10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2005

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition period from                      to                     

Commission File Number: 0001-32550

WESTERN ALLIANCE BANCORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Nevada	88-0365922
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer I.D. Number)

2700 W. Sahara Avenue, Las Vegas, NV	89102
(Address of Principal Executive Offices)	(Zip Code)

(702) 248-4200

Registrant’s telephone number, including area code

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Common Stock, $0.0001 Par Value
(Title of Class)

New York Stock Exchange
(Name of each exchange on which registered)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No þ

The aggregate market value of the registrant’s voting stock held by non-affiliates is approximately $278,096,100, based on the June 30, 2005 closing price of said stock on the New York Stock Exchange ($25.40 per share).

As of February 28, 2006, 23,020,078 shares of the registrant’s common stock were outstanding.

Parts I and II of this Form 10-K incorporate by reference information from the registrant’s annual report to shareholders for the year ended December 31, 2005. Portions of the registrant’s definitive Proxy Statement for its 2006 Annual Meeting of Stockholders and Annual Report to Shareholders are incorporated by reference into Part III of this report.

2

TABLE OF CONTENTS

		Page Number
PART I
Item 1	Business		4
Item 1A	Risk Factors		26
Item 1B	Unresolved Staff Comments		33
Item 2	Properties		33
Item 3	Legal Proceedings		34
Item 4	Submission of Matters to a Vote of Security Holders		34
PART II
Item 5	Market for Registrant’s Common Equity and Related Stockholder Matters		34
Item 6	Selected Financial Data		34
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		35
Item 8	Financial Statements and Supplementary Data		35
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		35
Item 9A	Controls and Procedures		35
Item 9B	Other Information		35
PART III
Item 10	Directors and Executive Officers of the Registrant		35
Item 11	Executive Compensation		36
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		36
Item 13	Certain Relationships and Related Transactions		36
Item 14	Principal Accountant Fees and Services		36
PART IV
Item 15	Exhibits and Financial Statement Schedules		36
Signatures
Exhibit 13.1
Exhibit 14.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32

3

PART I

ITEM 1. BUSINESS

WHERE YOU CAN FIND MORE INFORMATION

     Under the Securities Exchange Act of 1934 Sections 13 and 15(d), periodic and current reports must be filed with the SEC. We electronically file the following reports with the SEC: Form 10-K (Annual Report), Form 10-Q (Quarterly Report), Form 8-K (Current Report), and Form DEF 14A (Proxy Statement). We may file additional forms. You may read and copy any materials we have filed with the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, DC 20549, and you may obtain information on the operation of the Public Reference Room by calling the SEC in the U.S. at 1-800-SEC-0330. In addition, the SEC maintains an Internet website, www.sec.gov, that contains reports, proxy and information statements and other information that we file electronically with the SEC. Additionally, all forms filed with the SEC and additional shareholder information is available free of charge on our website: www.westernalliancebancorp.com. We post these reports to our website as soon as reasonably practicable after filing them with the SEC. None of the information on or hyperlinked from our website is incorporated into this Report.

Western Alliance Bancorporation

     We are a bank holding company headquartered in Las Vegas, Nevada. We provide a full range of banking and related services to locally owned businesses, professional firms, real estate developers and investors, local non-profit organizations, high net worth individuals and other consumers through our subsidiary banks and financial services companies located in Nevada, Arizona and California. On a consolidated basis, as of December 31, 2005, we had approximately $2.9 billion in assets, $1.8 billion in total loans, $2.4 billion in deposits and $244.2 million in stockholders’ equity. We have focused our lending activities primarily on commercial loans, which comprised 83.7% of our total loan portfolio at December 31, 2005. In addition to traditional lending and deposit gathering capabilities, we also offer a broad array of financial products and services aimed at satisfying the needs of small to mid-sized businesses and their proprietors, including cash management, trust administration and estate planning, custody and investments and equipment leasing.

     BankWest of Nevada was founded in 1994 by a group of individuals with extensive community banking experience in the Las Vegas market. We believe our success has been built on the strength of our management team, our conservative credit culture, the attractive growth characteristics of the markets in which we operate and our ability to expand our franchise by attracting seasoned bankers with long-standing relationships in their communities.

     In 2003, with the support of local banking veterans, we opened Alliance Bank of Arizona in Phoenix, Arizona and Torrey Pines Bank in San Diego, California. Over the past two and a half years we have successfully leveraged the expertise and strengths of Western Alliance and BankWest of Nevada to build and expand these new banks in a rapid and efficient manner.

     Through our wholly owned, non-bank subsidiaries, Miller/Russell & Associates, Inc. and Premier Trust, Inc., we provide investment advisory and wealth management services, including trust administration and estate planning. We acquired Miller/Russell and Premier Trust in May 2004 and December 2003, respectively. As of December 31, 2005, Miller/Russell had $1.11 billion in assets under management, and Premier Trust had $132 million in assets under management and $296 million in total trust assets.

     We have achieved significant growth. Specifically, from December 31, 2000 to December 31, 2005, we increased:

• total assets from $443.7 million to $2.9 billion;

• total net loans from $319.6 million to $1.8 billion;

• total deposits from $410.2 million to $2.4 billion; and

4

• core deposits (all deposits other than certificates of deposit greater than $100,000) from $355.8 million to $2.1 billion.

     Our executive offices are at 2700 West Sahara Avenue, Las Vegas, Nevada 89102, and our telephone number is (702) 248-4200.

Recent Developments

     Acquisition of Intermountain First Bancorp and Nevada First Bank. On December 30, 2005, Western Alliance and Intermountain First Bancorp, a Nevada corporation and the holding company for Nevada First Bank, entered into a definitive merger agreement, pursuant to which Intermountain will merge with and into Western Alliance. Under the terms of the agreement, Intermountain shareholders may elect to receive either 2.44 shares of Western Alliance common stock or $71.30 in cash for each Intermountain share, subject to proration and allocation procedures to ensure a tax-free merger. The transaction is valued at approximately $110 million. The transaction, which is subject to customary closing conditions, including approval from the shareholders of Intermountain and banking regulators, is expected to be completed in the second quarter of 2006.

     Acquisition of Bank of Nevada. On January 16, 2006, Western Alliance and Bank of Nevada, a Nevada-chartered bank, entered into a definitive merger agreement, pursuant to which Bank of Nevada will merge with and into BankWest of Nevada, a wholly owned subsidiary of Western Alliance. Under the terms of the agreement, Bank of Nevada shareholders will receive $80.187 in cash for each share of Bank of Nevada common stock. Following completion of the merger, BankWest of Nevada will be renamed Bank of Nevada. The transaction is valued at approximately $74 million. The transaction, which is subject to customary closing conditions, including approval from the shareholders of Bank of Nevada and banking regulators, is expected to be completed in the second quarter of 2006.

     Acquisition of Office Building. On December 30, 2005, BankWest of Nevada acquired an office building located at 2700 West Sahara Avenue, Las Vegas, Nevada, for a purchase price of $16,300,000. The property, which had previously been leased by BankWest of Nevada, serves as the corporate headquarters for Western Alliance and BankWest of Nevada.

Our Strategy

     Since 1994, we believe that we have been successful in building and developing our operations by adhering to a business strategy focused on understanding and serving the needs of our local clients and pursuing growth markets and opportunities while emphasizing a strong credit culture. Our objective is to provide our shareholders with superior returns. The critical components of our strategy include:

• Leveraging our knowledge and expertise. Over the past decade we have assembled an experienced management team and built a culture committed to credit quality and operational efficiency. We have also successfully centralized at our holding company level a significant portion of our operations, processing, compliance, Community Reinvestment Act administration and specialty functions. We intend to grow our franchise and improve our operating efficiencies by continuing to leverage our managerial expertise and the functions we have centralized at Western Alliance.

• Maintaining a strong credit culture. We adhere to a specific set of credit standards across our bank subsidiaries that ensure the proper management of credit risk. Western Alliance’s management team plays an active role in monitoring compliance with our Banks’ credit standards. Western Alliance also continually monitors each of our subsidiary banks’ loan portfolios, which enables us to identify and take prompt corrective action on potentially problematic loans.

• Attracting seasoned relationship bankers and leveraging our local market knowledge. We believe our success has been the result, in part, of our ability to attract and retain experienced relationship bankers that have strong relationships in their communities. These professionals bring with them valuable customer relationships, and have been an integral part of our ability to expand rapidly in our market areas. These professionals allow us to be responsive to the needs of our customers and provide a high level of service to local businesses. We intend to continue to hire experienced relationship bankers as we expand our franchise.

5

• Offering a broader array of personal financial products and services. Part of our growth strategy is to offer a broader array of personal financial products and services to high net worth individuals and to senior managers at commercial enterprises with which we have established relationships. To this end, we acquired Miller/Russell & Associates, Inc. in May 2004, and Premier Trust, Inc. in December 2003.

• Focusing on markets with attractive growth prospects. We operate in what we believe to be highly attractive markets with superior growth prospects. Our metropolitan areas have a high per capita income and are expected to experience some of the fastest population growth in the country. We continuously evaluate new markets in the Western United States with similar growth characteristics as targets for expansion. Our long term strategy is to have four to six subsidiary banks each with assets between $500.0 million and $3.0 billion. We intend to implement this strategy through the formation of additional de novo banks or acquiring other commercial banks in new market areas with attractive growth prospects. As of December 31, 2005, we maintained 16 bank branch offices located throughout our market areas. To accommodate our growth and enhance efficiency, we intend to expand over the next 12 months to an aggregate of 24 offices, and to open a service center facility that will provide centralized back-office services and call center support for all our banking subsidiaries.

• Attracting low cost deposits. We believe we have been able to attract a stable base of low-cost deposits from customers who are attracted to our personalized level of service and local knowledge. As of December 31, 2005, our deposit base was comprised of 40.9% non-interest bearing deposits, of which 31.9% consisted of title company deposits, 61.6% consisted of other business deposits and 6.5% consisted of consumer deposits. Given our relatively low loan-to-deposit ratio of 74.9%, we expect to obtain additional value in the future by leveraging our low-cost deposit base to increase quality credit relationships.

Our Market Areas

     We believe that there is a significant market segment of small to mid-sized businesses that are looking for a locally based commercial bank capable of providing a high degree of flexibility and responsiveness, in addition to offering a broad range of financial products and services. We believe that the local community banks that compete in our markets do not offer the same breadth of products and services that our customers require to meet their growing needs, while the large, national banks lack the flexibility and personalized service that our customers desire in their banking relationships. By offering flexibility and responsiveness to our customers and providing a full range of financial products and services, we believe that we can better serve our markets.

     Through our banking and non-banking subsidiaries, we serve customers in Nevada, Arizona and California.

     Nevada. In Nevada, we operate in the cities of Las Vegas and Henderson, both of which are in the Las Vegas metropolitan area. The economy of the Las Vegas metropolitan area is primarily driven by services and industries related to gaming, entertainment and tourism, and is experiencing growth in the residential and commercial construction and light manufacturing sectors.

     Arizona. In Arizona, we operate in Phoenix and Scottsdale, which are located in the Phoenix metropolitan area, and Tucson, which is located in the Tucson metropolitan area. These metropolitan areas contain companies in the following industries: aerospace, high-tech manufacturing, construction, energy, transportation, minerals and mining and financial services.

     California. In California, we operate in the cities of San Diego and La Mesa, both of which are in the San Diego metropolitan area. The business community in the San Diego metropolitan area includes numerous small to medium-sized businesses and service and professional firms that operate in a diverse number of industries, including the entertainment, defense and aerospace, construction, health care and pharmaceutical, and computer and telecommunications industries.

     We currently operate in what we believe to be several of the most attractive markets in the Western United States. These markets have high per capita income and are expected to experience some of the fastest population growth in the country. Claritas, Inc., a leading provider of demographic data, projects significant population growth in our metropolitan areas between 2004 and 2009.

6

     We believe that the rapid population growth and attractive economic factors of our markets will provide us with significant opportunities in the future. The growth in the Las Vegas metropolitan area, our primary market, has been driven by a variety of factors, including a service economy associated with the hospitality and gaming industries, affordable housing, no state income taxation, and a growth base of senior or retirement communities. Increased economic activity by individuals and accelerated infrastructure investments by businesses should generate additional demand for our products and services. For example, economic growth should produce additional commercial and residential development, providing us with greater lending opportunities. In addition, as per capita income continues to rise, there should be greater opportunities to provide financial products and services, such as checking accounts and wealth and asset management services.

Operations

     Our operations are conducted through the following wholly owned subsidiaries:

• BankWest of Nevada. BankWest of Nevada is a Nevada-chartered commercial bank headquartered in Las Vegas, Nevada. BankWest of Nevada opened for business in 1994. As of December 31, 2005, the bank had $1.9 billion in assets, $1.1 billion in loans and $1.6 billion in deposits. BankWest of Nevada has three full-service offices in Las Vegas and two in Henderson.

• Alliance Bank of Arizona. Alliance Bank of Arizona is an Arizona-chartered commercial bank headquartered in Phoenix, Arizona. As of December 31, 2005, the bank had $520.0 million in assets, $404.6 million in loans and $457.2 million in deposits. Alliance Bank has three full-service offices in Phoenix, three in Tucson and one in Scottsdale.

• Torrey Pines Bank. Torrey Pines Bank is a California-chartered commercial bank headquartered in San Diego, California. As of December 31, 2005, the bank had $405.0 million in assets, $305.1 million in loans and $335.3 million in deposits. Torrey Pines has three full-service offices in San Diego and one in La Mesa.

• Miller/Russell & Associates, Inc. Miller/Russell offers investment advisory services to businesses, individuals and non-profit entities. As of December 31, 2005, Miller/Russell had $1.11 billion in assets under management. Miller/Russell has offices in Phoenix, Tucson, San Diego and Las Vegas.

• Premier Trust, Inc. Premier Trust offers clients wealth management services, including trust administration of personal and retirement accounts, estate and financial planning, custody services and investments. As of December 31, 2005, Premier Trust had $296 million in total trust assets and $132 million in assets under management. Premier Trust has offices in Las Vegas and Phoenix.

Lending Activities

     We provide a variety of loans to our customers, including commercial and residential real estate loans, construction and land development loans, commercial loans, and to a lesser extent, consumer loans. Our lending efforts have focused on meeting the needs of our business customers, who have typically required funding for commercial and commercial real estate enterprises. Commercial loans comprised 83.7% of our total loan portfolio at December 31, 2005. We intend to continue expanding our lending activities and have recently begun offering SBA 7(a) loans and equipment leasing.

     Commercial Real Estate Loans. The majority of our lending activity consists of loans to finance the purchase of commercial real estate and loans to finance inventory and working capital that are secured by commercial real estate. We have a commercial real estate portfolio comprised of loans on apartment buildings, professional offices, industrial facilities, retail centers and other commercial properties. As of December 31, 2005, 54.1% of our commercial real estate and construction loans were owner occupied.

     Construction and Land Development Loans. The principal types of our construction loans include industrial/warehouse properties, office buildings, retail centers, medical facilities, restaurants and, on occasion, luxury single-family homes. Construction and land development loans are primarily made only to experienced local developers with whom we have a sufficient lending history. An analysis of each construction project is performed as part of the underwriting process to determine whether the type of property, location, construction costs and contingency funds are appropriate and adequate. We extend raw

7

commercial land loans primarily to borrowers who plan to initiate active development of the property within two years.

     Commercial and Industrial Loans. In addition to real estate related loan products, we also originate commercial and industrial loans, including working capital lines of credit, inventory and accounts receivable lines, equipment loans and other commercial loans. We focus on making commercial loans to small and medium-sized businesses in a wide variety of industries. We also are a “Preferred Lender” in Arizona with the SBA. We intend to increase our commitment to this product line in the future.

     Residential Loans. We originate residential mortgage loans secured by one- to four-family properties, most of which serve as the primary residence of the owner. Our primary focus is to maintain and expand relationships with realtors and other key contacts in the residential real estate industry in order to originate new mortgages. Most of our loan originations result from relationships with existing or past customers, members of our local community, and referrals from realtors, attorneys and builders.

     Consumer Loans. We offer a variety of consumer loans to meet customer demand and to increase the yield on our loan portfolio. Consumer loans are generally offered at a higher rate and shorter term than residential mortgages. Examples of our consumer loans include:

• home equity loans and lines of credit;

• home improvement loans;

• new and used automobile loans; and

• personal lines of credit.

