset valuations/sales of $13.0 million and mark-to-market charge from write-up of our junior subordinated debt of $6.7 million and net $0.4 million loss for all assets/liabilities measured at fair value in 2010
• Diluted net loss per common share of $0.17 compared to net loss of $0.01 for the third quarter of 2010 and $0.41 net loss for the fourth quarter 2009
• Tier I Leverage capital of 9.5% and Total Risk-Based Capital ratio of 13.2%, compared to 9.3% and 14.4% a year ago
• Consolidated its banking subsidiaries from five to three

Financial Performance

?2010 culminated with Western Alliance well along the road to recovery from the global recession,? said Robert Sarver, Chairman and Chief Executive Officer of Western Alliance Bancorporation. ?We had record net interest income, expanded our interest margin and improved our operating efficiency. Each of the leading indicators of future non-performing assets of delinquent, watch and classified loans declined every quarter last year, which resulted in our credit loss provision dropping by more than one third from 2009. As additions to impaired assets have slowed and property valuations stabilize, we expect more modest charges in the future than the losses on repossessed real estate we have recently incurred. Continuing declining credit costs in 2011, against the backdrop of our strong and growing operating franchise, will result in increased earnings power and a positive return to shareholders.?

Ken Vecchione, President and Chief Operating Officer, added, ?The fourth quarter of 2010 marked our sixth consecutive increase in our pre-tax, pre-provision income, up more than 50 percent since 2009. Our operating efficiency ratio dropped 8 points to 62 percent during the past year, which we expect to continue as we see continued revenue growth and little expense increase on the horizon, in part benefiting from cost efficiencies we will soon realize from the bank charter consolidations we completed at the end of 2010.¹ During 2010 we demonstrated our ability to grow loans and deposits, thus improving our franchise value in the face of a difficult economic environment.? Mr. Vecchione also noted, ?Net charge-offs for the fourth quarter declined 36% versus the prior quarter and provision for credit losses dropped 20% quarter to quarter.?

Western Alliance Bancorporation reported net loss of $10.8 million in the fourth quarter 2010, including a net loss from sales/valuation of repossessed assets of $13 million, a net loss from mark-to-market adjustments on assets/liabilities held at fair value of $6.7 million, and a loss on discontinued operations net of tax of $0.7 million.

The Company reported net loss per common share of $0.17 in the fourth quarter 2010. The loss included $0.10 loss from sales/valuations of repossessed assets after tax, a net loss from mark-to-market adjustments of $0.05 after tax, and a loss from discontinued affinity credit card operations held for sale net of tax of $0.01.

Total loans increased $67 million to $4.24 billion at December 31, 2010 from $4.17 billion on September 30, 2010. This increase was driven by growth in commercial and industrial and commercial real estate loans; partially offset by reductions in construction and land loans and residential real estate loans. Geographically, loans outstanding at our Las Vegas, Nevada affiliate decreased by $25 million and increased by $92 million at our other affiliates. For the full year, loans increased $161 million.

Total deposits increased $10 million to $5.34 billion at December 31, 2010 from $5.33 billion at September 30, 2010, with significant growth in non-interest bearing demand, time certificates of deposit and money market/savings accounts, largely offset by a decline in interest bearing demand deposits. Deposits increased $616 million from December 31, 2009.

Income Statement

Net interest income increased 2.4 percent to $60.9 million in the fourth quarter 2010 from $59.5 million in the third quarter 2010 and 17.6 percent compared to the fourth quarter 2009, propelled by both reductions in cost of funds and increases in asset yields. The net interest margin in the fourth quarter 2010 was 4.26 percent compared to 4.32 percent in the third quarter 2010 and 3.84 percent in the fourth quarter of 2009.

Operating non-interest income was $6.0 million for the fourth quarter 2010. This performance was a decrease from $7.7 million for the same period in 2009 and slight decrease from $6.3 million for the third quarter of 2010, resulting from the disposition of certain asset management businesses.¹

Net revenue was $66.9 million for the fourth quarter 2010, an increase of 1.7 percent from $65.8 million for the third quarter of 2010 and 12.4 percent from net revenue of $59.5 million for the fourth quarter 2009.¹

Operating non-interest expense was $41.9 million for the fourth quarter 2010, compared to $42.1 million for the same period in 2009.¹ For the third quarter 2010, operating non-interest expense was $41.3 million. The operating efficiency ratio was 62 percent for the fourth quarter 2010, compared to 71 percent for the fourth quarter 2009.¹ The Company had 908 full-time equivalent employees at December 31, 2010, compared to 930 one year ago.

A key performance metric for the Company is its pre-tax, pre-provision operating earnings, which it defines as net revenue less its operating non-interest expense.¹ For the fourth quarter 2010, the Company's performance was $25.0 million, compared to $24.6 million in the third quarter 2010 and $17.3 million in the fourth quarter 2009.¹

The provision for credit losses was $18.4 million for the fourth quarter 2010 compared to $23.0 million for the third quarter 2010 and $40.8 million for the fourth quarter 2009. Nonaccrual loans and repossessed assets were $225 million or 3.6 percent of total assets at December 31, 2010, compared with $241 million or 3.9 percent of total assets at September 30, 2010 and $237 million or 4.1 percent of total assets at December 31, 2009. Net loan charge-offs in the fourth quarter 2010 were $15.9 million or 1.52 percent of average loans (annualized), compared to $24.8 million or 2.41 percent of average loans (annualized) for the third quarter 2010 and $36.4 million or 3.68% of average loans (annualized) for the fourth quarter 2009. Loans past due 90 days and still accruing totaled $1.5 million at December 31, 2010, down from $5.7 million at September 30, 2010 and down from $5.5 million at December 31, 2009. Loans past due 30-89 days totaled $18.2 million at quarter end, down from $20.4 million at September 30, 2010 and down from $50.4 million at December 31, 2009. Classified assets to Tier I capital plus allowance for credit losses, a common regulatory measure of asset quality, improved to 52 percent at December 31, 2010 from 74 percent one year ago.¹

Net loss on sales and valuation of repossessed assets (primarily other real estate) was $13.0 million for the fourth quarter 2010 compared to $4.9 million in the prior quarter. Of the Company's $107.7 million in repossessed assets, 67 percent were new or re-appraised during the fourth quarter. For the fourth quarter 2010, mark-to-market losses were $6.7 million due to an increase in the liability for junior subordinated debt issued by the Company as credit spreads narrowed. At December 31, 2010, junior subordinated debt was valued at $43 million. Mark-to-market losses for the third quarter 2010 were $0.2 million.

