Western Alliance Bank Community Reinvestment Act Strategic Plan
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Western Alliance Bank Community Reinvestment Act Strategic Plan 2021‐2023 Table of Contents SECTION I. INTRODUCTION................................................................................................................................... 2 A. DESCRIPTION OF WESTERN ALLIANCE BANK ................................................................................................................. 2 B. Assessment Areas………………………………………………………………………………………………………………………………………...4 C. Western Alliance Bank’s Unique Business Model ……………………………………………………………………………….4 D. Western Alliance Bank’s Capacity Assessment……………………………………………………………………….…………………....4 E. Competition……………………………………………………………………………………………………………………………………………..…..5 SECTION II.PRE‐COVID 19 ECONOMIC FACTORS ................................................................................................... 6 A. Labor Market …………………………………………………………………………………………………………………….………………………...6 B. Housing Market ………………………………………………………………………………………………………………….……………………..…6 C. Small Business Credit Assessment …………………………………………………………………………………….………………..………..7 SECTION III. COMMUNITY NEEDS ……………………………………………………………………………………………….……………………...…..8 A. Market Conditions and Competition …………………………………………………………………………………………………….....….8 B. 2020 Update …………………………………………………………………………………………………………………………………….………....9 SECTION IV. WESTERN ALLIANCE BANK’S CRA STRATEGIC PLAN …………………………………………………………………………10 A. Overall Goal ……………………………………………………………………………………………………………………………………………….10 B. Effective Date ………………………………………………………………………………………………………………………………………...….10 C. Term ……. …………………………………………………………………………………………………………………………………………….…….10 D. Plan Focus ……………………………………………………………………………………………………………………………………….…………10 SECTION V. METHODOLOGY ………………………………………………………………………………………………………………..……….… 12 A. CRA Historical Performance …………………………………………………………………………………………………………………..….12 B. Measurement ……………………………………………………………………………………………………………………..………………….…12 C. Review of Other Strategic Plans and Performance Evaluations ……………………………………………………..………..…13 D. Informal Public Discussions ……………………………………………………………………………………………………………………....14 SECTION VI. PERFORMANCE GOALS and STANDARDS for 2021‐2023 …………………………………………………………….……16 A. Goal One: Small Business Lending ………..………………………………………………………………………………………………...….16 B. Goal Two Percentage Loans Made to Businesses with GAR of $1M or Less………………. …….……………………..... 18 C. Goal Three: Community Development Investments/Loans …………………………………….……………………………….….20 D. Goal Four: Donations…………………………………………………………………………………………………………………………………..22 E. Goal Five: Service Hours ……………………………………………………….………………………………………………………....…….….24 SECTION VII: PUBLIC NOTICE...................................................................................................................................... 25 Appendix I: Assessment Area Goals APPENDIX II: Assessment Area Demographics APPENDIX III: Census Tracts APPENDIX IV: Legal Notice Publications Western Alliance Bank CRA Strategic Plan 2021-2023 1 SECTION I: INTRODUCTION Congress adopted the Community Reinvestment Act of (CRA) in 1977 to ensure depository institutions meet the credit needs of the communities in which they operate, including low and moderate income neighborhoods. Subsequently, Congress amended the CRA to allow banks to have CRA performance evaluated pursuant to an approved strategic plan. The strategic plan option enables a bank to customize its CRA goals and objectives to its community and establish target performance aligned with the bank’s business strategy and operational capabilities. Western Alliance Bank (Bank) has elected to have the Bank’s CRA performance assessed pursuant to a CRA Strategic Plan (Plan), thereby leveraging the strengths of its unique business model to achieve meaningful impact. The Bank’s focus on commercial loans, limited branch network, national business lines, and lack of significant mortgage origination capabilities make the Plan the best option to ensure the Bank’s activities continue to meet the needs of the communities in which it operates. The Plan allows the Bank to target the areas of affordable housing, job creation, workforce development, and community development to support low and moderate‐income communities, small businesses and non‐profit organizations in its assessment areas. The Plan contained herein covers the period from January 1, 2021 to December 31, 2023. As presented below, the Plan represents a framework for how the Bank will meet the needs of the community, during the three‐year Plan cycle. In preparing the Plan, the Bank reviewed regulator approved CRA strategic plans adopted by financial institutions throughout the country, completed an economic analysis and needs assessment in its