     Currently, we offer credit cards to our customers through an unrelated third party. We recognize nominal fee income under this arrangement. We recently began offering credit cards to be held for our own portfolio.

     As of December 31, 2005 our loan portfolio totaled $1.8 billion, or approximately 63.0% of our total assets. The following tables set forth the composition of our loan portfolio as of December 31, 2005.

	December 31, 2005
Loan Type	Amount			Percent
	($ in millions)
Commercial Real Estate	$	727.2			40.5	%
Construction and Land Development		432.7			24.1
Commercial and Industrial		342.4			19.1
Residential Real Estate		272.9			15.2
Consumer		20.4			1.1
Total Gross Loans	$	1,795.6			100.0	%
Net Deferred Loan Fees		(2.3	)
Gross Loans, net of deferred loan fees	$	1,793.3

Credit Policies and Administration

General

     We adhere to a specific set of credit standards across our bank subsidiaries that ensure the proper management of credit risk. Furthermore, our holding company’s management team plays an active role in monitoring compliance with such standards by our banks.

Loan originations are subject to a process that includes the credit evaluation of borrowers, 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 respective boards of directors of each of our banking subsidiaries establish their own loan policies, as well as loan limit authorizations. Except for variances to reflect unique aspects of state law and local market conditions, our lending policies generally incorporate consistent underwriting standards. We monitor all changes to each respective bank’s loan

8

policy to promote this philosophy. Our credit culture has helped us to identify troubled credits early, allowing us to take corrective action when necessary.

Loan Approval Procedures and Authority

     Our loan approval procedures are executed through a tiered loan limit authorization process which is structured as follows:

• Individual Authorities. The board of directors of each subsidiary bank sets the authorization levels for individual loan officers on a case-by-case basis. Generally, the more experienced a loan officer, the higher the authorization level. The maximum approval authority for a loan officer is $1.5 million for secured loans and $750,000 for unsecured loans.

• Management Loan Committees. Credits in excess of individual loan limits are submitted to the appropriate bank’s Management Loan Committee. The Management Loan Committees consist of members of the senior management team of that bank and are chaired by that bank’s chief credit officer. The Management Loan Committees have approval authority up to $3.0 million at BankWest of Nevada, $5.0 million at Alliance Bank of Arizona and $2.5 million at Torrey Pines Bank.

• Credit Administration. Credits in excess of the Management Loan Committee authority are submitted by the bank subsidiary to Western Alliance’s Credit Administration. Credit Administration consists of the chief credit officers of Western Alliance and BankWest of Nevada. Credit Administration has approval authority up to $18.0 million.

• Board of Director Oversight. The Chairman of the Board of Directors of Western Alliance acting with the Chairman of the Credit Committee has approval authority up to each respective bank’s legal lending limit (approximately $37.0 million for BankWest of Nevada, $7.6 million for Alliance Bank of Arizona, and $9.4 million for Torrey Pines Bank, each as of December 31, 2005).

     Our credit administration department works independent of loan production.

     Loans to One Borrower. In addition to the limits set forth above, state banking law generally limits the amount of funds that a bank may lend to a single borrower. Under Nevada law, the total amount of outstanding loans that a bank may make to a single borrower generally may not exceed 25% of stockholders’ equity. Under Arizona law, the obligations of one borrower to a bank may not exceed 15% of the bank’s capital. Under California law, the obligations of any one borrower to a bank generally may not exceed 25% of the sum of the bank’s shareholders’ equity, allowance for loan losses, capital notes and debentures.

     Notwithstanding the above limits, because of our business model, our affiliate banks are able to leverage their relationships with one another to participate in loans collectively which they otherwise would not be able to accommodate on an individual basis. As of December 31, 2005, the aggregate lending limit of our subsidiary banks was approximately $54.0 million.

     Concentrations of Credit Risk. Our lending policies also establish customer and product concentration limits to control single customer and product exposures. As these policies are directional and not absolute, at any particular point in time the ratios may be higher or lower because of funding on outstanding commitments. Set forth below are our lending policies and the segmentation of our loan portfolio by loan type as of December 31, 2005:

	Percent of Total Capital						Percent of Total Loans
	Policy Limit			Actual			Policy Limit			Actual
Commercial Real Estate — Term		400	%		303	%		65	%		41	%
Construction		250			170			30			24
Commercial and Industrial		200			134			30			19
Residential Real Estate		150			91			65			15
Consumer		50			8			15			1

Asset Quality

General

9

     One of our key strategies is to maintain high asset quality. We have instituted a loan grading system consisting of nine different categories. The first five are considered “satisfactory.” The other four grades range from a “watch” category to a “loss” category and are consistent with the grading systems used by the FDIC. All loans are assigned a credit risk grade at the time they are made, and each originating 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 annually by an external, independent loan review firm.

Collection Procedure

     If a borrower fails to make a scheduled payment on a loan, we attempt to remedy the deficiency by contacting the borrower and seeking payment. Contacts generally are made within 15 business days after the payment becomes past due. Our Special Assets Department reviews all delinquencies on a monthly basis. Each bank’s chief credit officer can approve charge-offs up to $5,000. Amounts in excess of $5,000 require the approval of each bank’s respective board of directors. Loans deemed uncollectible are proposed for charge-off on a monthly basis at each respective bank’s monthly board meeting.

Non-performing Loans

     Our policies require that the chief credit officer of each bank continuously monitor the status of that bank’s loan portfolio and prepare and present to the board of directors a monthly report listing all credits 30 days or more past due. All relationships graded “substandard” or worse typically are transferred to the Special Assets Department for corrective action. In addition, we prepare detailed status reports for all relationships rated “watch” or lower on a quarterly basis. These reports are provided to management and the board of directors of the applicable bank and Western Alliance.

     Our policy is to classify all loans 90 days or more past due and all loans on a non-accrual status as “substandard” or worse, unless extraordinary circumstances suggest otherwise.

     We generally stop accruing income on loans when interest or principal payments are in arrears for 90 days, or earlier if the bank’s management deems appropriate. We designate loans on which we stop accruing income as non-accrual loans and we reverse outstanding interest that we previously credited. We recognize income in the period in which we collect it, when the ultimate collectibility of principal is no longer in doubt. We return non-accrual loans to accrual status when factors indicating doubtful collection no longer exist and the loan has been brought current.

Criticized Assets

     Federal regulations require that each insured bank classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, examiners have authority to identify problem assets, and, if appropriate, classify them. We use grades six through nine of our loan grading system to identify potential problem assets.

     The following describes grades six through nine of our loan grading system:

• “Watch List/Special Mention.” Generally these are assets that require more than normal management attention. These loans may involve borrowers with adverse financial trends, higher debt/equity ratios, or weaker liquidity positions, but not to the degree of being considered a “problem loan” where risk of loss may be apparent. Loans in this category are usually performing as agreed, although there may be some minor non-compliance with financial covenants.

• “Substandard.” These assets contain well-defined credit weaknesses and are characterized by the distinct possibility that the bank will sustain some loss if such weakness or deficiency is not corrected. These loans generally are adequately secured and in the event of a foreclosure action or liquidation, the bank should be protected from loss. All loans 90 days or more past due and all loans on non-accrual are considered at least “substandard,” unless extraordinary circumstances would suggest otherwise.

• “Doubtful.” These assets have an extremely high probability of loss, but because of certain known factors which may work to the advantage and strengthening of the asset (for example, capital

10

	injection, perfecting liens on additional collateral and refinancing plans), classification as an estimated loss is deferred until a more precise status may be determined.
•	“Loss.” These assets are considered uncollectible, and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practicable or desirable to defer writing off the asset, even though partial recovery may be achieved in the future.

Allowance for Loan Losses

     The allowance for loan losses reflects our evaluation of the probable losses in our loan portfolio. Although management at each of our banking subsidiaries establishes its own allowance for loan losses, each bank utilizes consistent evaluation procedures. The allowance for loan losses is maintained at a level that represents each bank’s management’s best estimate of losses in the loan portfolio at the balance sheet date that are both probable and reasonably estimable. We maintain the allowance through provisions for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. Recoveries on loans charged-off are restored to the allowance for loan losses.

     Our evaluation of the adequacy of the allowance for loan losses includes the review of all loans for which the collectibility of principal may not be reasonably assured. For commercial real estate and commercial loans, review of financial performance, payment history and collateral values is conducted on a quarterly basis by the lending staff, and the results of that review are then reviewed by Credit Administration. For residential mortgage and consumer loans, this review primarily considers delinquencies and collateral values.

     The criteria that we consider in connection with determining the overall allowance for loan losses include:

• results of the quarterly credit quality review;

• historical loss experience in each segment of the loan portfolio;

• general economic and business conditions affecting our key lending areas;

• credit quality trends (including trends in non-performing loans expected to result from existing conditions);

• collateral values;

• loan volumes and concentrations;

• age of the loan portfolio;

• specific industry conditions within portfolio segments;

• duration of the current business cycle;

• bank regulatory examination results; and

• external loan review results.

     Additions to the allowance for loan losses may be made when management has identified significant adverse conditions or circumstances related to a specific loan. Management continuously reviews the entire loan portfolio to determine the extent to which additional loan loss provisions might be deemed necessary. However, there can be no assurance that the allowance for loan losses will be adequate to cover all losses that may in fact be realized in the future or that additional provisions for loan losses will not be required.

     Various regulatory agencies, as well as our outsourced loan review function, as an integral part of their review process, periodically review our loan portfolios and the related allowance for loan losses.

11

Regulatory agencies may require us to increase the allowance for loan losses based on their review of information available to them at the time of their examination.

     As of December 31, 2005, our allowance for loan losses was $21.2 million. The allowance coverage to total loans was 1.18% as of December 31, 2005.

Investment Activities

     Each of our banking subsidiaries has its own investment policy, which is established by our board of directors and is approved by each respective bank’s board of directors. These policies dictate that investment decisions will be made based on the safety of the investment, liquidity requirements, potential returns, cash flow targets, and consistency with our interest rate risk management. Each bank’s chief financial officer is responsible for making securities portfolio decisions in accordance with established policies. The chief financial officer has the authority to purchase and sell securities within specified guidelines established by the investment policy. All transactions for a specific bank are reviewed by that bank’s board of directors on a monthly basis.

     Our investment policies generally limit securities investments to U.S. Government, agency and sponsored entity securities and municipal bonds, as well as investments in preferred and common stock of government sponsored entities, such as Fannie Mae, Freddie Mac, and the Federal Home Loan Bank. The policies also permit investments in mortgage-backed securities, including pass-through securities issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, as well as collateralized mortgage obligations (“CMOs”) issued or backed by securities issued by these government agencies and privately issued investment grade CMOs. Privately issued CMOs typically offer higher rates than those paid on government agency CMOs, but lack the guaranty of such agencies and typically there is less market liquidity than agency bonds. The policies also permit investments in securities issued or backed by the SBA. Our current investment strategy uses a risk management approach of diversified investing in fixed-rate securities with short- to intermediate-term maturities. The emphasis of this approach is to increase overall securities yields while managing interest rate risk. To accomplish these objectives, we focus on investments in mortgage-backed securities and CMOs.

     All of our investment securities are classified as “available for sale” or “held to maturity” pursuant to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Available for sale securities are reported at fair value, with unrealized gains and losses excluded from earnings and instead reported as a separate component of stockholders’ equity. Held to maturity securities are those securities that we have both the intent and the ability to hold to maturity. These securities are carried at cost adjusted for amortization of premium and accretion of discount.

     As of December 31, 2005, we had an investment securities portfolio of $748.5 million, representing approximately 23.8% of our total assets, with 100% of the portfolio invested in AAA-rated securities. The average duration of our investment securities is 3.0 years as of December 31, 2005. The following table summarizes our investment securities portfolio as of December 31, 2005.

	December 31, 2005
	Amount		Percent
	($ in millions)
Mortgage-backed Securities	$	519.9		69.5	%
U.S. Government Sponsored Agencies		137.6		18.4
Municipal Bonds, U.S. Treasuries & Other		91.0		12.1
Total Investment Securities	$	748.5		100.0	%

     As of December 31, 2005 and December 31, 2004, we had an investment in BOLI of $51.8 million and $26.2 million, respectively. We purchased the BOLI to help offset employee benefit costs.

Deposit Products and Other Funding Sources

     We offer a variety of deposit products to our customers, including checking accounts, savings accounts, money market accounts and other deposit accounts, including fixed-rate, fixed maturity retail certificates of deposit ranging in terms from 30 days to five years, individual retirement accounts, and non-retail certificates of deposit consisting of jumbo certificates greater than or equal to $100,000. We have

12

historically focused on attracting low cost core deposits. As of December 31, 2005, our deposit portfolio was comprised of 40.9% non- interest bearing deposits, compared to 14.3% time deposits.

     Our non-interest bearing deposits consist of non-interest bearing checking accounts, which, as of December 31, 2005, were comprised of 31.9% title company deposits, which consist primarily of deposits held in escrow pending the closing of commercial and residential real estate transactions, and, to a lesser extent, operating accounts for title companies; 61.6% other business deposits, which consist primarily of operating accounts for businesses; and 6.5% consumer deposits. We consider these deposits to be core deposits. We believe these deposits are generally not interest rate sensitive since these accounts are not created for investment purposes. The competition for these deposits in our markets is strong. We believe our success in attracting and retaining these deposits is based on several factors, including (1) the high level of service we provide to our customers; (2) our ability to attract and retain experienced relationship bankers who have strong relationships in their communities; (3) our broad array of cash management services; and (4) our competitive pricing on earnings credits paid on these deposits. We intend to continue our efforts to attract deposits from our business lending relationships in order to maintain our low cost of funds and improve our net interest margin. However, if we lost a significant part of our low-cost deposit base, it would negatively impact our profitability.

     Deposit flows are significantly influenced by general and local economic conditions, changes in prevailing interest rates, internal pricing decisions and competition. Our deposits are primarily obtained from areas surrounding our branch offices. In order to attract and retain deposits, we rely on providing quality service and introducing new products and services that meet our customers’ needs.

     Each subsidiary bank’s asset and liability committee sets its own deposit rates. Our banks consider a number of factors when determining their individual deposit rates, including:

• Information on current and projected national and local economic conditions and the outlook for interest rates;

• The competitive environment in the markets it operates in;

• Loan and deposit positions and forecasts, including any concentrations in either; and

• FHLB advance rates and rates charged on other sources of funds.

     As of December 31, 2005, we had approximately $2.4 billion in total deposits. The following table shows our deposit composition as of December 31, 2005:

	December 31, 2005
	Amount		Percent
	($ in millions)
Non-interest Bearing Demand	$	980.0		40.9	%
Savings & Money Market		949.6		39.7
Time, $100k and over		316.2		13.2
Interest Bearing Demand		122.3		5.1
Other Time		25.7		1.1
Total Deposits	$	2,393.8		100.0	%

     In addition to our deposit base, we have access to other sources of funding, including FHLB advances, repurchase agreements and unsecured lines of credit with other financial institutions. Additionally, in the past, we have accessed the capital markets through trust preferred offerings.

Financial Products & Services

     In addition to traditional commercial banking activities, we provide other financial services to our customers, including:

• Internet banking;

• Wire transfers;

• Electronic bill payment;

13

• Lock box services;

• Courier services;

• Cash vault; and

• Cash management services (including account reconciliation, collections and sweep accounts).

     We have a service center facility currently under development in the Las Vegas metropolitan area, which we anticipate will become operational in the third quarter of 2006. We expect that this facility, once completed, will increase our capacity to provide courier, cash management and other business services.

     Through Miller/Russell, we provide customers with asset allocation and investment advisory services. In addition, we provide wealth management services including trust administration of personal and retirement accounts, estate and financial planning, custody services and investments through Premier Trust.

Customer, Product and Geographic Concentrations

     Approximately 64.6% of our loan portfolio as of December 31, 2005 consisted of commercial real estate secured loans, including commercial real estate loans and construction and land development loans. Moreover, our business activities are currently focused in the Las Vegas, San Diego, Tucson and Phoenix metropolitan areas. Consequently, our business is dependent on the trends of these regional economies. In addition, approximately 13.1% of our deposits as of December 31, 2005 consisted of title company deposits. No individual or single group of related accounts is considered material in relation to our assets or deposits or in relation to our overall business.

Competition

     The banking and financial services business in our market areas is highly competitive. This increasingly competitive environment is a result primarily of growth in community banks, changes in regulation, changes in technology and product delivery systems, and the accelerating pace of consolidation among financial services providers. We compete for loans, deposits and customers with other commercial banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market funds, credit unions, and other non-bank financial services providers. Many of these competitors are much larger in total assets and capitalization, have greater access to capital markets and offer a broader range of financial services than we can offer.