At year end, the Company merged its Alta Alliance Bank subsidiary into Torrey Pines Bank and its First Independent Bank of Nevada subsidiary into Alliance Bank of Arizona and renamed the subsidiary Western Alliance Bank. The Company incurred $1.7 million in merger charges related to these transactions.

Balance Sheet

Gross loans totaled $4.24 billion at December 31, 2010, an increase of $67 million from September 30, 2010 and an increase of $161 million from $4.08 billion at December 31, 2009. At December 31, 2010 the allowance for credit losses was 2.61 percent of total loans up from 2.59 percent at September 30, 2010 and down from 2.66 percent at December 31, 2009.

Deposits totaled $5.34 billion at December 31, 2010, an increase of $10 million from $5.33 billion at September 30, 2010 and an increase of $616 million from $4.72 billion at December 31, 2009.

Non-interest bearing deposits increased by $21.6 million to $1.44 billion at December 31, 2010 from September 30, 2010 and increased $286.3 million from $1.16 billion at December 31, 2009. Non-interest bearing deposits comprised 27 percent of total deposits at December 31, 2010, compared to 24.5 percent a year ago.

At December 31, 2010 the Company's loans were 79.4 percent of deposits, compared to 86.4 percent one year earlier and 78.3 percent at September 30, 2010. Borrowings, including junior subordinated debt, totaled $116 million at December 31, 2010, down $15.8 million from one year earlier, and up $6.7 million for the quarter as a result of the junior subordinated debt valuation adjustment.

Stockholders' equity decreased to $602.2 million at December 31, 2010 from $619.8 million at September 30, 2010. At December 31, 2010, tangible common equity was 7 percent of tangible assets¹ and total risk-based capital was 13.2 percent of risk-weighted assets.

Total assets increased 7.7 percent to $6.19 billion at December 31, 2010 from $5.75 billion at December 31, 2009 and increased slightly from $6.18 billion at September 30, 2010.

¹ See Reconciliation of Non-GAAP Financial Measures table

Operating Unit Highlights

As of December 31, 2010, the Company merged its Alta Alliance Bank subsidiary into its Torrey Pines Bank subsidiary, and its First Independent Bank of Nevada subsidiary into its Alliance Bank of Arizona subsidiary. As part of the latter merger, Alliance Bank of Arizona was renamed Western Alliance Bank doing business as Alliance Bank of Arizona and First Independent Bank. As a result of the mergers and recent subsidiary sales the Company has changed its reportable operating segments. The new structure is segmented by bank entity as ?Bank of Nevada,? ?Western Alliance Bank,? ?Torrey Pines Bank? and ?Other? which includes Western Alliance Bancorporation, Western Alliance Equipment Finance, Shine Investment Advisory Services, and discontinued operations. Prior period data has been restated to reflect this change.

Bank of Nevada banking operations reported that loans declined $25 million during the fourth quarter and declined $158 million during the last 12 months to $1.91 billion at December 31, 2010. Deposits decreased $19 million since September 30, 2010 and increased $184 million over the last twelve months to $2.39 billion. Net loss for Bank of Nevada was $5.8 million during the fourth quarter 2010, compared with a net loss of $6.9 million for the third quarter of 2010 and $12.7 million during the fourth quarter 2009.

Western Alliance Bank reported loan growth of $38 million during the fourth quarter 2010 and an increase of $180 million during the last 12 months to $1.31 billion. Deposits decreased $60 million in the fourth quarter and increased $231 million during the last 12 months to $1.67 billion. Net income for Western Alliance Bank was $3.6 million during the fourth quarter 2010, compared with net income of $4.3 million during the third quarter of 2010 and a net loss of $4.0 million during the fourth quarter 2009.

Our Torrey Pines Bank operations reported that loans increased $54 million during the fourth quarter 2010 and increased $189 million during the last 12 months to $1.06 billion. Deposits increased $49 million and $200 million to $1.28 billion during the same periods, respectively. Net income for Torrey Pines Bank was $3.2 million during the fourth quarter 2010, compared with a net income of $4.0 million for the third quarter of 2010 and net loss of $1.6 million during the fourth quarter 2009.

Attached to this press release is summarized financial information for the quarter and year to date ended December 31, 2010.

Conference Call and Webcast

Western Alliance Bancorporation will host a conference call and live audio webcast to discuss its fourth quarter 2010 financial results at 11:00 a.m. ET on Thursday, January 27, 2011. Participants may access the call by dialing 1-866-843-0890 and using passcode: 1271738 or via live audio webcast using the website link: http://www.talkpoint.com/viewer/starthere.asp?Pres=133937. The webcast is also available via our website at www.westernalliancebancorp.com. Participants should log in at least 15 minutes early to receive instructions. The call will be recorded and made available for replay after 2:00 p.m. ET January 27 until 9:00 a.m. ET February 17 by dialing 1-877-344-7529 using the passcode 447485.

About Western Alliance Bancorporation

Western Alliance Bancorporation is the parent company of Bank of Nevada, Western Alliance Bank doing business as Alliance Bank of Arizona and First Independent Bank, Torrey Pines Bank, and Shine Investment Advisory Services. These dynamic organizations provide a broad array of deposit and credit services to clients in Nevada, Arizona and California, and investment services in Colorado. Staffed with experienced financial professionals, these organizations deliver a broader product array and larger credit capacity than community banks, yet are empowered to be more responsive to customers' needs than larger institutions. Additional investor information can be accessed on the Investor Relations page of the company's website, www.westernalliancebancorp.com.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include: factors listed in the Form 10-K as filed with the Securities and Exchange Commission; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management's estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes or changes in accounting principles, policies or guidelines; management's estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.