own communities, and held multiple informal discussions with community stakeholders. A. Description of Western Alliance Bank Western Alliance Bank, with $26.9 billion in total assets as of December 31, 2019, is wholly owned by, and the principal subsidiary of Western Alliance Bancorporation (WAL), and is headquartered in Phoenix, Arizona. The Bank operates two distinct business models: (1) regional divisions with a small branch network and focused on commercial relationships in those markets; and (2) national business lines (NBL) offering specialized banking products. The regional business operates in Arizona, Nevada, and California under distinct tradenames: Alliance Bank of Arizona, Bank of Nevada, First Independent Bank, Bridge Bank and Torrey Pines Bank. The Bank designed the Plan to concentrate its CRA activities in the communities where it has a physical presence, and where the majority of the Bank’s employees live and work. Through its NBLs, the Bank provides specialized services to niche markets throughout the country. NBLs are centrally managed, and include the following groups: Alliance Association Bank (HOA banking), Equity Fund Resources, Life Sciences Group, Hotel Franchise Finance, Mortgage Warehouse Lending, Public and Nonprofit Finance, Equipment Finance, Resort Finance, Renewable Energy Resource Group, Technology Finance, Gaming Finance, Business Escrow Services, and Settlement Services. The NBLs do not maintain their own branch network, and all deposit taking and credit decisions occur within the Bank’s divisional footprint. WAB concentrates its lending activities on commercial banking services to businesses. Commercial loan products include commercial construction loans, multifamily loans, business credit cards, commercial lines of credit, equipment and working capital credit facilities. The Bank also provides treasury management solutions, and international products and services that are well suited for commercial customers. Western Alliance Bank CRA Strategic Plan 2021-2023 2 The Bank originates a small number of consumer loans to accommodate existing business customers, including home equity loans and lines of credit, consumer lines of credit, and automobile loans. In 2017, the Bank began a residential mortgage purchase program (RMPP) managed by the Mortgage Warehouse Lending team as a way to diversify the Bank’s overall loan portfolio. Consequently, although the Bank originates a very small number of loans secured by residential real estate, the Bank’s portfolio includes a sizable number of purchased loans secured by 1‐4 family residential real estate. The purchased mortgage loans include mortgages that are not readily sold in the secondary market, the sale of which frees up mortgage bankers to make more loans. The table below represents the Bank’s loan portfolio as of December 31, 2019, and reflects the Bank’s focus on commercial, industrial and commercial real estate loans. All other loans primarily consisted of loans to non‐depository financial institutions ($2.2 Billion) and municipal financing ($1.6 Billion). Loan and Leases as of 12‐31‐2019 Loan Type 000 Percent Commercial/Industrial & Non‐Farm Non‐Residential Real Estate $12,272,938 58.1 All Other $4,554,913 21.6 Construction & Land Development $1,904,904 9.0 Secured by 1‐4 Family Residential Real Estate $2,147,664 10.2 Multi‐Family Residential Real Estate $221,416 1.0 Consumer Loans & Credit Cards $10,982 0.1 Farm Land & Agriculture $10,478 0.0 Total (Gross) $21,123,295 100.0 The Bank makes various deposit products available, including checking, savings, and time deposit accounts for consumer and business customers. In partnership with non‐profit organizations, the Bank offers individual development accounts (IDA), a no‐fee savings account with minimum opening deposit requirements that allows low and moderate‐income individuals to save towards a purchase of a home, education, or to start a business. The Bank has limited branch traffic, and offers alternative delivery services through mobile, internet banking and remote capture deposit. A significant portion of the Bank’s services and products take place remotely. As of December 31, 2019, WAB operated 38 branches in three states ‐ 10 in Arizona located in Coconino, Maricopa, and Pima counties; 16 in Nevada located in Clark, Carson City, Churchill, and Washoe counties; and 12 in California located in the San Francisco‐Oakland‐Hayward MSA , Los Angeles City, San Diego and Santa Clara counties. In addition, Bridge Bank, a division of Western Alliance Bank, operates ten loan production offices ‐ four in California located in the cities of Costa Mesa, Menlo Park, Pleasanton, and San Francisco; one in Boston, Massachusetts; one in Raleigh‐Durham, North Carolina; one in New York, New York; one in Atlanta, Georgia; and one in Reston, Virginia and