     Competition for deposit and loan products remains strong from both banking and non-banking firms, and this competition directly affects the rates of those products and the terms on which they are offered to consumers. Technological innovation continues to contribute to greater competition in domestic and international financial services markets. Many customers now expect a choice of several delivery systems and channels, including telephone, mail, home computer and ATMs.

     Mergers between financial institutions have placed additional pressure on banks to consolidate their operations, reduce expenses and increase revenues to remain competitive. In addition, competition has intensified due to federal and state interstate banking laws, which permit banking organizations to expand geographically with fewer restrictions than in the past. These laws allow banks to merge with other banks across state lines, thereby enabling banks to establish or expand banking operations in our market. The competitive environment is also significantly impacted by federal and state legislation that makes it easier for non-bank financial institutions to compete with us.

Employees

     As of December 31, 2005, we had 537 full-time equivalent employees.

Financial Information Regarding Segment Reporting

     We currently operate our business in four operating segments: BankWest of Nevada, Alliance Bank of Arizona, Torrey Pines Bank and Other (Western Alliance, Miller/Russell and Premier Trust). Please refer

14

to Note 18 “Segment Information” to our Consolidated Financial Statements for financial information regarding segment reporting.

SUPERVISION AND REGULATION OF WESTERN ALLIANCE

          The following discussion is only intended to summarize significant statutes and regulations that affect the banking industry and therefore is not a comprehensive survey of the field. These summaries are qualified in their entirety by reference to the particular statute or regulation that is referenced or described. Changes in applicable laws or regulations or in the policies of banking supervisory agencies, or the adoption of new laws or regulations, may have a material effect on Western Alliance’s business and prospects. Changes in fiscal or monetary policies also may affect Western Alliance. The probability, timing, nature or extent of such changes or their effect on Western Alliance cannot be predicted.

Bank Holding Company Regulation

          General. Western Alliance Bancorporation is a bank holding company and is registered with the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). As such, the Federal Reserve is Western Alliance’s primary federal regulator, and Western is subject to extensive regulation, supervision and examination by the Federal Reserve. Western Alliance must file reports with the Federal Reserve and provide it with such additional information as it may require.

          Under Federal Reserve regulations, a bank holding company is required to serve as a source of financial and managerial strength for its subsidiary banks and may not conduct its operations in an unsafe or unsound manner. It is the Federal Reserve’s policy that, in serving as a source of strength to its subsidiary banks, a bank holding company should stand ready to use its available resources to provide adequate capital to its subsidiary banks during period of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks. A bank holding company’s failure to meet these obligations will generally be considered by the Federal Reserve to be an unsafe and unsound banking practice or a violation of Federal Reserve regulations, or both.

          Among its powers, the Federal Reserve may require a bank holding company to limit or terminate an activity or terminate control of, divest or liquidate subsidiaries or affiliates that the Federal Reserve determines constitute a significant risk to the financial safety or soundness of the bank holding company or any of its bank subsidiaries. Subject to certain exceptions, bank holding companies also are required to give written notice to and receive approval from the Federal Reserve before purchasing or redeeming their common stock or other equity securities. The Federal Reserve also may regulate provisions of a bank holding company’s debt, including by imposing interest rate ceilings and reserve requirements. In addition, the Federal Reserve requires all bank holding companies to maintain capital at or above certain prescribed levels.

          Holding Company Bank Ownership. The BHC Act requires every bank holding company to obtain the approval of the Federal Reserve before it may acquire, directly or indirectly, ownership or control of any voting shares of a bank or another bank holding company if, after such acquisition, it would own or control more than 5% of any class of the outstanding voting shares of such other bank or bank holding company, acquire all or substantially all the assets of a bank or another bank holding company or merge or consolidate with another bank holding company. In addition, a bank holding company must obtain Federal Reserve approval before acquiring the power to exercise a controlling influence over the management or policies of a bank or another bank holding company or to control the election of a majority of the directors (or trustees, general partners or other similar functions) of a bank or another bank holding company,

          Holding Company Nonbank Ownership. With certain exceptions, the BHC Act prohibits a bank holding company from acquiring or retaining, directly or indirectly, ownership or control of more than 5% of the outstanding voting shares of any company that is not a bank or bank holding company, or from engaging, directly or indirectly, in activities other than those of banking, managing or controlling banks, or providing services to the bank holding company or its subsidiaries. The principal exceptions to these prohibitions involve certain nonbank activities that have been identified by statute or by Federal Reserve regulation or order as activities so closely related to the business of banking or of managing or controlling banks as to be a proper incident thereto. Activities that have been determined to be so related to banking

15

include securities brokerage services, investment advisory services, fiduciary services and certain management advisory and data processing services, among others.

          Change in Control. In the event that the BHC Act is not applicable to a person or entity, the Change in Bank Control Act of 1978 (“CIBC Act”) requires that such person or entity give notice to the Federal Reserve and the Federal Reserve not disapprove such notice before such person or entity, whether acting (i) directly or indirectly or (ii) individually or through or in concert with one or more other individuals of entities, may acquire “control” of a bank holding company or certain banks. A limited number of exemptions apply to such transactions. Control is conclusively presumed to exist if a person or entity acquires 25% or more of the outstanding shares of any class of voting stock of the bank holding company or insured depository institution. Control is rebuttably presumed to exist if a person or entity acquires 10% or more but less than 25% of such voting stock and either the issuer has a class of registered securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) or no other person or entity will own, control or hold the power to vote a greater percentage of such voting stock immediately after the transaction.

          State Law Restrictions. As a Nevada corporation, Western Alliance is subject to certain limitations and restrictions under applicable Nevada corporate law. For example, Nevada law imposes restrictions relating to indemnification of directors, maintenance of books, records and minutes and observance of certain corporate formalities. Western Alliance also is a bank holding company within the meaning of state law in the states where its subsidiary banks are located. As such, it is subject to examination by and may be required to file reports with the Nevada Financial Institutions Division (“Nevada FID”) under sections 666.095 and 666.105 of the Nevada Revised Statutes. Western Alliance must obtain the approval of the Nevada Commissioner of Financial Institutions (“Nevada Commissioner”) before it may acquire a bank. Any transfer of control of a Nevada bank holding company must be approved in advance by the Nevada Commissioner.

          Under section 6-142 of the Arizona Revised Statutes, no person may acquire control of a company that controls an Arizona bank without the prior approval of the Arizona Superintendent of Financial Institutions (“Arizona Superintendent”). A person who has the power to vote 15% or more of the voting stock of a controlling company is presumed to control the company.

          Western Alliance also is subject to examination and reporting requirements of the California Department of Financial Institutions (“California DFI”) under sections 3703 and 3704 of the California Financial Code. Any transfer of control of a corporation that controls a California bank requires the prior approval of the California Commissioner of Financial Institutions (“California Commissioner”).

Bank Regulation

          General. Western Alliance controls three subsidiary banks. BankWest of Nevada, located in Las Vegas, Nevada, is chartered by the State of Nevada and is subject to primary regulation, supervision and examination by the Nevada FID. Alliance Bank of Arizona, located in Phoenix, Arizona, is chartered by the State of Arizona and is subject to primary regulation, supervision and examination by the Arizona Department of Financial Institutions. Torrey Pines Bank, located in San Diego, California, is chartered by the State of California and is subject to regulation, supervision and examination by the California DFI. Each bank also is subject to regulation by the Federal Deposit Insurance Corporation (“FDIC”) as its primary federal banking supervisory authority, and, as to certain matters, by the Federal Reserve.

          Federal and state banking laws and the implementing regulations promulgated by the federal and state banking regulatory agencies cover most aspects of the banks’ operations, including capital requirements, reserve requirements against deposits (and for possible loan losses and other contingencies), dividends and other distributions to shareholders, customers’ interests in deposit accounts, payment of interest on certain deposits, permissible activities and investments, securities that may be issued and debt that may be incurred, rate of growth, number and location of branch offices and acquisition and merger activity with other financial institutions.

          Deposits in the banks are insured by the FDIC to applicable limits through the Bank Insurance Fund. All of Western Alliance’s subsidiary banks are subject to deposit insurance premium payment requirements. Premiums are assessed semiannually and paid quarterly. The premium amount is based upon a risk classification system established by the FDIC. Banks with higher levels of capital and a low degree of supervisory concern are assessed lower premiums than banks with lower levels of capital or a

16

higher degree of supervisory concern. For the assessment period ending June 30, 2005, Western Alliance’s subsidiary banks are not required to pay any premium for deposit insurance. The FDIC also is empowered to make special assessments on insured depository institutions in amounts determined by the FDIC to be necessary to give it adequate income to repay amounts borrowed from the U.S. Treasury and other sources or for any other purpose the FDIC deems necessary. This assessment is not related to the condition of the banks that are assessed. The assessment is adjusted quarterly. The assessment for the first quarter of 2006 is 1.32 cents per $100 of FDIC-insured deposits.

          If, as a result of an examination, the FDIC were to determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of the banks’ operations had become unsatisfactory, or that any of the banks or their management was in violation of any law of regulation, the FDIC may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in the bank’s capital, to restrict the bank’s growth, to assess civil monetary penalties against the bank’s officers or directors, to remove officers and directors and, if the FDIC concludes that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate the bank’s deposit insurance.

          Under Nevada, Arizona and California law, the respective state banking supervisory authority has many of the same remedial powers with respect to state-chartered banks.

          Change in Control. The application of the CIBC Act is described in the discussion above regarding bank holding companies. Under Nevada banking law, a Nevada bank must report a change in ownership of 10% or more of the bank’s outstanding voting stock to the Nevada FID within three business days after obtaining knowledge of the change. Any person who acquires control of a Nevada bank must obtain the prior approval of the Nevada Commissioner. Arizona banking law provides that no person may acquire control of an Arizona bank without the prior approval of the Arizona Superintendent. A person who has the power to vote 15% or more of the voting stock of an Arizona bank is presumed to control the bank. California banking law requires that any person must obtain the prior approval of the California Commissioner before that person may acquire control of a California bank. A person who has the power to vote 10% or more of the voting stock of a California bank is presumed to control the bank.

          Bank Merger. Section 18(c) of the Federal Deposit Insurance Act (“FDI Act”) requires a bank or any other insured depository institution to obtain the approval of its primary federal banking supervisory authority before it may merge or consolidate with or acquire the assets or assume the liabilities of any other insured depository institution. State law requirements are similar. Nevada banking law requires that a bank must obtain the prior approval of the Nevada Commissioner before it may merge or consolidate with or transfer its assets and liabilities to another bank. Arizona banking law requires the approval of the Arizona Superintendent before a bank may merge or consolidate with another bank. Under California law, a California bank that is the survivor of a merger must file an application for approval with the California Commissioner.

Regulation of Nonbanking Subsidiaries

          Premier Trust Inc. Premier Trust, Inc. is a trust company chartered by the State of Nevada. Under Nevada law, a company may not transact any trust business, with certain exceptions, unless authorized by the Nevada Commissioner. The Nevada Commissioner examines the books and records of registered trust companies and may take possession of all the property and assets of a trust company whose capital is impaired or is otherwise determined to be unsafe and a danger to the public.

          Miller/ Russell & Associates, Inc. Miller/ Russell & Associates, Inc. is an Arizona corporation and an investment adviser that is registered with the SEC under the Investment Advisers Act of 1940 (“Advisers Act”). Under the Advisers Act, an investment adviser is subject to supervision and inspection by the SEC. A significant element of supervision under the Advisers Act is the requirement to make significant disclosures to the public under Part II of Form ADV of the adviser’s services and fees, the qualifications of its associated persons, financial difficulties and potential conflicts of interests. An investment adviser must keep extensive books and records, including all customer agreements, communications with clients, orders placed and proprietary trading by the adviser or any advisory representative.

17

Capital Standards

          Regulatory Capital Guidelines. The Federal Reserve and the FDIC have risk-based capital adequacy guidelines intended to measure capital adequacy with regard to the degree of risk associated with a bank’s or banking organization’s operations for transactions reported on the balance sheet as assets and for transactions, such as letters of credit and recourse arrangements, that are reported as off-balance-sheet items. Under these guidelines, the nominal dollar amounts of assets on the balance sheet and credit-equivalent amounts of off-balance-sheet items are multiplied by one of several risk adjustment percentages. These range from 0.0% for assets with low credit risk, such as cash and certain U.S. government securities, to 100.0% for assets with relatively higher credit risk, such as business loans. A banking organization’s risk-based capital ratios are obtained by dividing its Tier 1 capital and total qualifying capital (Tier 1 capital and a limited amount of Tier 2 capital) by its total risk-adjusted assets and off-balance-sheet items. Tier 1 capital consists of common stock, retained earnings, noncumulative perpetual preferred stock and minority interests in certain subsidiaries, less most other intangible assets. Tier 2 capital may consist of a limited amount of the allowance for loan and lease losses and certain other instruments that have some characteristics of equity. The inclusion of elements of Tier 2 capital as qualifying capital is subject to certain other requirements and limitations of the federal banking supervisory agencies. Since December 31, 1992, the Federal Reserve and the FDIC have required a minimum ratio of Tier 1 capital to risk-adjusted assets and off-balance-sheet items of 4.0% and a minimum ratio of qualifying total capital to risk-adjusted assets and off-balance-sheet items of 8.0%.

          The Federal Reserve and the FDIC require banks and bank holding companies to maintain a minimum amount of Tier 1 capital relative to average total assets, referred to as the leverage ratio. The principal objective of the leverage ratio is to constrain the maximum degree to which a bank holding company may leverage its equity capital base. For a bank or bank holding company rated in the highest of the five categories used by regulators to rate banking organizations, the minimum leverage ratio of Tier 1 capital to total assets is 3.0%. However, an institution with a 3.0% leverage ratio would be unlikely to receive the highest rating since a strong capital position is a significant part of the regulators’ rating criteria. All banks or bank holding companies not rated in the highest category must maintain an additional capital cushion of 100 to 200 basis points. The Federal Reserve and the FDIC have the discretion to set higher minimum capital requirements for specific institutions whose specific circumstances warrant it, such as a bank or bank holding company experiencing or anticipating significant growth. A bank or bank holding company that does not achieve and maintain the required capital levels may be issued a capital directive by the Federal Reserve or the FDIC, as appropriate, to ensure the maintenance of required capital levels. Neither the Federal Reserve nor the FDIC has advised Western Alliance or any of its subsidiary banks that it is subject to any special capital requirements.

          Prompt Corrective Action. Federal banking agencies possess broad powers to take corrective and other supervisory action to resolve the problems of insured depository institutions, including institutions that fall below one or more of the prescribed minimum capital ratios described above. An institution that is classified based upon its capital levels as well-capitalized, adequately capitalized, or undercapitalized may be treated as though it was in the next lower capital category if its primary federal banking supervisory authority, after notice and opportunity for hearing, determines that an unsafe or unsound condition or practice warrants such treatment. At each successively lower capital category, an insured depository institution is subject to additional restrictions. A bank holding company must guarantee that a subsidiary bank that adopts a capital restoration plan will meet its plan obligations. Under such a guarantee, a bank holding company may be liable for the lesser of up to 5% of the subsidiary bank’s assets at the time it became undercapitalized or the amount required to meet regulatory capital requirements. Any capital loans made by a bank holding company to a subsidiary bank are subordinated to the claims of depositors in the bank and to certain other indebtedness of the subsidiary bank. In the event of the bankruptcy of a bank holding company, any commitment by the bank holding company to a federal banking regulatory agency to maintain the capital of a subsidiary bank would be assumed by the bankruptcy trustee and would be entitled to priority of payment.

          In addition to measures that may be taken under the prompt corrective action provisions, federal banking regulatory authorities may bring enforcement actions against banks and bank holding companies for unsafe or unsound practices in the conduct of their businesses or for violations of any law, rule or regulation, any condition imposed in writing by the appropriate federal banking regulatory authority or any written agreement with the authority. Possible enforcement actions include the appointment of a conservator or receiver, the issuance of a cease-and-desist order that could be judicially enforced, the termination of insurance of deposits (in the case of a depository institution), the imposition of civil money

18

penalties, the issuance of directives to increase capital, the issuance of formal and informal agreements, the issuance of removal and prohibition orders against institution-affiliated parties and the enforcement of such actions through injunctions or restraining orders. In addition, a bank holding company’s inability to serve as a source of strength for its subsidiary banks could serve as an additional basis for a regulatory action against the bank holding company.