We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements set forth in this press release to reflect new information, future events or otherwise.

This press release contains both financial measures based on accounting principles generally accepted in the United States (?GAAP?) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Western Alliance Bancorporation's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data
Unaudited
		At or for the Three Months																For the Twelve Months
		Ended December 31,																Ended December 31,
		2010					2009					Change %						2010					2009					Change %
		(in thousands, except per share data)
Selected Balance Sheet Data:
(dollars in millions)
Total assets		$	6,193.9				$	5,753.3				7.7		%
Loans, net of deferred fees			4,240.5					4,079.6				3.9
Securities and money market investments			1,273.1					864.8				47.2
Federal funds sold			0.9					3.5				(74.3	)
Total deposits			5,338.4					4,722.1				13.1
Borrowings			73.0					29.4				148.3
Junior subordinated and subordinated debt			43.0					102.4				(58.0	)
Stockholders' equity			602.2					575.7				4.6
Selected Income Statement Data:
(dollars in thousands)
Interest income		$	72,374				$	67,813				6.7		%				$	281,813				$	276,023				2.1		%
Interest expense			11,463					16,025				(28.5	)						49,260					73,734				(33.2	)
Net interest income			60,911					51,788				17.6							232,553					202,289				15.0
Provision for loan losses			18,384					40,792				(54.9	)						93,211					149,099				(37.5	)
Net interest income after provision for credit losses			42,527					10,996				286.7							139,342					53,190				162.0
Non-interest income			(720	)				4,269				(116.9	)						46,836					4,435				956.1
Non-interest expense			56,545					51,320				10.2							196,758					242,977				(19.0	)
Loss from continuing operations before income taxes			(14,738	)				(36,055	)			(59.1	)						(10,580	)				(185,352	)			(94.3	)
Income tax benefit			(4,580	)				(10,258	)			(55.4	)						(6,410	)				(38,453	)			(83.3	)
Loss from continuing operations			(10,158	)				(25,797	)			(60.6	)						(4,170	)				(146,899	)			(97.2	)	%
Loss on discontinued operations, net			(657	)				(1,115	)			(41.1	)						(3,025	)				(4,507	)
Net loss		$	(10,815	)			$	(26,912	)			(59.8	)	%				$	(7,195	)			$	(151,406	)
Diluted net loss from continuing operations		$	(0.16	)			$	(0.39	)									$	(0.19	)			$	(2.66	)
Diluted net loss from discontinued operations, net of tax		$	(0.01	)			$	(0.02	)									$	(0.04	)			$	(0.08	)
Diluted net loss per common share		$	(0.17	)			$	(0.41	)			(58.5	)	%				$	(0.23	)			$	(2.74	)			(91.7	)	%
Common Share Data:
Diluted net income (loss) per common share		$	(0.17	)			$	(0.41	)			(58.5	)	%				$	(0.23	)			$	(2.74	)			(91.7	)	%
Book value per common share		$	5.77				$	6.18				(6.6	)	%
Tangible book value per share, net of tax (1)		$	5.35				$	5.66				(5.5	)	%
Average shares outstanding (in thousands):
Basic			80,522					71,788				12.2							75,083					58,836				27.6
Diluted			80,522					71,788				12.2							75,083					58,836				27.6
Common shares outstanding			81,669					72,504				12.6
(1) See Reconciliation of Non-GAAP Financial Measures
Western Alliance Bancorporation and Subsidiaries
Summary Consolidated Financial Data (continued)
Unaudited
		At or for the Three Months																For the Twelve Months
		Ended December 31,																Ended December 31,
		2010					2009					Change %						2010					2009					Change %
		(in thousands, except per share data)
Selected Performance Ratios:
Return on average assets (1)			(0.69	)	%			(1.83	)	%		(62.3	)	%					(0.12	)	%			(2.72	)	%		(95.6	)	%
Return on average stockholders' equity (1)			(6.85	)				(17.57	)			(61.0	)						(1.20	)				(25.83	)			(95.4	)
Net interest margin (1)			4.26					3.84				10.9							4.23					3.97				6.5
Net interest spread			3.97					3.45				15.1							3.92					3.52				11.4
Efficiency ratio - tax equivalent basis (2)			62.19					70.57				(11.9	)
Loan to deposit ratio			79.43					86.39				(8.1	)
Capital Ratios:
Tangible equity (2)			9.1		%			9.3		%		(1.9	)	%
Tangible common equity (2)			7.0					7.1				(0.9	)
Tier one common equity (2)			8.5					8.2				3.6
Tier 1 Leverage ratio (3)			9.5					9.3				2.2
Tier 1 Risk Based Capital (3)			12.0					11.8				1.7
Total Risk Based Capital (3)			13.2					14.4				(8.3	)
Asset Quality Ratios:
Net charge-offs to average loans outstanding (1)			1.52		%			3.68		%		(58.7	)	%					2.22		%			3.24		%		(31.5	)	%
Nonaccrual loans to gross loans			2.76					3.77				(26.8	)
Nonaccrual loans and repossessed assets to total assets			3.63					4.12				(11.9	)
Loans past due 90 days and still accruing to total loans			0.03					0.14				(78.6	)
Allowance for credit losses to loans			2.61					2.66				(1.9	)
Allowance for credit losses to nonaccrual loans			94.62					70.67				33.9
(1) Annualized for the three and twelve month periods ended December 31, 2010 and 2009.
(2) See Reconciliation of Non-GAAP Financial Measures.
(3) Capital ratios are preliminary until Call Reports are filed.

