WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated
under the laws of the state of Delaware. WAL provides a full spectrum of deposit,
lending, treasury management, and online banking products and services through
its wholly-owned banking subsidiary, WAB. On June 30, 2015, WAL acquired Bridge
Capital Holdings and its wholly-owned subsidiary, Bridge Bank. Upon acquisition,
Bridge Capital Holdings merged into WAL and its principal operating subsidiary,
Bridge Bank, merged into WAB. Effective as of July 1, 2015, the existing Bridge
offices and the two previously existing WAB northern California offices are
operating as a combined division, with their results reported under the Companys
Northern California operating segment.
WAB operates the following full-service banking divisions: ABA in Arizona,
BON in Southern Nevada, Bridge in Northern California, FIB in Northern Nevada,
and TPB in Southern California. The Company also serves business customers through
a national platform of specialized financial services including AAB, Corporate
Finance, Equity Fund Resources, Life Sciences Group, Mortgage Warehouse Lending,
Public Finance, Renewable Energy Group, Resort Finance, and Technology Finance.
In addition, the Company has one non-bank subsidiary, LVSP, which holds and
manages certain non-performing loans and OREO.
Through WAB and its banking divisions and operating subsidiaries, the Company
provides a variety of financial services to customers, including CRE loans,
construction and land development loans, commercial loans, and consumer loans.
The Company’s lending has focused primarily on meeting the needs of business
customers.
The Company adheres to a specific set of credit standards within its banking
subsidiary that are intended to ensure the proper management of credit risk.
Furthermore, the Banks senior management team plays an active role in monitoring
compliance with such standards.
Loan originations are subject to a process that includes the credit evaluation
of borrowers, utilizing established lending limits, analysis of collateral,
and procedures for continual monitoring and identification of credit deterioration.
Loan officers actively monitor their individual credit relationships in order
to report suspected risks and potential downgrades as early as possible. The
WAB BOD approves all changes to loan policy, as well as lending limit authorities.
Our lending policies generally incorporate consistent underwriting standards
across all geographic regions that the Bank operates in, customized as necessary
to conform to state law and local market conditions. Our credit culture has
enabled us to identify troubled credits early, allowing us to take corrective
action when necessary.
To measure asset quality, the Company has instituted a loan grading system
consisting of nine different categories. The first five are considered “satisfactory.”
The other four grades range from a “special mention” category to
a “loss” category and are consistent with the grading systems used
by Federal banking regulators. All loans are assigned a credit risk grade at
the time they are made, and each assigned loan officer reviews the credit with
his or her immediate supervisor on a quarterly basis to determine whether a
change in the credit risk grade is warranted. In addition, the grading of our
loan portfolio is reviewed on a regular basis by our internal Loan Review Department.
The Company offers a variety of deposit products, including checking accounts,
savings accounts, money market accounts, and other types of deposit accounts,
including fixed-rate, fixed maturity certificates of deposit. The Company has
historically focused on growing its lower cost core customer deposits.
The competition for deposits in our markets is strong. The Company has historically
been successful in attracting and retaining deposits due to several factors,
including: 1) our high quality of customer service; 2) our experienced relationship
bankers who have strong relationships within their communities; 3) the broad
selection of cash management services we offer; and 4) incentives to employees
for business development and retention. The Company intends to continue its
focus on attracting deposits from our business lending relationships in order
to maintain our low cost of funds and improve our net interest margin. The loss
of low-cost deposits could negatively impact future profitability.