          Under Nevada law, if the stockholders’ equity of a Nevada-chartered bank becomes impaired, the Nevada Commissioner must require the bank to make the impairment good within three months after receiving notice from the Nevada Commissioner. If the impairment is not made good, the Nevada Commissioner may take possession of the bank and liquidate it.

          Dividends. Western Alliance has never declared or paid cash dividends on its capital stock. Western Alliance currently intends to retain any future earnings for future growth and does not anticipate paying any cash dividends in the foreseeable future. Any determination in the future to pay dividends will be at the discretion of Western Alliance’s board of directors and will depend on the company’s earnings, financial condition, results of operations, business prospects, capital requirements, regulatory restrictions, contractual restrictions and other factors that the board of directors may deem relevant.

          Western Alliance’s ability to pay dividends is subject to the regulatory authority of the Federal Reserve. Although there are no specific federal law or regulations restricting dividend payments by bank holding companies, the supervisory concern of the Federal Reserve focuses on a holding company’s capital position, its ability to meet its financial obligations as they come due and its capacity to act as a source of financial strength to its subsidiaries. In addition, Federal Reserve policy discourages the payment of dividends by a bank holding company that are not supported by current operating earnings.

          As a bank holding company registered with the State of Nevada, Western Alliance also is subject to limitations under Nevada law on the payment of dividends. Nevada banking law imposes no restrictions on bank holding companies regarding the payment of dividends. Under Nevada corporate law, section 78-288 of the Nevada Revised Statutes provides that no cash dividend or other distribution to shareholders, other than a stock dividend, may be made if, after giving effect to the dividend, the corporation would not be able to pay its debts as they become due or, except as otherwise specifically allowed by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities and the claims of preferred stockholders upon dissolution of the corporation.

          From time to time, Western Alliance may become a party to financing agreements and other contractual obligations that have the effect of limiting or prohibiting the declaration or payment of dividends. Holding company expenses and obligations with respect to its outstanding trust preferred securities and corresponding subordinated debt also may limit or impair Western Alliance’s ability to declare and pay dividends.

          Since Western Alliance has no significant assets other than the voting stock of its subsidiaries, it currently depends on dividends from its bank subsidiaries and, to a much lesser extent, its nonbank subsidiaries, for a substantial portion of its revenue. In general terms, the FDIA and the FDIC regulations restrict the payment of dividends when a bank is undercapitalized or will be after paying dividends, when a bank has failed to pay insurance assessments or when there are safety and soundness concerns regarding a bank. The ability of a state nonmember bank to pay cash dividends is not restricted by federal law or regulations. State law imposes restrictions on the ability of each of Western Alliance’s subsidiary banks to pay dividends:

• Under sections 661.235 and 661.240 of the Nevada Revised Statutes, BankWest of Nevada may not pay dividends unless the bank’s surplus fund, not including any initial surplus fund, equals the bank’s initial stockholders’ equity and includes 10% of the previous year’s net profits, and the dividend would not reduce the bank’s stockholders’ equity below the initial stockholders’ equity of the bank or 6% of the total deposit liability of the bank.

• Under section 6-187 of the Arizona Revised Statutes, Alliance Bank of Arizona may pay dividends on the same basis as any other Arizona corporation. Under section 10-640 of the Arizona Revised Statutes, a corporation may not make a distribution to shareholders if to do so would render the corporation insolvent or unable to pay its debts as they become due. However, an Arizona bank may not declare a non-stock dividend out of capital surplus without the approval of the Arizona Superintendent.

19

• Under section 642 of the California Financial Code, Torrey Pines Bank may not, without the prior approval of the California Commissioner, make a distribution to its shareholders in an amount exceeding the bank’s retained earnings or its net income, whichever is less, during its last three fiscal years, less any previous distributions made during that period by the bank or by any majority-owned subsidiary of the bank. Under section 643 of the California Financial Code, the California Commissioner may approve a larger distribution, provided it does not exceed the bank’s net income during the year, net income during the prior fiscal year or retained earnings, whichever is greatest.

          As of December 31, 2005, Torrey Pines Bank and Alliance Bank of Arizona had negative retained earnings and did not have the ability to pay dividends. BankWest of Nevada had the unrestricted ability to pay dividends in an aggregate amount of approximately $19.9 million.

          Redemption. A bank holding company may not purchase or redeem its equity securities without the prior written approval of the Federal Reserve if the purchase or redemption combined with all other purchases and redemptions by the bank holding company during the preceding 12 months equals or exceeds 10% of the bank holding company’s consolidated net worth. However, prior approval is not required if the bank holding company is well-managed, not the subject of any unresolved supervisory issues and, both immediately before and after the purchase or redemption, is well-capitalized.

Increasing Competition in Financial Services

          Interstate Banking And Branching. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (“Riegle-Neal Act”) generally authorizes interstate branching. Currently, bank holding companies may purchase banks in any state and banks may merge with banks in other states, unless the home state of the bank holding company or either merging bank has opted out under the legislation. After properly entering a state, an out-of-state bank may establish de novo branches or acquire branches or acquire other banks on the same terms as a bank that is chartered by the state.

          Nevada has enacted legislation authorizing interstate mergers pursuant to the Riegle-Neal Act. The Nevada statute permits out-of-state banks and bank holding companies meeting certain requirements to maintain and operate the Nevada branches of a Nevada bank that are acquired in an interstate combination. An out-of-state bank may not enter the state by establishing a de novo branch or acquiring a branch of a depository institution in Nevada without acquiring the institution itself or its charter. However, with the written approval of the Nevada Commissioner, such an out-of-state bank or bank holding company may engage in such a transaction in a county with a population less than 100,000.

          An out-of-state bank may enter Arizona by establishing a de novo branch or by acquiring a single branch of a financial institution that is headquartered in the state, provided that the branch is more than five years old and the state in which the out-of-state bank is headquartered extends reciprocal rights. An out-of-state bank holding company without a subsidiary bank in Arizona may establish a de novo bank in the state, and thereafter may acquire additional banks.

          An out-of-state bank may not enter California by establishing a de novo branch or acquiring a branch of a depository institution in California unless it merges with a California bank or acquires the whole business unit of a California bank. An out-of-state bank holding company without a subsidiary bank in California may establish a de novo bank in the state, and thereafter may acquire additional banks.

          Financial Holding Company Status. The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (“GLB Act”), was enacted in order to establish a comprehensive framework to permit affiliations among commercial banks, insurance companies, securities and investment banking firms and other financial service providers. The GLB Act revised the BHC Act to permit a qualifying bank holding company to engage in a broader range of financial activities, primarily through wholly owned subsidiaries, and thereby to foster greater competition among financial service companies. The GLB Act also contains provision that expressly preempt any state law restricting the establishment of financial affiliations, primarily with regard to insurance activities. The GLB Act:

• Broadened the activities that may be conducted by bank holding companies and their subsidiaries and by national banks through financial subsidiaries. Under parity provisions of the FDI Act and FDIC regulations, as well as state banking laws and regulations, insured state banks may engage in activities that are permissible for national banks, thereby extending the effect of the GLB Act to state banks as well;

20

• Provided a framework for protecting the privacy of consumer information;

• Modified the laws governing the implementation of the Community Reinvestment Act (“CRA”); and

• Addressed a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions.

          In order to become or remain a financial holding company, a bank holding company must be well-capitalized, well-managed, and, except in limited circumstances, rated “satisfactory” or better for performance under the CRA. Failure by a financial holding company to maintain compliance with these requirements or correct non-compliance within a fixed time period could lead to the forced divesture of any subsidiary depository institution or a requirement to conform all nonbanking activities to those permissible for a bank holding company. A bank holding company that is not also a financial holding company can only engage in banking activities and nonbanking activities that were determined by the Federal Reserve to be so closely related to banking or managing or controlling banks as to be a proper incident thereto at the time that the GLB Act was adopted by Congress.

          A bank holding company that qualifies and elects to become a financial holding company may affiliate with securities firms and insurance companies and engage in investment banking and other activities that are financial in nature or are incidental or complementary to activities that are financial in nature. Under the regulations of the Federal Reserve implementing the GLB Act, activities that are financial in nature and may be engaged in by financial holding companies include securities underwriting, dealing and market making, sponsoring mutual funds and investment companies, engaging in insurance underwriting and brokerage activities, investing (without providing routine management) in companies engaged in nonfinancial activities and conducting activities that the Federal Reserve, in consultation with the Secretary of the Treasury, determines from time to time to be financial in nature or incidental to a financial activity.

          Western Alliance does not believe that the GLB Act will have a material effect on its operations, at least in the near-term. Western Alliance is not a financial holding company and has no current plans to engage in any activities not permitted to traditional bank holding companies. However, to the extent that the GLB Act enables banks, securities firms and insurance companies to affiliate, the financial service industry may experience further consolidation. The GLB Act also may contribute to an increase in the level of competition that Western Alliance faces from larger institutions and other types of companies offering diversified financial products, many of which may have substantially greater financial resources than Western Alliance has.

Selected Regulation of Banking Activities

          Transactions with Affiliates. Transactions between banks and their affiliates are governed by sections 23A and 23B of the Federal Reserve Act (“FRA”) and their implementing regulations. Generally, sections 23A and 23B are intended to protect banks from suffering losses arising from transactions with non-insured affiliates, by limiting the extent to which a bank or its subsidiaries may engage in covered transactions with any one affiliate and with all nonbank affiliates in the aggregate, and by requiring that such transactions be on terms that are consistent with safe and sound banking practices. Sections 23A and 23B also regulate transactions by a bank with financial subsidiaries that it may operate as a result of the expanded authority granted under GLB Act. Covered transactions include extensions of credit to affiliates, investments in securities issued by affiliates and the use of affiliates’ securities as collateral for loans to any non-affiliated borrower.

          These statutory provisions and regulations may limit the ability of Western Alliance to obtain funds from its subsidiary banks for its cash needs, including funds for payment of dividends, interest and operational expenses.

          Insider Credit Transactions. Banks also are subject to certain restrictions under the FRA and Federal Reserve regulations that implement it regarding extensions of credit to executive officers, directors or principal shareholders of a bank and its affiliates or to any related interests of such persons (collectively referred to as insiders). All extensions of credit to insiders must be made on substantially the same terms and pursuant to the same credit underwriting procedures as are applicable to comparable transactions with

21

persons who are neither insiders nor employees, and must not involve more than the normal risk of repayment or present other unfavorable features. Insider loans also are subject to certain lending limits, restrictions on overdrafts to insiders and requirements for prior approval by the bank’s board of directors.

          Lending Limits. State banking law generally limits the amount of funds that a bank may lend to a single borrower. Under Nevada law, the total amount of outstanding loans that a bank may make to a single borrower generally may not exceed 25% of stockholders’ equity. Under Arizona law, the obligations of one borrower to a bank may not exceed 15% of the bank’s capital. Under California law, the obligations of any one borrower to a bank generally may not exceed 25% of the sum of the bank’s shareholders’ equity, allowance for loan losses, capital notes and debentures.

          Tying Arrangements. Under the BHC Act, with certain exceptions, banks are prohibited from conditioning the availability or price of one product on a requirement that the customer also obtain another product from the bank or an affiliate of the bank (known as tying). This prohibition is not applicable to nonbank entities. The BHC Act’s tying provisions also generally prohibit a bank from conditioning the availability or price of one product on a requirement that the customer either provide another product to the bank or an affiliate of the bank or not obtain another product from a competitor of the bank or a competitor of an affiliate of the bank. The tying provisions of the BHC Act do expressly permit banks to engage in certain forms of tying and authorizes the Federal Reserve to grant additional exceptions to the statute’s restrictions. For example, a bank may condition the availability or price of a product or service on a requirement that the customer also obtain a traditional bank product, like a loan, discount, deposit, or trust service, from the bank or an affiliate of the bank

          Regulation of Management. Federal law sets forth circumstances under which officers or directors of a bank or bank holding company may be removed by the institution’s primary federal banking supervisory authority. Federal law also prohibits a management official of a bank or bank holding company from serving as a management official with an unaffiliated bank or bank holding company that has offices within a specified geographic area that is related to the location of the bank’s offices and the asset size of the institutions.

          Safety and Soundness Standards. Federal law imposes upon banks certain non-capital safety and soundness standards. These standards cover internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation and benefits. Additional standards apply to asset quality, earnings and stock valuation. An institution that fails to meet these standards must develop a plan, acceptable to its regulators, specifying the steps that the institution will take to meet the standards. Failure to submit or implement such a plan may subject the institution to regulatory sanctions.

Consumer Protection Laws and Regulations

          The banking regulatory authorities are have increased their attention in recent years to compliance with consumer protection laws and their implementing regulations. Examination and enforcement have become more intense in nature, and insured institutions have been advised to monitor carefully compliance with such laws and regulations. The bank is subject to many federal consumer protection statutes and regulations, some of which are discussed below.

          Community Reinvestment Act. The CRA is intended to encourage insured depository institutions, while operating safely and soundly, to help meet the credit needs of their communities. The CRA specifically directs the federal regulatory agencies, when examining insured depository institutions, to assess a bank’s record of helping meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound banking practices. The CRA further requires the agencies to take a financial institution’s record of meeting its community credit needs into account when evaluating applications for, among other things, domestic branches, mergers or acquisitions, or holding company formations. The agencies use the CRA assessment factors in order to provide a rating to the financial institution. The ratings range from a high of “outstanding” to a low of “substantial noncompliance.” At their most recent performance evaluations under the CRA, BankWest of Nevada was rated “outstanding” as of November 2003, Alliance Bank of Arizona was rated “satisfactory” as of August 2004 and Torrey Pines Bank was rated “satisfactory” as of May 2005.

          Equal Credit Opportunity Act. The Equal Credit Opportunity Act generally prohibits discrimination in any credit transaction, whether for consumer or business purposes, on the basis of race,

22

color, religion, national origin, sex, marital status, age (except in limited circumstances), receipt of income from public assistance programs, or good faith exercise of any rights under the Consumer Credit Protection Act.

          Truth in Lending Act. The Truth in Lending Act (“TILA”) is designed to ensure that credit terms are disclosed in a meaningful way so that consumers may compare credit terms more readily and knowledgeably. As a result of TILA, creditors must use the same credit terminology to express rates and payments, including the annual percentage rate, the finance charge, the amount financed, the total of payments and the payment schedule, among other things.

          Fair Housing Act. The Fair Housing Act (“FHA”) regulates many practices, and makes it unlawful for any lender to discriminate in its housing-related lending activities against any person because of race, color, religion, national origin, sex, handicap or familial status. A number of lending practices have been found by the courts to be illegal under the FHA, including some practices that are not specifically mentioned in the FHA.

          Home Mortgage Disclosure Act. The Home Mortgage Disclosure Act (“HMDA”) grew out of public concern over credit shortages in certain urban neighborhoods and provides public information that is intended to help to show whether financial institutions are serving the housing credit needs of the neighborhoods and communities in which they are located. The HMDA also includes a “fair lending” aspect that requires the collection and disclosure of data about applicant and borrower characteristics as a way of identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes.

          Beginning with data for 2004, home mortgage lenders, including banks, were required under the HMDA to make available to the public expanded information regarding the pricing of certain home mortgage loans, including the “rate spread” between the interest rate on loans and certain Treasury securities and other benchmarks. The availability of this information has led to increased scrutiny of higher-priced loans at all financial institutions by governmental entities, community groups and the general public, and to the initiation of a limited number of investigations by federal banking agencies, the U.S. Department of Justice and various state or local agencies.

          Real Estate Settlement Practices Act. The Real Estate Settlement Procedures Act (“RESPA”) requires lenders to provide borrowers with disclosures regarding the nature and cost of real estate settlements. RESPA also prohibits certain abusive practices within the real estate settlement process, such as kickbacks, referral fees and fee-splitting without providing settlement services.

          Penalties under the above laws may include fines and reimbursements, among others. Due to heightened regulatory concern related to compliance with these laws generally, the Western Alliance and its subsidiary banks may incur additional compliance costs or be required to expend additional funds for investments in local communities.