Western Alliance Bancorporation and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2010				2009				2010				2009
Interest income:		(dollars in thousands)
Loans		$	64,985			$	60,532			$	255,626			$	248,098
Investment securities			7,054				6,621				24,732				26,689
Federal funds sold and other			335				660				1,455				1,236
Total interest income			72,374				67,813				281,813				276,023
Interest expense:
Deposits			8,652				13,785				41,329				61,905
Customer repurchase agreements			65				466				538				3,629
Borrowings			2,032				526				3,745				3,234
Junior subordinated and subordinated debt			714				1,248				3,648				4,966
Total interest expense			11,463				16,025				49,260				73,734
Net interest income			60,911				51,788				232,553				202,289
Provision for credit losses			18,384				40,792				93,211				149,099
Net interest income after provision for credit losses			42,527				10,996				139,342				53,190
Non-interest income
Unrealized (losses) gains on assets/liabilities measured at fair value, net			(6,710	)			(1,874	)			(369	)			3,631
Securities impairment charges			(12	)			(1,748	)			(1,186	)			(43,784	)
Gains on sales of investment securities, net			-				167				19,757				16,100
Gain on extinguishment of debt			-				-				3,000				-
Trust and investment advisory services			608				2,320				4,003				9,287
Service charges			2,177				2,298				8,969				8,172
Operating lease income			864				1,091				3,793				4,066
Bank owned life insurance			1,027				669				3,299				2,193
Other			1,326				1,346				5,570				4,770
			(720	)			4,269				46,836				4,435
Non-interest expenses:
Salaries and employee benefits			21,125				20,807				86,586				91,504
Occupancy			5,075				5,040				19,580				20,802
Insurance			4,109				2,991				15,475				12,525
Net loss on sales and valuations of repossessed assets			12,991				5,081				28,826				21,274
Repossessed asset and loan expenses			2,230				1,779				8,076				6,363
Legal, professional and director's fees			2,038				3,978				7,591				8,973
Merger related expenses			1,651				-				1,651				-
Customer service			1,050				986				4,256				4,131
Intangible amortization			889				945				3,604				3,781
Marketing			982				1,185				4,061				4,915
Data Processing			948				971				3,374				4,274
Operating lease depreciation			542				750				2,506				3,229
Goodwill impairment			-				4,095				-				49,671
Other			2,915				2,712				11,172				11,535
			56,545				51,320				196,758				242,977
Loss from continuing operations before income taxes			(14,738	)			(36,055	)			(10,580	)			(185,352	)
Income tax benefit			(4,580	)			(10,258	)			(6,410	)			(38,453	)
Loss from continuing operations			(10,158	)			(25,797	)			(4,170	)			(146,899	)
Loss from discontinued operations net of tax benefit			(657	)			(1,115	)			(3,025	)			(4,507	)
Net loss			(10,815	)			(26,912	)			(7,195	)			(151,406	)
Preferred stock dividends			1,750				1,750				7,000				7,000
Accretion on preferred stock discount			734				697				2,882				2,742
Net loss available to common stockholders		$	(13,299	)		$	(29,359	)		$	(17,077	)		$	(161,148	)
Loss per share		$	(0.17	)		$	(0.41	)		$	(0.23	)		$	(2.74	)

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Statements of Operations
Unaudited		Three Months Ended
		Dec. 31,				Sept. 30,				June 30,				Mar. 31,				Dec. 31,
		2010				2010				2010				2010				2009
Interest income:		(in thousands, except per share data)
Loans		$	64,985			$	64,273			$	64,201			$	62,167			$	60,532
Investment securities			7,054				6,047				5,327				6,304				6,621
Federal funds sold and other			335				385				472				263				660
Total interest income			72,374				70,705				70,000				68,734				67,813
Interest expense:
Deposits			8,652				9,531				11,067				12,079				13,785
Borrowings			2,097				970				483				733				992
Junior subordinated and subordinated debt			714				736				994				1,204				1,248
Total interest expense			11,463				11,237				12,544				14,016				16,025
Net interest income			60,911				59,468				57,456				54,718				51,788
Provision for credit losses			18,384				22,965				23,115				28,747				40,792
Net interest income after provision for credit losses			42,527				36,503				34,341				25,971				10,996
Non-interest income
Mark-to-market (losses) gains, net			(6,710	)			(210	)			6,250				301				(1,874	)
Gains on sales of investment securities, net			-				5,460				6,079				8,218				167
Gain on extinguishment of debt			-				-				3,000				-				-
Securities impairment charges			(12	)			-				(1,071	)			(103	)			(1,748	)
Trust and investment advisory services			608				1,001				1,181				1,213				2,320
Service charges			2,177				2,276				2,319				2,197				2,298
Operating lease income			864				998				967				964				1,091
Bank owned life insurance			1,027				773				780				719				669
Other			1,326				1,869				1,255				1,120				1,346
			(720	)			12,167				20,760				14,629				4,269
Non-interest expenses:
Salaries and employee benefits			21,125				21,860				22,161				21,440				20,807
Occupancy			5,075				4,890				4,828				4,787				5,040
Insurance			4,109				4,115				3,759				3,492				2,991
Repossessed asset and loan expenses			2,230				1,918				1,564				2,364				1,779
Net (gain) loss on sales and valuations of repossessed assets			12,991				4,855				11,994				(1,014	)			5,081
Legal, professional and director's fees			2,038				1,546				2,139				1,868				3,978
Merger related expense			1,651				-				-				-				-
Marketing			982				878				1,045				1,156				1,185
Intangible amortization			889				901				907				907				945
Customer service			1,050				987				1,154				1,065				986
Data Processing			948				842				793				791				971
Operating lease depreciation			542				627				647				689				750
Goodwill impairment			-				-				-				-				4,095
Other			2,915				2,690				2,271				3,298				2,712
			56,545				46,109				53,262				40,843				51,320
Income (loss) from continuing operations before income taxes			(14,738	)			2,561				1,839				(243	)			(36,055	)
Income tax benefit			(4,580	)			(79	)			(190	)			(1,562	)			(10,258	)
Income (loss) from continuing operations		$	(10,158	)		$	2,640			$	2,029			$	1,319			$	(25,797	)
Loss from discontinued operations, net of tax			(657	)			(631	)			(802	)			(935	)			(1,115	)
Net income (loss)		$	(10,815	)		$	2,009			$	1,227			$	384			$	(26,912	)
Preferred stock dividends			1,750				1,750				1,750				1,750				1,750
Accretion on preferred stock			734				716				716				716				697
Net loss available to common stockholders		$	(13,299	)		$	(457	)		$	(1,239	)		$	(2,082	)		$	(29,359	)
Loss per share		$	(0.17	)		$	(0.01	)		$	(0.02	)		$	(0.03	)		$	(0.41	)

