Friday, April 29, 2005 | 11:14 a.m.
Las Vegas-based Western Alliance Bancorporation has filed with the Securities and Exchange Commission for an initial public stock offering.
Western Alliance is the parent company of BankWest of Nevada, which has five branches in the Las Vegas Valley. In the most recent market share information from the Federal Deposit Insurance Corp., which is based on totals as of June 30, 2004, BankWest had $1.25 billion in Clark County deposits.
Based on those levels, BankWest was the fourth-largest local bank behind only Bank of America, Wells Fargo Bank and Nevada State Bank.
If the offering is completed, Western Alliance will be the third Las Vegas-based bank to make a public offering in the past year, joining Valley Bancorp and Community Bancorp.
Valley Bancorp opened trading on Sept. 23 at $23.50, and was trading at $26.10 this morning. The shares have traded as high as $45.
Community Bank of Nevada opened trading on Dec. 16 at $30 a share. It was trading at $24.25 this morning. Shares have traded as high as $33.
The company's SEC filing, which was made Thursday, said BankWest had $1.6 billion in assets, $790.3 million in loans and $1.3 billion in deposits as of December 31, 2004.
Additionally, the filing indicated that BankWest plans to open "five full-service offices and a 36,000-square-foot service center facility in the Las Vegas metropolitan area in the next 18 months."
In 2003, the company opened Alliance Bank of Arizona, which has branches in Phoenix, Scottsdale and Tucson, and Torrey Pines Bank which has branches in San Diego and neighboring La Mesa.
Companywide, Western Alliance reports $2.2 billion in assets, $1.2 billion in total loans and $1.8 billion in deposits.
The filing did not indicate the number of shares to be issued, an offering price or estimate the net proceeds of the offering. It did indicate that a portion of the proceeds will be used "to increase the bank's capital levels to support growth."
"The remaining amount will be used for general corporate purposes, including but not limited to the formation of additional de novo banks in new market areas, acquisitions of other commercial banks or financial services companies and the development of additional products or services," the filing said.
Among the risk factors listed in the SEC filing was the company's reliance on the tourism-dominated Las Vegas market.
"Our business is currently concentrated in the Las Vegas metropolitan area," the filing said. " The economy of the Las Vegas metropolitan area is unique in the United States for its level of dependence on services and industries related to gaming and tourism. Any event that negatively impacts the gaming or tourism industry will adversely impact the Las Vegas economy.
"Virtually any development or event that could dissuade travel or spending related to gaming and tourism, whether inside or outside of Las Vegas, could adversely affect the Las Vegas economy. In this regard, the Las Vegas economy is more susceptible than the economies of other cities to issues such as higher gasoline and other fuel prices, increased air fares, unemployment levels, recession, rising interest rates, and other economic conditions, whether domestic or foreign."
The company also said it could have trouble keep up its torrid pace of growth.
"If we are unable to effectively execute on our strategy, we may not be able to continue to grow a tour historical rates," the documents said. "In particular, Alliance Bank of Arizona and Torrey Pines Bank have achieved unusually high annual rates of growth as compared to other recently opened de novo banks. We do not expect this high level of growth at Alliance Bank of Arizona and Torrey Pines Bank to continue in the future."
Western Alliance also pointed to its high concentration of real estate loans.
"Commercial real estate, construction and land development and commercial and industrial loans, which comprised 88.7 percent of our total loan portfolio as of December 31, 2004, expose us to a greater risk of loss than our residential real estate and consumer loans, which comprised 11.3 percent of our total loan portfolio as of December 31, 2004," the filing said.
"Commercial real estate and land development loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential loans," the documents continued. "Consequently, an adverse development with respect to one commercial loan or one credit relationship may expose us to a significantly greater risk of loss compared to an adverse development with respect to one residential mortgage loan."
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