Q&A with Dale Gibbons, Vice Chairman and CFO
I think the most important metric about Western Alliance is not necessarily in the numbers – it’s our repeat business with our clients. If they are repeat clients it means we’re offering them a value proposition. And we have one of the highest levels of repeat business in the industry.
Our value proposition is our business acumen, our responsiveness and our ability to structure our services to meet our clients’ needs. It’s the engagement of our people in helping customers succeed. They stick with us and we are there for them, in the good times and the very challenging times. We were lending throughout the last recession when many banks were not.
Our financial performance is how the story ends. I like to look upstream to see what’s really going on in the business. We have leading organic growth. How many meetings did our professionals have with clients? How many loan proposals did we develop? How many clients are we helping with treasury services? It’s not only the numbers, it’s what’s behind the numbers. It’s not the what, it’s the why.
To paraphrase Newton’s first law, an object in motion stays in motion. We’re not at rest. We’re engaging with clients, we’re enhancing our products, services and digital delivery. Our loans were up 17% for the year, about $2.6 billion, and up nearly $1 billion in the fourth quarter alone. We have significant momentum.
While the rising rate environment we’ve experienced the past couple of years has helped depositors, it also increased the required performance for some business initiatives to pencil out. As we enter a period of relative interest rate stability, it may result in business plans being more predictable. At Western Alliance, we have the tools to assist our clients with their financial needs and goals, and can structure fixed rate or variable rate loans, depending on what’s right for their business.
We maintain flexibility to be able to respond to changing economic conditions – most likely we will be operating within a continued expansion, but at a more measured pace. What helps Western Alliance is not relying on one set of tools to execute our business plan. Our multiple business lines have different demand generators. If the economy cools, this might bode well for the housing sector as the yield curve is likely to be less steep. If the economy doesn’t slow, commercial loan demand is likely to remain strong.