Western Alliance Bancorporation and Subsidiaries
Five Quarter Condensed Consolidated Balance Sheets
Unaudited
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
		2010				2010				2010				2010				2009
Assets:		(in millions)
Cash and due from banks		$	215.8			$	615.0			$	560.6			$	827.6			$	393.3
Federal funds sold			0.9				1.0				-				2.4				3.5
Cash and cash equivalents			216.7				616.0				560.6				830.0				396.8
Securities and money market investments			1,273.1				929.7				848.6				781.1				864.8
Loans:
Commercial			934.6				876.8				832.8				757.9				802.2
Commercial real estate - owner occupied			1,223.1				1,227.7				1,234.1				1,209.3				1,091.4
Construction and land development			451.5				488.3				532.4				556.9				623.2
Commercial real estate - non-owner occupied			1,038.5				981.4				926.0				902.9				933.2
Residential real estate			527.3				533.6				536.1				560.2				568.3
Consumer			71.5				71.4				74.6				77.6				80.3
Deferred fees, net			(6.0	)			(5.7	)			(6.0	)			(5.7	)			(19.0	)
			4,240.5				4,173.5				4,130.0				4,059.1				4,079.6
Allowance for credit losses			(110.7	)			(108.2	)			(110.0	)			(112.7	)			(108.6	)
Loans, net			4,129.8				4,065.3				4,020.0				3,946.4				3,971.0
Premises and equipment, net			114.4				116.5				118.7				121.2				125.9
Other repossessed assets			107.7				110.1				104.4				105.6				83.3
Bank owned life insurance			129.8				94.8				94.0				93.2				92.5
Goodwill and other intangibles			39.3				40.2				41.3				42.2				43.1
Other assets			183.1				206.5				171.9				176.5				175.9
Total assets		$	6,193.9			$	6,179.1			$	5,959.5			$	6,096.2			$	5,753.3
Liabilities and Stockholders' Equity:
Liabilities:
Deposits:
Non-interest bearing demand deposits		$	1,443.3			$	1,421.7			$	1,330.4			$	1,348.7			$	1,157.0
Interest bearing
Demand			523.8				645.4				611.4				510.2				362.7
Savings and money market			1,926.1				1,892.2				1,845.9				1,798.5				1,752.5
Time certificates			1,445.2				1,369.2				1,442.5				1,532.7				1,449.9
Total deposits			5,338.4				5,328.5				5,230.2				5,190.1				4,722.1
Customer repurchase agreements			109.4				86.8				87.1				169.1				223.3
Total customer funds			5,447.8				5,415.3				5,317.3				5,359.2				4,945.4
Borrowings			73.0				72.9				-				20.0				29.4
Junior subordinated and subordinated debt			43.0				36.3				36.3				102.3				102.4
Accrued interest payable and other liabilities			27.9				34.8				30.0				39.0				100.4
Total liabilities			5,591.7				5,559.3				5,383.6				5,520.5				5,177.6
Stockholders' Equity
Common stock and additional paid-in capital			739.6				737.8				688.2				686.0				684.1
Preferred Stock			130.8				130.1				129.4				128.7				127.9
Retained earnings (deficit)			(258.8	)			(245.5	)			(245.0	)			(243.7	)			(241.7	)
Accumulated other comprehensive income (loss)			(9.4	)			(2.6	)			3.3				4.7				5.4
Total stockholders' equity			602.2				619.8				575.9				575.7				575.7
Total liabilities and stockholders' equity		$	6,193.9			$	6,179.1			$	5,959.5			$	6,096.2			$	5,753.3

Western Alliance Bancorporation and Subsidiaries
Changes in the Allowance For Credit Losses
Unaudited
		Three Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
		2010				2010				2010				2010				2009
		(in thousands)
Balance, beginning of period		$	108,170			$	110,013			$	112,724			$	108,623			$	104,181
Provision for credit losses			18,384				22,965				23,115				28,747				40,792
Recoveries of loans previously charged-off:
Construction and land development			773				214				1,801				409				888
Commercial real estate			13				160				808				22				91
Residential real estate			304				1,209				295				231				340
Commercial and industrial			800				389				573				1,238				216
Consumer			36				47				14				67				42
Total recoveries			1,926				2,019				3,491				1,967				1,577
Loans charged-off:
Construction and land development			3,221				3,843				7,921				8,638				9,859
Commercial real estate			7,297				12,813				7,827				5,884				6,204
Residential real estate			3,278				3,695				7,835				5,855				5,909
Commercial and industrial			2,823				5,036				4,602				4,757				14,924
Consumer			1,162				1,440				1,132				1,479				1,031
Total loans charged-off			17,781				26,827				29,317				26,613				37,927
Net loans charged-off			15,855				24,808				25,826				24,646				36,350
Balance, end of period		$	110,699			$	108,170			$	110,013			$	112,724			$	108,623
Net charge-offs (annualized) to average loans outstanding			1.52	%			2.41	%			2.53	%			2.43	%			3.68	%
Allowance for credit losses to gross loans			2.61				2.59				2.66				2.78				2.66
Nonaccrual loans		$	116,999			$	130,905			$	134,264			$	148,760			$	153,702
Repossessed assets			107,655				110,096				104,365				105,637				83,347
Loans past due 90 days, still accruing			1,458				5,667				8,233				8,437				5,538
Loans past due 30 to 89 days, still accruing			18,164				20,432				20,343				38,611				50,376
Classified loans (including nonaccrual)			256,657				285,972				304,270				336,624				374,847
Watch loans			194,905				205,114				257,715				266,734				325,721

Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
		Three Months Ended December 31,
		2010										2009
		Average Balance				Interest			Average Yield/ Cost			Average Balance				Interest			Average Yield/ Cost
Interest earning assets		($ in millions)				($ in thousands)						($ in millions)				($ in thousands)
Investment securities (1)		$	1,122.8			$	7,054		2.66	%		$	806.0			$	6,621		3.39	%
Federal funds sold and other			3.0				9		1.19	%			54.4				277		2.02	%
Loans (1)			4,169.3				64,985		6.18	%			3,953.4				60,532		6.07	%
Short term investments			376.7				269		0.28	%			516.1				376		0.29	%
Investment in restricted stock			38.5				57		0.59	%			41.4				7		0.07	%
Total interest earning assets			5,710.3				72,374		5.06	%			5,371.3				67,813		5.03	%
Non-interest earning assets
Cash and due from banks			137.1										161.1
Allowance for credit losses			(111.4	)									(108.3	)
Bank owned life insurance			117.0										92.1
Other assets			406.9										303.7
Total assets		$	6,259.9									$	5,819.9
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts		$	632.5			$	676		0.42	%		$	348.2			$	753		0.86	%
Savings and money market			1,930.8				3,830		0.79	%			1,793.4				5,463		1.21	%
Time certificates of deposit			1,408.3				4,146		1.17	%			1,462.5				7,372		2.00	%
Total interest-bearing deposits			3,971.6				8,652		0.86	%			3,604.1				13,588		1.50	%
Borrowings			160.0				2,097		5.20	%			308.2				1,189		1.53	%
Junior subordinated and subordinated debt			36.4				714		7.78	%			101.9				1,248		4.86	%
Total interest-bearing liabilities			4,168.0				11,463		1.09	%			4,014.2				16,025		1.58	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits			1,434.4										1,166.7
Other liabilities			31.4										31.4
Stockholders' equity			626.1										607.6
Total liabilities and stockholders' equity		$	6,259.9									$	5,819.9
Net interest income and margin						$	60,911		4.26	%						$	51,788		3.84	%
Net interest spread									3.97	%									3.45	%
(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $464 and $265 for the fourth quarter ended 2010 and 2009, respectively.
(2) Net interest income and margin for the quarter ended September 30, 2010 was 4.32% as furnished in the second quarter report.

Western Alliance Bancorporation and Subsidiaries
Analysis of Average Balances, Yields and Rates
Unaudited
		Twelve Months Ended December 31,
		2010										2009
		Average Balance				Interest			Average Yield/ Cost			Average Balance				Interest			Average Yield/ Cost
Interest earning assets		($ in millions)				($ in thousands)						($ in millions)				($ in thousands)
Investment securities (1)		$	915.2			$	24,753		2.83	%		$	690.4			$	25,815		3.91	%
Federal funds sold and other			17.3				141		0.82	%			33.5				1,103		3.29	%
Loans (1)			4,105.0				255,626		6.23	%			4,037.7				248,098		6.14	%
Short term investments			448.8				1,130		0.25	%			322.9				874		0.27	%
Investment in restricted stock			40.2				163		0.41	%			41.1				133		0.32	%
Total interest earning assets			5,526.5				281,813		5.12	%			5,125.6				276,023		5.41	%
Non-interest earning assets
Cash and due from banks			116.6										174.1
Allowance for credit losses			(114.1	)									(88.2	)
Bank owned life insurance			99.4										91.3
Other assets			402.2										272.2
Total assets		$	6,030.6									$	5,575.0
Interest-bearing liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts		$	581.1			$	2,898		0.50	%		$	303.4			$	3,216		1.06	%
Savings and money market			1,861.7				16,724		0.90	%			1,666.7				26,903		1.61	%
Time certificates of deposits			1,437.2				21,707		1.51	%			1,280.4				31,786		2.48	%
Total interest-bearing deposits			3,880.0				41,329		1.07	%			3,250.5				61,905		1.90	%
Borrowings			158.4				4,283		2.70	%			538.0				6,863		1.28	%
Junior subordinated and subordinated debt			62.3				3,648		5.86	%			103.0				4,966		4.82	%
Total interest-bearing liabilities		$	4,100.7				49,260		1.20	%		$	3,891.5				73,734		1.89	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits			1,296.6										1,070.0
Other liabilities			32.1										27.3
Stockholders' equity			601.2										586.2
Total liabilities and stockholders' equity		$	6,030.6									$	5,575.0
Net interest income and margin						$	232,553		4.23	%						$	202,289		3.97	%
Net interest spread									3.92	%									3.52	%
(1) Yields on loans and securities have been adjusted to a tax equivalent basis. The taxable-equivalent adjustment was $1,164 and $1,210 for the year ended December 31, 2010 and 2009, respectively.