Predatory Lending

          “Predatory lending” is a far-reaching concept and potentially covers a broad range of behavior. As such, it does not lend itself to a concise or comprehensive definition. However, predatory lending typically involves one or more of the following elements:

• making unaffordable loans based on the borrower’s assets rather than the borrower’s ability to repay an obligation;

• inducing a borrower to refinance a loan repeatedly in order to charge high points and fees each time the loan is refinanced, or loan flipping; and

• engaging in fraud or deception to conceal the true nature of the loan obligation from an unsuspecting or unsophisticated borrower.

          The Home Ownership Equity and Protection Act of 1994 (“HOEPA”) and regulations adopted by the Federal Reserve to implement it require extra disclosures and extend additional protection to borrowers in consumer credit transactions, such as home repairs or renovation, that are secured by a mortgage on the borrower’s primary residence. The HOEPA disclosures and protections are applicable to consumer loans with any of the following features:

23

• interest rates for first lien mortgage loans that are more than 8 percentage points above the yield on U.S. Treasury securities having a comparable maturity;

• interest rates for subordinate lien mortgage loans that are more than 10 percentage points above the yield on U.S. Treasury securities having a comparable maturity; or

• fees, such as optional insurance and similar debt protection costs that are paid in connection with the credit transaction that, when combined with points and fees, are deemed to be excessive.

          HOEPA also prohibits loan flipping by the same lender or loan servicer within a year of the loan being refinanced. Lenders are presumed to have violated the law unless they document that the borrower has the ability to repay. Lenders that violate the rules face cancellation of loans and penalties equal to the finance charges paid.

Privacy

          Under the GLB Act, all financial institutions, including Western Alliance, its bank subsidiaries and certain of their nonbanking affiliates and subsidiaries, are required to establish policies and procedures to restrict the sharing of nonpublic customer data with nonaffiliated parties at the customer’s request and to protect customer data from unauthorized access. In addition, the Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”) includes many provisions concerning national credit reporting standards and permits consumers, including customers of Western Alliance’s subsidiary banks, to opt out of customer information-sharing for marketing purposes among affiliated companies. The FACT Act also requires banks and other financial institutions to notify their customers if they report negative information about them to a credit bureau or if they are granted credit on terms less favorable than those generally available. The Federal Reserve and the Federal Trade Commission have extensive rulemaking authority under the FACT Act, and Western Alliance and its subsidiary banks are subject to these provisions. Western Alliance has developed policies and procedures for itself and its subsidiaries to maintain compliance and believes it is in compliance with all privacy, information- sharing and notification provisions of the GLB Act and the FACT Act.

          Under California law, every business that owns or licenses personal information about a California resident must maintain reasonable security procedures and policies to protect that information. All customer records that contain personal information and that are longer to be retained must be destroyed. Any person that conducts business in California, maintains customers’ personal information in unencrypted computer records and experiences a breach of security with regard to those records must promptly disclose the breach to all California residents whose personal information was or is reasonably believed to have been acquired by unauthorized persons as a result of such breach. Any person who maintains computerized personal data for others and experiences a breach of security must promptly inform the owner or licensee of the breach. A business may not provide personal information of its customers to third parties for direct mailing purposes unless the customer “opts in” to such information sharing. A business that fails to provide this privilege to its customers must report the uses made of its customers’ data upon a customer’s request.

Compliance

          In order to assure that Western Alliance and its subsidiary banks are in compliance with the laws and regulations that apply to their operations, including those summarized below, Western Alliance and each of its subsidiary banks employs a compliance officer and Western Alliance engages an independent compliance auditing firm. Western Alliance is regularly reviewed for compliance with applicable laws and regulations by the Federal Reserve and the subsidiary banks are regularly reviewed by the FDIC and their respective state banking agencies. Based on the compliance assessments of Western Alliance and its subsidiary banks by outside compliance auditors and state and federal banking supervisory authorities, Western Alliance believes that it materially complies with the laws and regulations that apply to its operations.

Corporate Governance and Accounting Legislation

          Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act (“SOX”) was adopted for the stated purpose to increase corporate responsibility, enhance penalties for accounting and auditing improprieties at

24

publicly traded companies, and protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. SOX is the most far-reaching U.S. securities legislation enacted in several years. It applies generally to all companies that file or are required to file periodic reports with the SEC under the Securities Exchange Act of 1934 (“Exchange Act”), which includes Western Alliance. SOX includes very specific additional disclosure requirements and new corporate governance rules, requires the SEC and securities exchanges to adopt extensive additional disclosure, corporate governance and other related rules and mandates further studies of certain issues by the SEC and the Comptroller General. Among its provisions, SOX subjects bonuses issued to top executives to disgorgement if a subsequent restatement of a company’s financial statements was due to corporate misconduct, prohibits an officer or director from misleading or coercing an auditor, prohibits insider trades during pension fund “blackout periods,” imposes new criminal penalties for fraud and other wrongful acts and extends the period during which certain securities fraud lawsuits can be brought against a company or its officers.

          SOX represents significant federal involvement in matters traditionally left to state regulatory systems, such as the regulation of the accounting profession, and to state corporate law, such as the relationship between a board of directors and management and between a board of directors and its committees. The SEC has been delegated the task of enacting rules to implement various provisions with respect to, among other matters, disclosure in periodic filings pursuant to the Exchange Act. In addition, the federal banking regulatory authorities have adopted requirements concerning the certification of financial statements by bank officials that are generally similar to requirements under SOX.

Anti-Money Laundering and Anti-Terrorism Legislation

          Congress enacted the Bank Secrecy Act of 1970 (the “BSA”) to require financial institutions to maintain certain records and to report certain transactions to prevent such institutions from being used to hide or transfer money derived from criminal activity and tax evasion. The BSA establishes, among other things, (a) record keeping requirements to assist government enforcement agencies in tracing financial transactions and flow of funds; (b) reporting requirements for Suspicious Activity Reports and Currency Transaction Reports to assist government enforcement agencies in detecting patterns of criminal activity; (c) enforcement provisions authorizing criminal and civil penalties for illegal activities and violations of the BSA and its implementing regulations; and (d) safe harbor provisions that protect financial institutions from civil liability for their cooperative efforts.

          Title III of the USA PATRIOT Act amended the BSA and incorporates anti-terrorist financing provisions into the requirements of the BSA and its implementing regulations. Among other things, the USA PATRIOT Act requires all financial institutions to institute and maintain a risk-based anti-money laundering compliance program that includes a customer identification program, provides for information sharing with law enforcement and between certain financial institutions by means of an exemption from the privacy provisions of the GLB Act, prohibits U.S. banks and broker-dealers from maintaining accounts with foreign “shell” banks, establishes due diligence and enhanced due diligence requirements for certain foreign correspondent banking and foreign private banking accounts and imposes additional record keeping requirements for certain correspondent banking arrangements. The USA PATRIOT Act also grants broad authority to the Secretary of the Treasury to take actions to combat money laundering, and federal bank regulators are required to evaluate the effectiveness of an applicant in combating money laundering in determining whether to approve any application submitted by a financial institution. Western Alliance and its affiliates have adopted policies, procedures and controls to comply with the BSA and the USA PATRIOT Act, and they engage in very few transactions of any kind with foreign financial institutions or foreign persons.

          The Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign countries, entities and individuals based on U.S. foreign policy and national security goals. As a result, financial institutions must scrutinize transactions to ensure that they do not represent obligations of, or ownership interests in, entities owned or controlled by sanctioned targets. In addition, Western Alliance, its subsidiary banks and several of their nonbanking affiliates and subsidiaries must restrict transactions with certain specified countries except as permitted by OFAC.

25

ITEM 1A. RISK FACTORS

          Our businesses face risks and uncertainties, including those discussed below and elsewhere in this report. These factors represent risks and uncertainties that could have a material adverse effect on our business, results of operations and financial condition. These risks and uncertainties are not the only ones we face. Others that we do not know about now, or that we do not now think are significant, may impair our business or the trading price of our securities. The following are significant risks we have identified.

Our current primary market area is substantially dependent on gaming and tourism revenue, and a downturn in gaming or tourism could hurt our business and our prospects.

     Our business is currently concentrated in the Las Vegas metropolitan area. The economy of the Las Vegas metropolitan area is unique in the United States for its level of dependence on services and industries related to gaming and tourism. Any event that negatively impacts the gaming or tourism industry will adversely impact the Las Vegas economy.

     Gaming and tourism revenue (whether or not such tourism is directly related to gaming) is vulnerable to fluctuations in the national economy. A prolonged downturn in the national economy could have a significant adverse effect on the economy of the Las Vegas area. Virtually any development or event that could dissuade travel or spending related to gaming and tourism, whether inside or outside of Las Vegas, could adversely affect the Las Vegas economy. In this regard, the Las Vegas economy is more susceptible than the economies of other cities to issues such as higher gasoline and other fuel prices, increased airfares, unemployment levels, recession, rising interest rates, and other economic conditions, whether domestic or foreign. Gaming and tourism are also susceptible to certain political conditions or events, such as military hostilities and acts of terrorism, whether domestic or foreign. A terrorist act, or the mere threat of a terrorist act, may adversely affect gaming and tourism and the Las Vegas economy and may cause substantial harm to our business.

     In addition, Las Vegas competes with other areas of the country for gaming revenue, and it is possible that the expansion of gaming operations in other states, such as California, as a result of changes in laws or otherwise, could significantly reduce gaming revenue in the Las Vegas area.

     Although we have no substantial customer relationships in the gaming and tourism industries, a downturn in the Las Vegas economy, generally, could have an adverse effect on our customers and result in an increase in loan delinquencies and foreclosures, a reduction in the demand for our products and services and a reduction of the value of our collateral for loans which could result in the reduction of a customer’s borrowing power, any of which could adversely affect our business, financial condition, results of operations and prospects.

We may not be able to continue our growth at the rate we have in the past several years.

     We have grown substantially, from having one chartered bank with $443.7 million in total assets and $410.2 million in total deposits as of December 31, 2000, to three chartered banks with $2.9 billion in total assets and $2.4 billion in total deposits as of December 31, 2005. If we are unable to effectively execute on our strategy, we may not be able to continue to grow at our historical rates. In particular, Alliance Bank of Arizona and Torrey Pines Bank have achieved unusually high annual rates of growth as compared to other recently opened de novo banks. We do not expect this high level of growth at Alliance Bank of Arizona and Torrey Pines Bank to continue in the future.

Our growth and expansion strategy may not prove to be successful and our market value and profitability may suffer.

     Growth through acquisitions of banks or the organization of new banks in high-growth markets, especially in markets outside of our current markets, represents an important component of our business strategy. We recently entered into agreements to acquire Intermountain and Bank of Nevada. For more information regarding these acquisitions, see “Recent Developments”. Both of these acquisitions, as well as any future acquisitions, will be accompanied by the risks commonly encountered in acquisitions. These risks include, among other things:

• difficulty of integrating the operations and personnel;

• potential disruption of our ongoing business; and

26

• inability of our management to maximize our financial and strategic position by the successful implementation of uniform product offerings and the incorporation of uniform technology into our product offerings and control systems.

     We expect that competition for suitable acquisition candidates may be significant. We may compete with other banks or financial service companies with similar acquisition strategies, many of which are larger and have greater financial and other resources. We cannot assure you that we will be able to successfully identify and acquire suitable acquisition targets on acceptable terms and conditions.

     In addition to the acquisition of existing financial institutions, we may consider the organization of new banks in new market areas. We do not have any current plan to organize a new bank. Any acquisition or organization of a new bank carries with it numerous risks, including the following:

• the inability to obtain all required regulatory approvals;

• significant costs and anticipated operating losses during the application and organizational phases, and the first years of operation of the new bank;

• the inability to secure the services of qualified senior management;

• the local market may not accept the services of a new bank owned and managed by a bank holding company headquartered outside of the market area of the new bank;

• the inability to obtain attractive locations within a new market at a reasonable cost; and

• the additional strain on management resources and internal systems and controls.

     We cannot assure you that we will be successful in overcoming these risks or any other problems encountered in connection with acquisitions and the organization of new banks. Our inability to overcome these risks could have an adverse effect on our ability to achieve our business strategy and maintain our market value and profitability growth.

The combined company’s status as a holding company makes it dependent on dividends from its subsidiaries to meet its obligations.

     After the pending mergers, Western Alliance will continue to be a holding company that conducts almost all of its operations through its subsidiaries. The combined company will not have significant assets other than the stock of its subsidiaries. Accordingly, the combined company will depend on dividends from its subsidiaries to meet its obligations. The combined company’s right to participate in any distribution of earnings or assets of its subsidiaries is subject to the prior claims of creditors of such subsidiaries. Under federal and state law, a subsidiary is limited in the amount of dividends it may pay to its parent without prior regulatory approval. Also, bank regulators have the authority to prohibit a subsidiary from paying dividends if the bank regulators determine that such subsidiary is in an unsafe or unsound condition or that the payment would be an unsafe and unsound bank practice.

If we continue to grow rapidly as planned, we may not be able to control costs and maintain our asset quality.

     We expect to continue to grow our assets and deposits, the products and services which we offer and the scale of our operations, generally, both internally and through acquisitions. Our ability to manage our growth successfully will depend on our ability to maintain cost controls and asset quality while attracting additional loans and deposits on favorable terms. If we grow too quickly and are not able to control costs and maintain asset quality, this rapid growth could materially adversely affect our financial performance.

We may have difficulty managing our growth, which may divert resources and limit our ability to successfully expand our operations.

     Our rapid growth has placed, and it may continue to place, significant demands on our operations and management. Our future success will depend on the ability of our officers and other key employees to continue to implement and improve our operational, credit, financial, management and other internal risk controls and processes and our reporting systems and procedures, and to manage a growing number of

27

client relationships. We may not successfully implement improvements to our management information and control systems and control procedures and processes in an efficient or timely manner and may discover deficiencies in existing systems and controls. In particular, our controls and procedures must be able to accommodate an increase in expected loan volume and the infrastructure that comes with new branches and banks. Thus, our growth strategy may divert management from our existing businesses and may require us to incur additional expenditures to expand our administrative and operational infrastructure. If we are unable to manage future expansion in our operations, we may experience compliance and operational problems, have to slow the pace of growth, or have to incur additional expenditures beyond current projections to support such growth, any one of which could adversely affect our business.

Our future growth is dependent upon our ability to recruit additional, qualified employees, especially seasoned relationship bankers.

     Our market areas are experiencing a period of rapid growth, placing a premium on highly qualified employees in a number of industries, including the financial services industry. Our business plan includes, and is dependent upon, hiring and retaining highly qualified and motivated executives and employees at every level. In particular, our success has been partly the result of our management’s ability to seek and retain highly qualified relationship bankers that have long-standing relationships in their communities. These professionals bring with them valuable customer relationships, and have been an integral part of our ability to attract deposits and to expand rapidly in our market areas. We expect to experience substantial competition in our endeavor to identify, hire and retain the top-quality employees that we believe are key to our future success. If we are unable to hire and retain qualified employees, we may not be able to grow our franchise and successfully execute our business strategy.

We are highly dependent on real estate and events that negatively impact the real estate market could hurt our business.

     A significant portion of our loan portfolio is dependent on real estate. As of December 31, 2005, real estate related loans accounted for approximately 80% of total loans. Our financial condition may be adversely affected by a decline in the value of the real estate securing our loans. In addition, acts of nature, including earthquakes, fires and floods, which may cause uninsured damage and other loss of value to real estate that secures these loans, may also negatively impact our financial condition.

     In addition, title company deposits comprised 31.9% of our total non-interest bearing deposits as of December 31, 2005. A slowdown in real estate activity in the markets we serve may cause a decline in our deposit growth and may negatively impact our financial condition.

Our high concentration of commercial real estate, construction and land development and commercial, industrial loans expose us to increased lending risks.

     As of December 31, 2005, the composition of our loan portfolio was as follows:

• commercial real estate loans of $727.2 million, or 40.5% of total loans,

• construction and land development loans of $432.7 million, or 24.1% of total loans,

• commercial and industrial loans of $342.4 million, or 19.1% of total loans,

• residential real estate loans of $272.9 million, or 15.2% of total loans, and

• consumer loans of $20.4 million, or 1.1% of total loans.

     Commercial real estate, construction and land development and commercial and industrial loans, which comprised 83.7% of our total loan portfolio as of December 31, 2005, expose us to a greater risk of loss than our residential real estate and consumer loans, which comprised 16.3% of our total loan portfolio as of December 31, 2005. Commercial real estate and land development loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential loans. Consequently, an adverse development with respect to one commercial loan or one credit relationship may expose us to a significantly greater risk of loss compared to an adverse development with respect to one residential mortgage loan.

