Russ Wiles

The Republic | azcentral.com

Phoenix-based Western Alliance Bancorporation closed on a hotel-loan portfolio for $1.4 billion

The acquisition from GE Capital will transfer 35 workers from Scottsdale to downtown Phoenix

Western Alliance also reported a more than 50-percent jump in profit for the first quarter of 2016

The $1.4-billion purchase of a hotel-loan portfolio, which closed April 20, keeps Western Alliance Bancorporation solidly on an acquisition path.

The Phoenix-based parent of Alliance Bank of Arizona had agreed to buy the mortgage-loan portfolio of GE Capital in late March. The deal will transfer roughly 35 members of GE Capital's team from a Scottsdale office to the bank's headquarters in downtown Phoenix.

The loans financed the construction of various mid-range hotels such as Courtyard by Marriott, Holiday Inn Express and Hampton Inn, said Robert Sarver, chairman and CEO of Western Alliance.

He said the deal marked the largest acquisition of a business line by Western Alliance, which also has purchased some small banks and other financial entities in recent years.

Separately, Western Alliance reported a more than 50-percent jump in profit on sharply higher revenue for the first quarter ending March 31.

The company said it earned $61.3 million, or 60 cents a share, on operating revenue of $157.8 million, compared with a profit of $40.4 million, or 45 cents a share, on revenue of $108.8 million one year earlier. Rising loan balances and lower nonperforming loans were among the factors contributing to higher profitability. Also, Western Alliance realized a higher interest-rate spread on what it earns from loans compared to what it pays on deposits.

Western Alliance stock closed Friday at $36.61, up 5 cents a share.

In an interview, Sarver said he views the overall business climate as "stable" and reasonably strong following a recession scare at the start of the year. "We try to be opportunistic," he said of the GE Capital deal.

GE Capital's involvement in hotel loans stems from the company's purchase of Franchise Finance Corp. of America 15 years ago. Sarver said the hotel-financing unit features "exceptional underwriting and credit-management strength."

The hotel-loan acquisition from GE Capital will add to Western Alliance's employment growth. The Phoenix company reported 1,464 employees at the end of March, roughly two-thirds in Arizona, up from 1,131 one year earlier. Western Alliance recently was recognized by Forbes on its “Best Banks in America” list for 2016.

Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.