Western Alliance Bancorporation and Subsidiaries
Operating Segment Results																		Inter-
Unaudited																		segment				Consoli-
		Bank				Western				Torrey								elimi-				dated
		of Nevada				Alliance Bank				Pines Bank				Other				nations				Company
At December 31, 2010		(in millions)
Assets		$	2,771.4			$	1,953.5			$	1,452.2			$	731.0			$	(714.2	)		$	6,193.9
Gross loans and deferred fees, net			1,914.1				1,305.4				1,063.8				-				(42.8	)			4,240.5
Less: Allowance for credit losses			(73.5	)			(20.4	)			(16.8	)			-				-				(110.7	)
Net loans			1,840.6				1,285.0				1,047.0				-				(42.8	)			4,129.8
Goodwill			23.2				-				-				2.7				-				25.9
Deposits			2,388.3				1,671.1				1,281.6				-				(2.6	)			5,338.4
Stockholders' equity			310.6				163.3				135.5				609.6				(616.8	)			602.2
No. of branches			12				16				11				-				-				39
No. of FTE			421				225				203				59.0				-				908
Three Months Ended December 31, 2010:
		(in thousands)
Net interest income		$	26,857			$	18,997			$	17,311				(2,254.0	)		$	-			$	60,911
Provision for credit losses			15,935				-				2,449				-				-				18,384
Net interest income (loss) after provision for credit losses			10,922				18,997				14,862				(2,254	)			-				42,527
Non-interest income			3,506				1,760				1,040				(4,853	)			(2,173	)			(720	)
Non-interest expense			(23,414	)			(14,840	)			(10,220	)			(10,244	)			2,173				(56,545	)
Income (loss) from continuing operations before income taxes			(8,986	)			5,917				5,682				(17,351	)			-				(14,738	)
Income tax expense (benefit)			(3,206	)			2,361				2,449				(6,184	)			-				(4,580	)
Income (loss) from continuing operations			(5,780	)			3,556				3,233				(11,167	)			-				(10,158	)
Loss from discontinued operations, net			-				-				-				(657	)			-				(657	)
Net income (loss)		$	(5,780	)		$	3,556			$	3,233			$	(11,824	)		$	-			$	(10,815	)
Twelve Months Ended December 31, 2010:
		(in thousands)
Net interest income		$	104,536			$	69,223			$	62,714			$	(3,920	)		$	-			$	232,553
Provision for credit losses			76,669				6,374				10,168				-				-				93,211
Net interest income (loss) after provision for credit losses			27,867				62,849				52,546				(3,920	)			-				139,342
Non-interest income			21,053				9,369				4,489				11,925				-				46,836
Non-interest expense			(90,336	)			(51,270	)			(38,893	)			(16,259	)			-				(196,758	)
Income (loss) from continuing operations before income taxes			(41,416	)			20,948				18,142				(8,254	)			-				(10,580	)
Income tax expense (benefit)			(15,010	)			8,147				7,825				(7,372	)			-				(6,410	)
Income (loss) from continuing operations			(26,406	)			12,801				10,317				(882	)			-				(4,170	)
Loss from discontinued operations, net			-				-				-				(3,025	)			-				(3,025	)
Net income (loss)		$	(26,406	)		$	12,801			$	10,317			$	(3,907	)		$	-			$	(7,195	)
Western Alliance Bancorporation and Subsidiaries
Operating Segment Results
Unaudited																		Inter-
																		segment				Consoli-
		Bank				Western				Torrey								elimi-				dated
		of Nevada				Alliance Bank				Pines Bank				Other				nations				Company
At December 31, 2009:		(in millions)
Assets		$	2,779.1			$	1,640.8			$	1,338.1			$	132.8			$	(137.4	)		$	5,753.3
Gross loans and deferred fees, net			2,072.4				1,125.4				924.8				-				(43.0	)			4,079.6
Less: Allowance for credit losses			(67.8	)			(26.3	)			(14.5	)			-				-				(108.6	)
Net loans			2,004.6				1,099.1				910.3				-				(43.0	)			3,971.0
Goodwill			23.2				-				-				2.7				-				25.9
Customer deposits			2,203.8				1,439.8				1,081.9				-				(3.4	)			4,722.1
Stockholders' equity			251.7				121.9				122.0				85.7				(5.6	)			575.7
No. of branches			12				16				9				-				-				37
No. of FTE			438				224				205				63				-				930
Three Months Ended December 31, 2009:		(in thousands)
Net interest income		$	26,129			$	13,695			$	11,965			$	(1	)		$	-			$	51,788
Provision for credit losses			26,635				9,012				5,145				0				-				40,792
Net interest income after provision for credit losses			(506	)			4,683				6,820				(1	)			-				10,996
Non-interest income			1,843				1,576				851				1,284				(1,285	)			4,269
Non-interest expense			(20,196	)			(11,939	)			(9,968	)			(10,502	)			1,285				(51,320	)
Income (loss) from continuing operations before income taxes			(18,859	)			(5,680	)			(2,297	)			(9,219	)			-				(36,055	)
Income tax expense (benefit)			(6,199	)			(1,675	)			(699	)			(1,685	)			-				(10,258	)
Income (loss) from continuing operations			(12,660	)			(4,005	)			(1,598	)			(7,534	)			-				(25,797	)
Loss from discontinued operations, net			-				-				-				(1,115	)			-				(1,115	)
Net income (loss)		$	(12,660	)		$	(4,005	)		$	(1,598	)		$	(8,649	)		$	-			$	(26,912	)
Twelve Months Ended December 31, 2009:		(in thousands)
Net interest income		$	106,014			$	52,521			$	45,205			$	(1,451	)		$	-			$	202,289
Provision for credit losses			104,859				30,450				13,790				0				-				149,099
Net interest income after provision for credit losses			1,155				22,071				31,415				(1,451	)			-				53,190
Non-interest income			6,093				5,617				4,319				(7,009	)			(4,585	)			4,435
Goodwill impairment charge			(45,000	)			-				-				(4,670	)			-				(49,670	)
Non-interest expense			(87,977	)			(51,832	)			(40,383	)			(17,700	)			4,585				(193,307	)
Income (loss) from continuing operations before income taxes			(125,729	)			(24,144	)			(4,649	)			(30,830	)			-				(185,352	)
Income tax expense (benefit)			(28,074	)			(8,542	)			(1,386	)			(451	)			-				(38,453	)
Income (loss) from continuing operations			(97,655	)			(15,602	)			(3,263	)			(30,379	)			-				(146,899	)
Loss from discontinued operations, net			-				-				-				(4,507	)			-				(4,507	)
Net income (loss)		$	(97,655	)		$	(15,602	)		$	(3,263	)		$	(34,886	)		$	-			$	(151,406	)

Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
		Dec. 31,				Sept. 30,				June 30,				Mar. 31,				Dec. 31,
		2010				2010				2010				2010				2009
		(dollars in thousands)
Total stockholders' equity		$	602,174			$	619,764			$	575,858			$	575,779			$	575,725
Less:
Goodwill and intangible assets			39,291				40,180				41,307				42,214				43,121
Total tangible stockholders' equity			562,883				579,584				534,551				533,565				532,604
Less:
Preferred stock			130,827				130,094				129,378				128,661				127,945
Total tangible common equity			432,056				449,490				405,173				404,904				404,659
Add:
Deferred tax			4,774				5,087				5,400				5,713				6,026
Total tangible common equity, net of tax		$	436,830			$	454,577			$	410,573			$	410,617			$	410,685
Total assets		$	6,193,883			$	6,179,146			$	5,959,479			$	6,096,238			$	5,753,279
Less:
Goodwill and intangible assets			39,291				40,180				41,307				42,214				43,121
Tangible assets			6,154,592				6,138,966				5,918,172				6,054,024				5,710,158
Add:
Deferred tax			4,774				5,087				5,400				5,713				6,026
Total tangible assets, net of tax		$	6,159,366			$	6,144,053			$	5,923,572			$	6,059,737			$	5,716,184
Tangible equity ratio (1)			9.1	%			9.4	%			9.0	%			8.8	%			9.3	%
Tangible common equity ratio (2)			7.0	%			7.3	%			6.8	%			6.7	%			7.1	%
Common shares outstanding			81,669				81,503				73,344				73,031				72,504
Tangible book value per share, net of tax (3)		$	5.35			$	5.58			$	5.60			$	5.62			$	5.66
		Three Months Ended
		Dec. 31,				Sept. 30,				June 30,				Mar. 31,				Dec. 31,
		2010				2010				2010				2010				2009
		(in thousands)
Total non-interest income		$	(720	)		$	12,167			$	20,760			$	14,629			$	4,269
Less:
Mark-to-market (losses) gains, net			(6,710	)			(210	)			6,250				301				(1,874	)
Securities impairment charges			(12	)			-				(1,071	)			(103	)			(1,748	)
Gains on sales of investment securities, net			-				5,460				6,079				8,218				167
Gain on extinguishment of debt			-				-				3,000				-				-
Gain on sale of subsidiary			-				568				-				-				54
Total operating non-interest income			6,002				6,349				6,502				6,213				7,670
Add: net interest income			60,911				59,468				57,456				54,718				51,788
Net revenue (4)		$	66,913			$	65,817			$	63,958			$	60,931			$	59,458
Total non-interest expense		$	56,545			$	46,109			$	53,262			$	40,843			$	51,320
Less:
Net loss (gain) on sales/valuations of repossessed assets			12,991				4,855				11,994				(1,014	)			5,081
Merger related			1,651				-				-				-				-
Goodwill impairment			-				-				-				-				4,095
Total operating non-interest expense (4)		$	41,903			$	41,254			$	41,268			$	41,857			$	42,144
Net revenue		$	66,913			$	65,817			$	63,958			$	60,931			$	59,458
Less:
Operating non-interest expense			41,903				41,254				41,268				41,857				42,144
Pre-tax, pre-provision operating earnings (5)		$	25,010			$	24,563			$	22,690			$	19,074			$	17,314
Western Alliance Bancorporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited)
		Three Months Ended
		Dec. 31,				Sept. 30,				June 30,				Mar. 31,				Dec. 31,
		2010				2010				2010				2010				2009
		(in thousands)
Total operating non-interest expense		$	41,903			$	41,254			$	41,268			$	41,857			$	42,144
Divided by:
Total net interest income		$	60,911			$	59,468			$	57,456			$	54,718			$	51,788
Add:
Tax equivalent interest adjustment			464				307				149				244				265
Operating non-interest income			6,002				6,349				6,502				6,213				7,670
		$	67,377			$	66,124			$	64,107			$	61,175			$	59,723
Efficiency ratio - tax equivalent basis (6)			62.2	%			62.4	%			64.4	%			68.4	%			70.6	%
		Three Months Ended
		Dec. 31,				Dec. 31,
		2010				2009
		(in thousands)
Stockholders' equity		$	602,174			$	575,725
Less:
Accumulated other comprehensive (loss) income			(9,422	)			5,405
Non-qualifying goodwill and intangibles			35,269				37,900
Other non-qualifying assets			25,730				25,115
Add:
Qualifying trust preferred securities			41,037				40,441
Tier 1 capital (regulatory) (7)			591,634				547,746
Less:
Qualifying non-controlling interests			214				137
Qualifying trust preferred securities			41,037				40,441
Preferred stock			130,827				127,248
Estimated Tier 1 common equity (8)		$	419,556			$	379,920
Divided by:
Estimated risk-weighted assets (regulatory) (8)		$	4,940,918			$	4,633,541
Tier 1 common equity ratio (8)			8.5	%			8.2	%
		Dec. 31,				Dec. 31,
		2010				2009
		(in thousands)
Classified assets		$	366,915			$	485,911
Divide:
Tier 1 capital (regulatory) (7)			591,634				547,746
Plus: Allowance for credit losses			110,699				108,623
Total Tier 1 capital plus allowance for credit losses		$	702,333			$	656,369
Classified assets to Tier 1 capital plus allowance (9)			52	%			74	%
(1) We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.
(2) We believe this non-GAAP ratio provides critical metrics with which to analyze and evaluate financial condition and capital strength.
(3) We believe this non-GAAP ratio improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.
(4) We believe this non-GAAP measurement is better indicative of the cash generating capacity of the Company.
(5) We believe this non-GAAP measurement is a key indicator of the earnings power of the Company which is otherwise obscured by the asset quality issues.
(6) We believe this non-GAAP ratio provides understanding of the operating efficiency of the Company.
(7) Under the guidelines of the Federal Reserve and the FDIC in effect at December 31, 2010, Tier 1 capital consisted of common stock, retained earnings, non-cumulative perpetual preferred stock, trust preferred securities up to a certain limit, and minority interests in certain subsidiaries, less most other intangible assets.
(8) Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a bank's balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk weighting assigned to that category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is also divided by the risk-weighted assets to determine the Tier 1 common equity ratio. We believe this non-GAAP ratio provides a critical metric with which to analyze and evaluate financial condition and capital strength.
(9) We believe this non-GAAP ratio provides a critical regulatory metric in which to analyze asset quality.

Western Alliance Bancorporation
Dale Gibbons, 602-952-5476
CFO