28

If we lost a significant portion of our low-cost deposits, it would negatively impact our profitability.

     Our profitability depends in part on our success in attracting and retaining a stable base of low-cost deposits. As of December 31, 2005, our deposit base was comprised of 40.9% non-interest bearing deposits, of which 31.9% consisted of title company deposits, which consist primarily of deposits held in escrow pending the closing of commercial and residential real estate transactions, and to a lesser extent, operating accounts for title companies; 61.6% consisted of other business deposits, which consist primarily of operating accounts for businesses; and 6.5% consisted of consumer deposits. We consider these deposits to be core deposits. While we generally do not believe these deposits are sensitive to interest rate fluctuations, the competition for these deposits in our markets is strong and if we lost a significant portion of these low-cost deposits, it would negatively impact our profitability.

Many of our loans have been made recently, and in certain circumstances there is limited repayment history against which we can fully assess the adequacy of our allowance for loan losses. If our allowance for loan losses is not adequate to cover actual loan losses, our earnings will decrease.

     The risk of nonpayment of loans is inherent in all lending activities, and nonpayment, if it occurs, may negatively impact our earnings and overall financial condition, as well as the value of our common stock. Also, many of our loans have been made over the last three years and in certain circumstances there is limited repayment history against which we can fully assess the adequacy of our allowance for loan losses. We make various assumptions and judgments about the collectibility of our loan portfolio and provide an allowance for probable losses based on several factors. If our assumptions are wrong, our allowance for loan losses may not be sufficient to cover our losses, which would have an adverse effect on our operating results. Additions to our allowance for loan losses decrease our net income. While we have not experienced any significant charge-offs or had large numbers of nonperforming loans, due to the significant increase in loans originated during this period, we cannot assure you that we will not experience an increase in delinquencies and losses as these loans continue to mature. The actual amount of future provisions for loan losses cannot be determined at this time and may exceed the amounts of past provisions.

Our future success will depend on our ability to compete effectively in a highly competitive market.

     We face substantial competition in all phases of our operations from a variety of different competitors. Our competitors, including commercial banks, community banks, savings and loan associations, mutual savings banks, credit unions, consumer finance companies, insurance companies, securities dealers, brokers, mortgage bankers, investment advisors, money market mutual funds and other financial institutions, compete with lending and deposit-gathering services offered by us. Increased competition in our markets may result in reduced loans and deposits.

     There is very strong competition for financial services in the market areas in which we conduct our businesses from many local commercial banks as well as numerous regionally based commercial banks. Many of these competing institutions have much greater financial and marketing resources than we have. Due to their size, many competitors can achieve larger economies of scale and may offer a broader range of products and services than us. If we are unable to offer competitive products and services, our earnings may be negatively affected.

     Some of the financial services organizations with which we compete are not subject to the same degree of regulation as is imposed on bank holding companies and federally insured financial institutions. As a result, these nonbank competitors have certain advantages over us in accessing funding and in providing various services. The banking business in our primary market areas is very competitive, and the level of competition facing us may increase further, which may limit our asset growth and profitability. For more information on the competition we have in our markets, see “Business — Competition.”

Our business would be harmed if we lost the services of any of our senior management team or senior relationship bankers.

     We believe that our success to date has been substantially dependent on our senior management team, which includes Robert Sarver, our Chairman, President and Chief Executive Officer and Chief Executive Officer of Torrey Pines Bank, Dale Gibbons, our Chief Financial Officer, Larry Woodrum, President and Chief Executive Officer of BankWest of Nevada and James Lundy, President and Chief Executive Officer of Alliance Bank of Arizona, and certain of our senior relationship bankers. We also believe that our prospects for success in the future are dependent on retaining our senior management team and senior

29

relationship bankers. In addition to their skills and experience as bankers, these persons provide us with extensive community ties upon which our competitive strategy is based. Our ability to retain these persons may be hindered by the fact that we have not entered into employment agreements with any of them. The loss of the services of any of these persons, particularly Mr. Sarver, could have an adverse effect on our business if we can’t replace them with equally qualified persons who are also familiar with our market areas.

Mr. Sarver’s involvement in outside business interests requires substantial time and attention and may adversely affect our ability to achieve our strategic plan and maintain our current growth.

     Mr. Sarver joined us in December of 2002 and has been an integral part of our recent growth. He has substantial business interests that are unrelated to us, including his ownership interest in the Phoenix Suns NBA franchise. Mr. Sarver’s other business interests demand significant time commitments, the intensity of which may vary throughout the year. Mr. Sarver’s other commitments may reduce the amount of time he has available to devote to our business. We believe that Mr. Sarver spends the substantial majority of his business time on matters related to our company. However, a significant reduction in the amount of time Mr. Sarver devotes to our business may adversely affect our ability to achieve our strategic plan and maintain our current growth.

Adverse publicity or circumstances similar to that experienced following the arrest and subsequent acquittal of our Chief Financial Officer could generate negative publicity for us, cause reputational harm and cause our stock price to decline.

     In June 2002, after a jury trial, Dale Gibbons was acquitted of charges of possession of a controlled substance, dealing in harmful material to a minor and endangerment of a child. Following his acquittal, Mr. Gibbons filed a civil rights lawsuit against numerous parties. In early 2005, the defendants were granted summary judgment on substantially all of Mr. Gibbons’ claims, and, subsequently, the parties resolved the lawsuit and an order of dismissal was entered by the U.S. District Court. There was extensive media coverage of all of the events surrounding Mr. Gibbons’ arrest and his subsequent resignation as the Chief Financial Officer of his then employer, Zions Bancorporation. Before hiring Mr. Gibbons as our Chief Financial Officer, our Audit Committee engaged special legal counsel and an investigator to assist in considering Mr. Gibbons’ prospective employment with Western Alliance. We evaluated Mr. Gibbons’ extensive banking background, reviewed the legal and investigatory descriptions of the facts and circumstances surrounding his arrest and consulted with the Federal Deposit Insurance Corporation and the Federal Reserve Bank of San Francisco. Our Board of Directors determined that Mr. Gibbons was suitable to serve as our Chief Financial Officer. Subsequent to his hiring, our Board was updated on the claims and information alleged against Mr. Gibbons in the civil rights lawsuit. Also, in July 2005, we completed our initial public offering and listed our common stock on the NYSE. Mr. Gibbons was an integral part of that effort. Our Board continues to believe Mr. Gibbons is suitable to serve as our Chief Financial Officer. However, adverse publicity or circumstances, similar to that which surrounded Mr. Gibbons’ arrest and trial in 2001 and 2002, could materially damage the public’s perception of us, and impair the reputations of Mr. Gibbons and Western Alliance, and adverse public sentiment could affect the market price of our common stock and our business.

A deterioration in economic conditions generally could adversely affect our business, financial condition, results of operations and prospects.

     A deterioration in economic conditions generally could adversely affect our business, financial condition, results of operations and prospects. Such a deterioration could result in a variety of adverse consequences to us, including a reduction in net income and the following:

• Loan delinquencies, non-performing assets and foreclosures may increase, which could result in higher operating costs, as well as increases in our loan loss provisions;

• Demand for our products and services may decline, including the demand for loans, which would adversely affect our revenues; and

• Collateral for loans made by us may decline in value, reducing a customer’s borrowing power, and reducing the value of assets and collateral associated with our loans which would cause decreases in net interest income and increasing loan loss provisions.

30

Economic conditions either nationally or locally in areas in which our operations are concentrated may be less favorable than expected.

     Deterioration in local, regional, national or global economic conditions could result in, among other things, an increase in loan delinquencies, a decrease in property values, a change in housing turnover rate or a reduction in the level of bank deposits. Particularly, a weakening of the real estate or employment market in our primary market areas of Las Vegas, San Diego, Tucson and Phoenix could result in an increase in the number of borrowers who default on their loans and a reduction in the value of the collateral securing their loans, which in turn could have an adverse effect on our profitability and asset quality.

Terrorist attacks and threats of war or actual war may impact all aspects of our operations, revenues, costs and stock price in unpredictable ways.

     Terrorist attacks in the United States, as well as future events occurring in response or in connection to them including, without limitation, future terrorist attacks against United States targets, rumors or threats of war, actual conflicts involving the United States or its allies or military or trade disruptions, may impact our operations. Any of these events could cause consumer confidence and savings to decrease or result in increased volatility in the United States and worldwide financial markets and economy. Any of these occurrences could have an adverse impact on our operating results, revenues and costs and may result in the volatility of the market price for our common stock and impair its future price.

We do not anticipate paying any dividends on our common stock. As a result, capital appreciation, if any, of our common stock may be your sole source of gains in the future.

     We have never paid a cash dividend, and do not anticipate paying a cash dividend in the foreseeable future. As a result, you may only receive a return on your investment in the common stock if the market price of the common stock increases.

We may underestimate the impact of new reporting company requirements.

     We recently became a reporting company as a result of our initial public offering in June 2005. As a public company, we have and will continue to incur significant accounting, legal and other expenses that we did not incur as a private company. In addition, the Sarbanes Oxley Act of 2002, as well as new rules implemented by the SEC and the NYSE, have required changes to corporate governance practices of public companies. For example, Section 404 of Sarbanes Oxley will require us to evaluate and report on our internal controls over financial reporting and have our independent auditors attest to our evaluation, beginning with our annual report on Form 10-K for the fiscal year ending December 31, 2006. If we underestimate the expense and resources spent by management involved in complying with these regulations, our financial performance may be adversely affected.

We have limited rights to use the “BankWest of Nevada” mark.

     Pursuant to a previous settlement agreement, we have agreed to use the word “BankWest” only within the name and service mark “BankWest of Nevada.” The settlement agreement covers our use of the mark only in Clark and Nye counties, Nevada. Our use of the mark “BankWest of Nevada” outside of Clark or Nye counties could result in:

• further claims of infringement, including costly litigation;

• an injunction prohibiting our proposed use of the mark; and

• the need to enter into licensing agreements, which may not be available on terms acceptable to us, if at all.

     Nevada First Bank, a wholly owned subsidiary of Intermountain, has a branch located in Reno, which is outside of Clark and Nye counties. Following consummation of the Bank of Nevada transaction, we intend to change the name of BankWest of Nevada to Bank of Nevada. If our use of the “BankWest of Nevada” mark or any other similar mark is limited or prohibited, or we are required to pay an additional license fee for such use, our business, financial condition and results of operations could be materially and adversely affected.

31

Risks Related to the Banking Industry

We operate in a highly regulated environment; changes in laws and regulations and accounting principles may adversely affect us.

     We are subject to extensive regulation, supervision, and legislation which govern almost all aspects of our operations. See “Supervision and Regulation.” The laws and regulations applicable to the banking industry could change at any time and are primarily intended for the protection of customers, depositors and the deposit insurance funds. Any changes to these laws or any applicable accounting principles could make it more difficult and expensive for us to comply and could affect the way that we conduct business, which may negatively impact our results of operations and financial condition. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors and stockholders.

Changes in interest rates could adversely affect our profitability, business and prospects.

     Increases or decreases in prevailing interest rates could have an adverse effect on our business, asset quality and prospects. Our operating income and net income depend to a great extent on our net interest margin. Net interest margin is the difference between the interest yields we receive on loans, securities and other interest earning assets and the interest rates we pay on interest bearing deposits and other liabilities. These rates are highly sensitive to many factors beyond our control, including competition, general economic conditions and monetary and fiscal policies of various governmental and regulatory authorities, including the Board of Governors of the Federal Reserve System, referred to as the FRB. If the rate of interest we pay on our interest bearing deposits and other liabilities increases more than the rate of interest we receive on loans, securities and other interest earning assets, our net interest income, and therefore our earnings, could be adversely affected. Our earnings could also be adversely affected if the rates on our loans and other investments fall more quickly than those on our deposits and other liabilities.

     In addition, loan volumes are affected by market interest rates on loans; rising interest rates generally are associated with a lower volume of loan originations while lower interest rates are usually associated with higher loan originations. Conversely, in rising interest rate environments, loan repayment rates will decline and in falling interest rate environments, loan repayment rates will increase. We cannot assure you that we will be able to minimize our interest rate risk. In addition, an increase in the general level of interest rates may adversely affect the ability of certain borrowers to pay the interest on and principal of their obligations.

     Interest rates also affect how much money we can lend. When interest rates rise, the cost of borrowing increases. Accordingly, changes in market interest rates could materially and adversely affect our net interest spread, asset quality, loan origination volume, business, financial condition, results of operations and cash flows.

We are required to maintain an allowance for loan losses. This allowance for loan losses may have to be adjusted in the future. Any adjustment to the allowance for loan losses, whether due to regulatory changes, economic changes or other factors, may affect our financial condition and earnings.

     We maintain an allowance for loan losses. The allowance is established through a provision for loan losses based on our management’s evaluation of the risks inherent in our loan portfolio and the general economy. The allowance is based upon a number of factors, including the size of the loan portfolio, asset classifications, economic trends, industry experience and trends, industry and geographic concentrations, estimated collateral values, management’s assessment of the credit risk inherent in the portfolio, historical loan loss experience and loan underwriting policies. In addition, we evaluate all loans identified as problem loans and augment the allowance based upon the perceived risks associated with those problem loans.

     The federal regulators, in reviewing our loan portfolio as part of a regulatory examination, may request us to increase our allowance for loan losses, thereby negatively affecting our financial condition and earnings at that time. Moreover, additions to the allowance may be necessary based on changes in economic and real estate market conditions, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our management’s control.

32

We are exposed to risk of environmental liabilities with respect to properties to which we take title.

     About 80% of our outstanding loan portfolio as of December 31, 2005 was secured by real estate. In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. These costs and claims could adversely affect our business and prospects.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

As of December 31, 2005, we conducted business at 16 full-service banking locations in Nevada, Arizona and California. The aggregate net book value of our premises and equipment was $58.4 million at December 31, 2005. The following table sets forth certain information with respect to our offices as of December 31, 2005.

	Owned or	Original Year
	Leased	Acquired/Term of Lease
BankWest of Nevada
Southwest Regional Office	Owned		2001
3985 S. Durango Drive
Las Vegas, NV 89147 - 4131
Henderson Regional Office	Owned		1997
2890 North Green Valley Parkway
Henderson, NV 89014 - 0400
Eastern/ Siena Heights Office	Owned		2001
10199 South Eastern Avenue
Henderson, NV 89052
Central Regional Office	Owned		2005
2700 West Sahara Avenue
Las Vegas, NV 89102 - 1700
Northwest Regional Office	Leased		6/1/98 - 5/31/2013
7251 West Lake Mead, Suite 100
Las Vegas, NV 89128 - 8351
Alliance Bank of Arizona
Phoenix Regional Office	Leased		2/1/03 - 8/1/2013
4646 E. Van Buren, #100
Phoenix, AZ 85008
Scottsdale Office	Leased		10/1/03 - 9/30/08
7373 N. Scottsdale Road, A-195
Scottsdale, AZ 85253
Phoenix Plaza	Leased		7/26/04 - 7/31/09
2901 N. Central Avenue, Suite 100
Phoenix, AZ 85012
Tucson Regional Office	Leased		11/1/03 - 10/31/2013
4703 E. Camp Lowell Office
Tucson, AZ 85712
Tucson Downtown Office	Leased		7/19/04 - 9/30/09
1 South Church Avenue, #950
Tucson, AZ 85701
Phoenix Biltmore Park Office	Owned		2005
2701 E. Camelback Road, ste.100
Phoenix, Arizona 85016
Tucson Williams Center Office	Owned		2005
200 S. Craycroft Road

33

	Owned or	Original Year
	Leased	Acquired/Term of Lease
Tucson, AZ 85711
Torrey Pines Bank
La Mesa Office	Owned		2004
8379 Center Drive
La Mesa, CA 91942
Carmel Valley Office	Leased		10/13/03 - 10/12/2013
12220 El Camino Real, Suite 100
San Diego, CA 92130
Downtown San Diego	Leased		5/1/03 - 4/30/08
550 West C Street, Suite 100
San Diego, CA 92101
Golden Triangle	Leased		08/01/05 - 07/31/2015
4350 Executive Drive, Suite 130
San Diego, CA 92121
Miller/ Russell & Associates, Inc.
Phoenix Office	Leased		09/01/05 - 08/31/10
2701 E. Camelback Road, Suite 120
Phoenix, AZ 85016
Carmel Valley Office	Leased		10/13/03 - 10/12/2013
12220 El Camino Real, Suite 100
San Diego, CA 92130
Golden Triangle	Leased		08/01/05 - 07/31/2015
4350 Executive Drive, Suite 130
San Diego, CA 92121

ITEM 3. LEGAL PROCEEDINGS

     There are no material pending legal proceedings to which Western Alliance is a party or to which any of our properties are subject. There are no material proceedings known to us to be contemplated by any governmental authority. From time to time, we are involved in a variety of litigation matters in the ordinary course of our business and anticipate that we will become involved in new litigation matters in the future.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth quarter of 2005.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The information under the caption “Market for Registrant’s Common Equity and Related Stockholder Matters” in Western Alliance’s 2005 Annual Report is incorporated by reference.

