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Western Alliance Bancorporation (NYSE:WAL), a $8.5 billion market cap financial institution currently trading at an attractive valuation according to InvestingPro’s Fair Value model, has completed the sale of a new series of preferred stock, according to a recent SEC filing. On Thursday, the company announced the issuance and sale of 300,000 shares of its 9.500% Fixed-Rate Reset Non-Cumulative Exchangeable Perpetual Series B Preferred Stock, with a liquidation preference of $1,000 per share.
The transaction was part of an agreement with J.P. Morgan Securities LLC and MUFG Securities Americas Inc., acting as the initial purchasers. The sale was conducted under the terms of a Purchase Agreement dated March 24, 2025, and the preferred stock was issued on March 27, 2025. With the company’s stock showing a strong 26.9% return over the past year, this capital raise comes at a strategic time. InvestingPro subscribers can access 8 additional key insights about Western Alliance’s financial position and growth prospects.
The newly issued Series B Preferred Stock is subject to certain conditions outlined in a Certificate of Designation filed with the State of Nevada on March 25, 2025. These conditions restrict Western Alliance’s ability to pay dividends or make distributions on its common stock or other junior or parity stock unless dividends on the Series B Preferred Stock for the preceding period have been paid or set aside.
The Series B Preferred Stock may be redeemed by Western Alliance, at its option and subject to regulatory approval, on any dividend payment date on or after March 30, 2030, or in specific circumstances such as a change in regulatory capital treatment. Furthermore, the stock is automatically exchangeable for Series A Preferred Stock of Western Alliance Bank under certain conditions, as directed by federal regulatory authorities.
Holders of the Series B Preferred Stock have limited voting rights, mainly concerning amendments to the company’s certificate of incorporation that negatively affect their interests.
The offering of the Series B Preferred Stock was made pursuant to exemptions from registration under the Securities Act of 1933, following Rule 144A and Regulation S. The joint bookrunning managers for the offering included J.P. Morgan Securities LLC, MUFG Securities Americas Inc., and Keefe, Bruyette & Woods, Inc.
This financial move is part of Western Alliance Bancorporation’s broader strategy to manage its capital and liquidity, particularly notable as the bank maintains a P/E ratio of 11.0 and offers a dividend yield of 1.9%. Investors should note that the company’s next earnings report is scheduled for April 17, 2025. The information in this article is based on the company’s SEC filing and InvestingPro data, where subscribers can access the comprehensive Pro Research Report covering Western Alliance’s complete financial analysis.
In other recent news, Western Alliance Bancorporation reported its fourth-quarter 2024 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $1.95, compared to the forecasted $1.91. The company’s revenue also surpassed projections, reaching $838.4 million against an expected $805.14 million. Additionally, Western Alliance announced a quarterly cash dividend of $0.38 per share on common stock, payable on February 28, 2025, to shareholders of record as of February 14, 2025. In terms of credit ratings, Moody’s upgraded the ratings of Western Alliance Bancorporation and its subsidiaries, reflecting improvements in the company’s financial strategy and risk management. Fitch Ratings also upgraded the Long-Term Issuer Default Ratings of Western Alliance Bancorporation and its operating company, Western Alliance Bank, to ’BBB’ from ’BBB-’, citing improved capital and funding profiles. The rating agency noted the company’s focus on cultivating deeper customer relationships and enhancing its deposit and lending profiles. Despite these upgrades, Western Alliance continues to face credit risks, particularly due to its significant concentration in commercial real estate loans.
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