ITEM 6. SELECTED FINANCIAL DATA

     The information under the caption “Selected Financial Data” in Western Alliance’s 2005 Annual Report is incorporated by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of Western Alliance’s 2005 Annual Report is incorporated by reference.

34

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information under the caption “Quantitative and Qualitative Disclosures about Market Risk” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of Western Alliance’s 2005 Annual Report is incorporated by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Western Alliance’s Consolidated Financial Statements and the report of its independent registered public accounting firm in Western Alliance’s 2005 Annual Report are incorporated by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

     The Company’s management, including the Chief Executive Officer and Chief Financial Officer evaluated the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2005. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective. There were no significant changes in the Company’s internal controls over financial reporting that occurred during the quarter ending December 31, 2005 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

     Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information under the captions “Corporate Governance,” “Election of Directors,” “Executive Compensation” and “Section 16(a) Beneficial Ownership Reporting Compliance” is incorporated by reference from the Company’s Proxy Statement for the 2006 Annual Meeting of Shareholders, which will be filed pursuant to Regulation 14A.

     The Company has adopted a Code of Business Conduct and Ethics applicable to all of our directors and employees, including the principal executive officer, principal financial officer and principal accounting officer. A copy of the Code of Business Conduct and Ethics is filed as Exhibit 14.1 to this Report. A complete copy of the Code of Business Conduct and Ethics may be found by clicking on the “Governance Documents” link found under “Investor Relations” on the Company’s website at www.westernalliancebancorp.com. (Information from such site is not incorporated by reference into this report.) You may obtain free copies of these materials by also writing to Dale Gibbons at our principal executive offices.

35

ITEM 11. EXECUTIVE COMPENSATION

     The information under the caption “Executive Compensation” in the Company’s Proxy Statement for the 2006 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A is incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The information under the caption “Security Ownership of Management and Certain Beneficial Owners” in the Company’s Proxy Statement for the 2006 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A is incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required under the caption “Certain Transactions” and “Certain Business Relationships” contained in the Company’s Proxy Statement for the 2006 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A is incorporated by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required under the caption “Independent Auditors” contained in the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A is incorporated by reference.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     The following financial statements have been incorporated by reference from Western Alliance’s 2005 Annual Report:

     Consolidated Balance Sheets as of December 31, 2005 and 2004.

     Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003.

     Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2005, 2004 and 2003.

     Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003.

     Notes to Consolidated Financial Statements

     Report of Independent Registered Public Accounting Firm

EXHIBITS

2 .1	Agreement and Plan of Merger By and Between Western Alliance Bancorporation and Intermountain First Bancorporation (incorporated by reference to Appendix A to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
2 .2	Agreement and Plan of Merger By and Between Western Alliance Bancorporation and Bank of Nevada (incorporated by reference to Exhibit 10.13 to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
3 .1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 7, 2005).
3 .2	Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 to Western Alliance’s Form 8-K filed with the SEC on October 12, 2005).
4 .1	Form of common stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 27, 2005).
10 .1	Western Alliance Bancorporation 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 7, 2005).

36

10 .2	Form of BankWest of Nevada Incentive Stock Option Plan Agreement (incorporated by reference to Exhibit 10.3 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .3	Form of Western Alliance Incentive Stock Option Plan Agreement (incorporated by reference to Exhibit 10.4 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .4	Form of Western Alliance 2002 Stock Option Plan Agreement (incorporated by reference to Exhibit 10.5 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .5	Form of Western Alliance 2002 Stock Option Plan Agreement (with double trigger acceleration clause) (incorporated by reference to Exhibit 10.6 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .6	Form of Indemnification Agreement by and between Western Alliance Bancorporation and the following directors and officers: Messrs. Baker, Beach, Boyd, Cody, Froeschle, Gibbons, Hilton, Lundy, Mack, A. Marshall, T. Marshall, Nigro, Sarver, Snyder, Wall and Woodrum, Drs. Nagy and Nave, and Mses. Boyd Johnson and Mahan (incorporated by reference to Exhibit 10.7 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .7	Form of Non-Competition Agreement by and between Western Alliance Bancorporation and the following directors and officers: Messrs. Froeschle, Sarver, Lundy, Snyder and Woodrum (incorporated by reference to Exhibit 10.8 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .8	Form of Warrant to purchase shares of Western Alliance Bancorporation common stock, dated December 12, 2002, together with a schedule of warrantholders (incorporated by reference to Exhibit 10.9 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .9	Directors Fee Schedule (incorporated by reference to Exhibit 10.10 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .10	Summary of Compensation Arrangements with Named Executive Officers (incorporated by reference to Exhibit 10.11 to the Amendment No. 1 to Western Alliance’s Registration Statement on Form S-4 filed with the SEC on March 3, 2006).
10 .11	Intermountain Support Agreement (incorporated by reference to Exhibit 10.12 to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
10 .12	Real Estate Purchase Agreement between GRS Sahara Ave. Corp. and BankWest of Nevada (incorporated by reference to Exhibit 10.1 to Western Alliance’s Form 8-K filed with the SEC on September 26, 2005).
13 .1	Annual Report to Shareholders for the year ended December 31, 2005.
14 .1	Code of Business Conduct and Ethics.
21 .1	List of Subsidiaries of Western Alliance Bancorporation (incorporated by reference to Exhibit 21.1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
23 .1	Consent of McGladrey & Pullen, LLP.
31 .1	CEO Certification Pursuant Rule 13a-14(a)/15d-a4(a)
31 .2	CFO Certification Pursuant Rule 13a-14(a)/15d-14(a)
32	CEO and CFO Certification Pursuant 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes — Oxley Act of 2002

     Shareholders may obtain copies of exhibits by writing to: Dale Gibbons, Western Alliance Bancorporation, 2700 West Sahara Avenue, Las Vegas, Nevada 89102.

37

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WESTERN ALLIANCE BANCORPORATION
March 17, 2006	By:	/s/ Robert Sarver
		Robert Sarver
		Chairman of the Board; President and
		Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement has been signed by the following persons in their listed capacities on March 17, 2006:

Name	Title
	Chairman of the Board; President and Chief
/s/ Robert Sarver	Executive Officer (Principal Executive Officer)
Robert Sarver
	Executive Vice President and
/s/ Dale Gibbons	Chief Financial Officer (Principal Financial
	Officer)
Dale Gibbons
	Senior Vice President and Controller (Principal
/s/ Terry A. Shirey	Accounting Officer)
Terry A. Shirey
/s/ Paul Baker	Director
Paul Baker
/s/ Bruce Beach	Director
Bruce Beach
	Director
William S. Boyd
/s/ Steve Hilton	Director
Steve Hilton
/s/ Marianne Boyd Johnson	Director
Marianne Boyd Johnson
/s/ Cary Mack	Director
Cary Mack
/s/ Arthur Marshall	Director
Arthur Marshall
/s/ Todd Marshall	Director
Todd Marshall
/s/ M. Nafees Nagy, M.D.	Director
M. Nafees Nagy, M.D.
	Director
/s/ James Nave, D.V.M.
James Nave, D.V.M.
/s/ Edward Nigro	Director
Edward Nigro
/s/ Donald Snyder	Director
Donald Snyder
/s/ Larry Woodrum	Director
Larry Woodrum

38

EXHIBIT INDEX

2 .1	Agreement and Plan of Merger By and Between Western Alliance Bancorporation and Intermountain First Bancorporation (incorporated by reference to Appendix A to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
2 .2	Agreement and Plan of Merger By and Between Western Alliance Bancorporation and Bank of Nevada (incorporated by reference to Exhibit 10.13 to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
3 .1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 7, 2005).
3 .2	Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 to Western Alliance’s Form 8-K filed with the SEC on October 12, 2005).
4 .1	Form of common stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 27, 2005).
10 .1	Western Alliance Bancorporation 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on June 7, 2005).
10 .2	Form of BankWest of Nevada Incentive Stock Option Plan Agreement (incorporated by reference to Exhibit 10.3 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .3	Form of Western Alliance Incentive Stock Option Plan Agreement (incorporated by reference to Exhibit 10.4 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .4	Form of Western Alliance 2002 Stock Option Plan Agreement (incorporated by reference to Exhibit 10.5 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .5	Form of Western Alliance 2002 Stock Option Plan Agreement (with double trigger acceleration clause) (incorporated by reference to Exhibit 10.6 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .6	Form of Indemnification Agreement by and between Western Alliance Bancorporation and the following directors and officers: Messrs. Baker, Beach, Boyd, Cody, Froeschle, Gibbons, Hilton, Lundy, Mack, A. Marshall, T. Marshall, Nigro, Sarver, Snyder, Wall and Woodrum, Drs. Nagy and Nave, and Mses. Boyd Johnson and Mahan (incorporated by reference to Exhibit 10.7 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .7	Form of Non-Competition Agreement by and between Western Alliance Bancorporation and the following directors and officers: Messrs. Froeschle, Sarver, Lundy, Snyder and Woodrum (incorporated by reference to Exhibit 10.8 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .8	Form of Warrant to purchase shares of Western Alliance Bancorporation common stock, dated December 12, 2002, together with a schedule of warrantholders (incorporated by reference to Exhibit 10.9 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .9	Directors Fee Schedule (incorporated by reference to Exhibit 10.10 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
10 .10	Summary of Compensation Arrangements with Named Executive Officers (incorporated by reference to Exhibit 10.11 to the Amendment No. 1 to Western Alliance’s Registration Statement on Form S-4 filed with the SEC on March 3, 2006).
10 .11	Intermountain Support Agreement (incorporated by reference to Exhibit 10.12 to Western Alliance’s Form S-4 filed with the SEC on February 15, 2006).
10 .12	Real Estate Purchase Agreement between GRS Sahara Ave. Corp. and BankWest of Nevada (incorporated by reference to Exhibit 10.1 to Western Alliance’s Form 8-K filed with the SEC on September 26, 2005).
13 .1	Annual Report to Shareholders for the year ended December 31, 2005.
14 .1	Code of Business Conduct and Ethics.
21 .1	List of Subsidiaries of Western Alliance Bancorporation (incorporated by reference to Exhibit 21.1 to Western Alliance’s Registration Statement on Form S-1 filed with the SEC on April 28, 2005).
23 .1	Consent of McGladrey & Pullen, LLP.
31 .1	CEO Certification Pursuant Rule 13a-14(a)/15d-a4(a)
31 .2	CFO Certification Pursuant Rule 13a-14(a)/15d-14(a)
32	CEO and CFO Certification Pursuant 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes — Oxley Act of 2002

EX-13.1

                                                              EXHIBIT 13.1

                                    (GRAPHIC)

                                     WESTERN

                                    ALLIANCE

                                 BANCORPORATION

                                     ANNUAL

                                     REPORT

                                      2005



CONTENTS

                                                                           
Financial Highlights                                                           1
Chairman's Message                                                             2
Products and Services                                                          4
BankWest of Nevada President's Message                                         6
About BankWest of Nevada                                                       7
BankWest of Nevada Case Study                                                  8
Alliance Bank of Arizona President's Message                                  10
About Alliance Bank of Arizona                                                11
Alliance Bank of Arizona Case Study                                           12
Torrey Pines Bank President's Message                                         14
About Torrey Pines Bank                                                       15
Torrey Pines Bank Case Study                                                  16
Miller/Russell & Associates President's Message                               18
About Miller/Russell                                                          19
Miller/Russell & Associates Case Study                                        20
Premier Trust President's Message                                             22
About Premier Trust                                                           23
Premier Trust Case Study                                                      24
Directors and Officers                                                        26
Employees                                                                     27
Regional Offices                                                              28
Financial Report                                                              29





WESTERN ALLIANCE BANCORPORATION

FINANCIAL HIGHLIGHTS

(in thousands, except earnings per share)



BALANCE SHEET SUMMARY                    2005         2004         2003        2002        2001
- ---------------------                 ----------   ----------   ----------   --------   --------
                                                                         
Assets                                $2,857,271   $2,176,849   $1,576,773   $872,074   $602,703
Deposits                               2,393,812    1,756,036    1,094,646    720,304    549,354
Loans                                  1,793,337    1,188,535      733,078    464,355    407,210
Investments                              748,533      788,622      715,978    232,848     79,454
Total regulatory capital                 300,198      178,784      141,321    103,033     56,757
INCOME STATEMENT SUMMARY
Interest income                          134,910       90,855       53,823     39,117     35,713
Interest expense                          32,568       19,720       12,798      9,771      9,140
   Net interest income                   102,342       71,135       41,025     29,346     26,573
Provision for loan losses                  6,179        3,914        5,145      1,587      2,800
Net interest income after provision
   for loan losses                        96,163       67,221       35,880     27,759     23,773
Noninterest income                        12,138        8,726        4,270      3,935      3,437
Noninterest expense                       64,864       44,929       27,290     19,050     18,256
Income before income taxes                43,437       31,018       12,860     12,644      8,954
Income taxes                              15,372       10,961        4,171      4,235      3,001
Net income                                28,065       20,057        8,689      8,409      5,953
Diluted earnings per share                  1.24         1.09         0.59       0.78       0.54


                                   (BAR CHART)



                                2001   2002    2003     2004     2005
                                ----   ----   ------   ------   ------
                                            $ IN MILLIONS
                                                 
NET INCOME                      $6.0   $8.4   $  8.7   $ 20.1   $ 28.1
DILUTED EARNINGS
   PER SHARE                    $.54   $.78   $  .59   $ 1.09   $ 1.24
QUALIFYING REGULATORY CAPITAL
   WELL CAPITALIZED             $ 46   $ 56   $   98   $  150   $  217
   ADDITIONAL CAPITAL           $ 56   $103   $  141   $  178   $  300
ASSETS                          $407   $464   $  733   $1,189   $1,793
DEPOSITS                        $549   $720   $1,095   $1,756   $2,394
LOANS                           $602   $871   $1,577   $2,177   $2,857



                                        1



WESTERN ALLIANCE BANCORPORATION

CHAIRMAN'S MESSAGE
To Our Shareholders

                                 (PHOTO OF ROBERT SARVER)

                                 Chairman, President and Chief Executive Officer

     The year 2005 was a milestone for Western Alliance Bancorporation. It was
the year in which we completed our Initial Public Offering to trade on the New
York Stock Exchange and our twelfth consecutive year of record earnings. On
behalf of the Western Alliance team, I want to welcome you to our first annual
report as a public company.

     Western Alliance Bancorporation reported net income of $28.1 million for
the year ended December 31, 2005, an increase of 39.9 percent from $20.1 million
reported in 2004, or $1.24 per share, up from $1.09 for 2004. Loans rose $605
million, or 51 percent to $1.79 billion in 2005 from the $1.19 billion posted a
year earlier and deposits grew to $2.39 billion, up 36 percent, or $638 million
from 2004.

     BankWest of Nevada reported loan growth of $293 million for 2005 to $1.08
billion. Deposits increased $319 million to $1.61 billion and net income was
$25.3 million, up 24.7 percent from $20.3 million in 2004.

     Alliance Bank of Arizona reported loan growth of $171 million for 2005 to
$405 million. Deposits increased $180 million to $457 million and net income was
$3.0 million, up 257.6 percent from $0.8 million in 2004.

     Torrey Pines Bank reported loan growth of $141 million for 2005 to $305
million. Deposits increased $136 million to $335 million. For the year, net
income was $2.2 million, up 116.3 percent from $1.0 million in 2004.

     Assets under management at Miller/Russell and Associates were $1.11 billion
at December 31, 2005, up 40.3 percent from $791 million at December 31, 2004. At
Premier Trust, assets under management increased 65.0 percent from $80 million
to $132 million from December 31, 2004 to December 31, 2005. Total trust assets
increased 42.3 percent from $208 million to $296 million for the same periods,
respectively.

     Our proven business strategy of focusing on high-growth markets with
compelling demographics, entering new markets through de novo offices and
appropriately priced acquisitions, and leveraging competitive advantages is
manifesting eminent success.


                                        2



WESTERN ALLIANCE BANCORPORATION

     The primary markets in which Western Alliance operates, Las Vegas, San
Diego, Phoenix and Tucson have household incomes and projected population growth
rates that substantially exceed the national average.

     The selection of these markets is a critical component of our overall
business strategy. Western Alliance's competitive advantages of strong local
banking relationships, comprehensive market knowledge and a culture of
flexibility with a rapid response to customer needs provides us with an
exceptionally strong and enduring basis for growth in these markets, as well as
a dynamic that allows us to quickly avail ourselves of new opportunities that
arise.

     Early in 2006, we followed that strategy with two significant acquisitions
that are expected to close in the first half of 2006, in part, using the $85.1
million in proceeds from our initial public offering, which closed July 6, 2005.

     In a cash and stock transaction valued at approximately $110 million,
Western Alliance will acquire Intermountain First Bancorp, the parent company of
Nevada First Bank. Intermountain First had deposits of $396 million, loans of
$374 million and stockholders' equity of $32 million at December 31, 2005. We
also signed a definitive agreement valued at approximately $74 million to
acquire Bank of Nevada, which had deposits of $254 million, loans of $217
million, and stockholder's equity of $26 million at the close of 2005.

     These mergers will allow us to further solidify and broaden our already
strong position in Las Vegas and Henderson, Nevada as well as expand our
financial offerings into Reno and Mesquite. By the end of 2006, we expect to
have 18 offices in Nevada, more than triple the five we had when the year began.

     In 2006, we will continue to provide exceptional service to our clients,
expand our current operations with the addition of nine new offices, and to seek
further opportunities for expansion through acquisitions.

     In closing, I want thank our customers, our employees and our board of
directors for their loyalty, support and dedication.


/s/ Robert Sarver
- -------------------------------------
Robert Sarver
Chairman, President
and Chief Executive Officer

                                   (BAR CHART)



                          2001    2002    2003    2004    2005
                         ------  ------  ------  ------  ------
                                          
NUMBER OF OFFICES             4       5      10      13      16
DEPOSIT ACCOUNTS         14,499  15,361  18,364  22,424  26,845
NON-PERFORMING ASSETS
   PERCENTAGE OF TOTAL      .17     .41     .02     .07       0



                                        3



WESTERN ALLIANCE BANCORPORATION

PRODUCTS AND SERVICES                                                  (GRAPHIC)

     As the parent corporation of three of the nation's leading community banks
and two major regional financial services firms, Western Alliance
Bancorporation's strategic approach to managing its operating units is designed
to provide profound and dynamic synergies among these businesses, based on
strong, experienced and innovative management dedicated to the highest level of
customer service.

     Our mission and objective is simple: Provide our customers and markets with
products and services that serve as a benchmark for the banking industry and
deliver them with a dispatch and efficiency that is unrivaled.

     Our strategy to accomplish this is core to our business: We employ
experienced local relationship bankers and associates who drive success with our
broad range of product and service offerings.

     Several Western Alliance products that came online over the past two years
have now ramped up fully and are yielding the customer benefits and revenues we
had anticipated.

     The development of our cash management products, specifically our lockbox
offering which provides businesses and professionals with an efficient tool to
collect and process receivables, has been very well received by the business
community. We also provide commercial products that include Cash Concentration
Accounts, which allow a customer to combine accounts from several locations into
a single account, and Positive Pay, a fraud protection tool geared toward
commercial accounts.

     In March 2006, each of the Western Alliance banks began offering their own
credit cards. These cards provide substantially better benefits to our customers
than the third party cards offered previously, including lower interest rates,
DreamMiles(R) and online access. By bringing this product in-house, Western
Alliance will also enhance its revenue stream with interchange fees and interest
income.


                                        4



"2005 was not only a year in which we broadened our business banking
services, but also one in which we enhanced our personal banking services."

     We continue to make products and services available to the "Not for Profit"
segment of the market comprising churches, synagogues, schools, colleges and
municipalities and provide a comprehensive range of business services to the
religious community, as well as other non-profits.

     While our broad menu of products would be impressive anywhere, it is the
high caliber of personal banking service with which we deliver these products
that drives our success. Our experienced relationship bankers know the
importance of personal service and the culture of Western Alliance
Bancorporation strongly fosters that service. That perspective drove our success
in 2005 and will continue to do so in the coming year.

WEALTH MANAGEMENT
Estate Planning
Asset Allocation
Retirement Accounts
Investment Management
Trust Administration
Escrow & Custody

REAL ESTATE DEVELOPMENT
Construction Loans
Permanent Financing
Fixed and Floating
Owner-occupied
Subdivisions
Lot Financing

CASH MANAGEMENT
Lockbox & EDI
Positive Pay
Concentration Accounts
Sweep Services
Image & CD Services

PERSONAL BANKING
Free ATMs Worldwide
Online Banking
Mortgages
Equity Credit Lines
Leisure Craft
Cards & Cars

NOT FOR PROFIT
Churches & Synagogues
Schools & Colleges
Municipalities
Tax-exempt

COMMERCIAL LENDING
Working Capital Financing
Corporate Credit Cards
Participations and Syndications
SBA Preferred
Equipment Leasing
Merchant Services
Letters of Credit
Revolving Lines of Credit

                                                                       (GRAPHIC)


                                       5



BANKWEST OF NEVADA

PRESIDENT'S MESSAGE                        (PHOTO OF LARRY WOODRUM)

                                           President and Chief Executive Officer

     In 2005, while we continued our fast pace of growth, we remained committed
to our fundamental strategy: to build our business through our reputation for
delivering superior service and solutions as the financial business partner of
choice for local businesses, professionals and community organizations.

     Sustaining and growing that reputation has been made possible by our
people. We are fortunate to have recruited and retained an outstanding team who
can take pride in contributing to the success of our organization through their
knowledge and commitment to serving our customers. I am particularly proud that
our Community Reinvestment Act rating has been "Outstanding" since the bank
began.

     Since our inception, we have promoted a basic, but time-tested credo that
has been the cornerstone of our service philosophy: simply, treat others as you
would want to be treated. Not a sophisticated strategy, but one that has worked
to help bring us a broad base of loyal clients. While we look forward to the
future and changes that improve what we provide to our customers, in this
philosophy we remain constant, a course that has served us well with both our
relationships with our customers and among ourselves.


/s/ Larry Woodrum
- -------------------------------------
Larry Woodrum
President and Chief Executive Officer

                                   (BAR CHART)



           2001   2002    2003     2004     2005
           ----   ----   ------   ------   ------
                        $ IN MILLIONS
                            
LOANS      $407   $464   $  558   $  790   $1,084
DEPOSITS   $549   $757   $  918   $1,288   $1,607
ASSETS     $602   $869   $1,245   $1,578   $1,887



                                       6



BANKWEST OF NEVADA

ABOUT US

                                        (PHOTO OF BOARD OF DIRECTORS)

                                        (front row, l to r) Sherry Colquitt,
                                        James Nave, DVM, Edward Nigro, Larry
                                        Woodrum, Chairman Arthur Marshall,
                                        Marianne Boyd Johnson, (middle row) Todd
                                        Marshall, Jack Wallis, Donald Snyder, M.
                                        Nafees Nagy, MD, Robert Sarver. (back
                                        row) Robert Clark, Bruno Mark, Robert
                                        Boughner.

     For BankWest of Nevada, 2005 was a highly successful year both in terms of
results and in laying the foundation for increased efficiency and expansion. The
hard work of our staff resulted in growth in net earnings of more than $5
million. Assets rose by more than $308 million, an increase of 20 percent. Loan
growth exceeded $290 million, an increase of 37 percent and deposits more than
$319 million, an increase of 25 percent. We also improved our efficiency ratio
to 46.0 percent, while increasing our staff by 13 percent with 39 new employees.

     To continue to reach Las Vegas' rapidly growing suburban areas, we began
construction of three new branch locations, including our Centennial, Aliante
and Warm Springs offices. In November, we also launched a new 36,000 square foot
operations center which will be home to the customer service center, electronic
banking, network administration, courier service, lockbox, data processing and
central vault. We expect to open this state-of-the-art facility later this year.

     To increase commercial loans and promote cross-selling opportunities, in
April the Bank initiated a small business lending campaign, focusing on loans up
to $250,000. Promoted as "Decision 23," the two-month campaign resulted in loans
of more than $14 million, exceeding the $8 million goal. Marketing included
billboards, print advertising, application brochures and employee incentives.
The Bank continued to build its affiliate referral relationships with
Miller/Russell and Premier Trust to cross sell our banking products while the
Bank promoted wealth management as a valued addition to our capabilities to
serve all their financial needs.

     Launched in July, the Bank participated in the sponsorship of the new Las
Vegas Monorail. As part of the Bank's commitment to the Las Vegas community and
to promote Bank awareness, the Bank became a sponsorship partner providing ATMs
at each location and enjoys the visibility of a signature BankWest of Nevada
Monorail train. The 4.4 mile route Monorail system runs along Las Vegas' famed
resort corridor connecting major resorts and convention space.

(GRAPHIC)


                                       7



BANKWEST OF NEVADA

NEVADA PARTNERS
A BankWest Case study in Community Responsibility

                                        (PHOTO)

                                        Hospitality industry student training at
                                        Nevada Partners' Culinary Training
                                        Academy.

     In 1993, the nonprofit organization of Nevada Partners was formed with a
clear stated mission-- "to eliminate poverty." Supported by major hospitality
industry employers, Nevada Partners began by providing unskilled workers with
training to meet the employment demands of Las Vegas' booming hospitality
industry. Training initially focused on developing culinary and later,
housekeeping skills, when a move into a leased facility allowed the organization
to create mock hotel rooms replicating those in Las Vegas casinos.

     Seven years later, Nevada Partners' training programs had generated such
great demand and extraordinary success that the growth required the construction
of a larger facility.

     With a preliminary estimate of $2 million to construct the new kitchen
training facility, Nevada Partners' Executive Director Steven Horsford reached
out to large and small banks for financing.

     "We knew we had a complicated income stream and that the financial analysis
would not be an easy undertaking for a financial institution. BankWest was the
only bank that responded to us. We were especially pleased that BankWest's point
men, Brad Tope and Mark Larson, from the outset, wanted to learn about us in
depth, and clearly understand what we wanted to accomplish."

                                        Learning housekeeping skills at Nevada
                                        Partners' Culinary Training Academy.

                                        (PHOTO)


                                        8



"...in part because of the completion of the kitchen facility, $5.5 million in
public funds have now been granted to complete the full training center."

                                        (GRAPHIC)

                                        Nevada Partners Center, Las Vegas
                                        Headquarters.

     By the end of the process, BankWest provided $3 million in financing that
was applied to the construction of a 12,000 square foot state-of-the-art
training kitchen. Enabled in part because of the completion of the kitchen
facility, $5.5 million in public funds have now been granted to complete the
full training center.

     With Nevada Partners' final funding in place, Horsford pointed out that the
organization is able to consider new possibilities, including affordable
housing. "We've never had a banking relationship like with we have with
BankWest," Horsford said. "BankWest continues to seek ways to help us with other
initiatives. Since we're going to be paying interest to somebody, Horsford
notes, "we'd much rather be paying it to BankWest because of the level of
service it provides."

Front: Mark Larson, BankWest of Nevada, Executive Vice President and Regional
President, Northwest Regional Office, Steven Horsford, Chief Executive Officer,
Nevada Partners, Brad Tope, Senior Vice President, Regional Chief Lending
Officer, Northwest Regional Office, BankWest of Nevada. Back: Nevada Partners'
Culinary Training Academy students.

(PHOTO)


                                        9



ALLIANCE BANK OF ARIZONA

PRESIDENT'S MESSAGE                        (PHOTO OF JIM LUNDY)

                                           President and Chief Executive Officer

     Alliance Bank continued to demonstrate why it is one of the fastest-growing
banks in the United States during 2005 with strong regional growth. And, as a
result of our progress, we achieved several significant milestones in 2005.

     Alliance Bank surpassed $500 million in total assets just 29 months after
its founding in 2003 and opened a new corporate headquarters in the high-growth,
financial Biltmore district in Phoenix and a third Tucson location, bringing the
total number of statewide offices to seven. The bank also grew to 122 employees
strong during 2005, from 79 employees in 2004.

     The banks Small Business Administration (SBA) Department expanded it's
Preferred Lender (PLP) Status to San Diego and Nevada and was recognized by the
SBA as leading all Arizona banks with the No. 1 ranking for "Most Jobs Created
and/or Retained per SBA loan: 57.4 jobs per loan."

     Our experienced team continued to expand with the additions of several
prominent senior bankers, as well as the addition of two new board
members--Sharon Harper, President and Chief Executive Officer of The Plaza
Companies in Phoenix and Paul Weitman, President and Owner of Royal Automotive
Group in Tucson.

     During 2006, Alliance Bank will expand three of its existing offices and
will open a new office in Downtown Phoenix to better serve our growing
professional client base in the downtown sector. Construction will also begin on
our new Mesa office which will be Alliance Banks first presence in the
high-growth region of the East Valley of Metro Phoenix. We will continue to look
for additional locations in each of our primary markets.

     On behalf of our Board, our stockholders and our employees, I'd like to
thank all of our customers who have made our success possible.


/s/ James H. Lundy
- -------------------------------------
James H. Lundy,
President and Chief Executive Officer


                                       10



ALLIANCE BANK OF ARIZONA

ABOUT US                                (PHOTO OF BOARD OF DIRECTORS)

                                        (l to r) Bruce Beach, Thomas Rogers,
                                        Dennis Miller, Chairman Richard Krivel,
                                        Steven Hilton, James Lundy, Francis
                                        Najafi, Duane Froeschle, R. Luther
                                        Olson, Thomas Sullivan, Jr., Robert
                                        Sarver. Not shown: Paul Baker, Sharon
                                        Harper, Paul Weitman.

     Alliance Bank of Arizona opened in February 2003 and has quickly become one
of the nation's fastest-growing banks. As of September 2005, Alliance Bank was
the fourth largest of more than 100 banks opened in 2003. This achievement
underscores the value Alliance Bank's customers place on "better banking" and a
regional focus delivered by experienced, relationship bankers.

     With seven statewide offices located in Phoenix, Scottsdale and Tucson,
Alliance Bank continues to expand its reach by skillfully addressing the
specific needs of Arizona's businesses, real estate developers, professionals
and individuals seeking a personal banking relationship. Local decision-making
and veteran banking leadership enable Alliance Bank to be a "business partner"
by providing flexible and customized services tailored to the specific needs of
its clients.

     Alliance Bank of Arizona is strongly positioned as a "super community" bank
to provide relationship-based, personal service, the latest in technology and
lending capabilities sufficient to meet the needs of virtually any Arizona-based
business.

(GRAPHIC)

                                   (BAR CHART)



                2003   2004   2005
                ----   ----   ----
                   $ IN MILLIONS
                     
LOANS           $106   $234   $405
DEPOSITS        $116   $277   $457
ASSETS          $187   $333   $520



                                       11



ALLIANCE BANK OF ARIZONA

THE LANDSCAPE BROKER
Digging up Financing -- An Alliance Bank Case Study

                                                       (GRAPHIC)

                                                       Streetscape at Mirabel,
                                                       North Scottsdale Arizona.

     It's easy to get a loan when your business is doing well and times are
good," said Chris Besing, Owner of Scottsdale-based The Landscape Broker, Inc.
"But the real test of a banking relationship occurs when you need financing to
acquire or dramatically expand your business during the rough times."

     For Mr. Besing, Alliance Bank of Arizona came through when he needed it
most and one year after one of the most difficult transactions of his career in
finance. He confidently says that Alliance Bank's performance and service has
earned the bank any future business from his company.

     After two decades as a financial executive, Besing was ready to return to
the roots--literally. In July 2004, he traded his suit and tie for jeans and
work boots when he began negotiations to purchase a landscape company in
Scottsdale. In September 2004, he entered into a purchase agreement for the $5
million deal with another lender.

     According to Besing, a key component of the deal was the repayment of
principal based on cash flow related to $2.2 million of subordinated debt raised
by Besing. Three months into the arduous process and only one month prior to
closing, the lender elected to substantially change the repayment terms of the
SBA loan and sub-debt. Besing presumed the deal was lost--enter Alliance Bank of
Arizona.

     Based on a previous banking relationship and through a colleague's
recommendation, Besing contacted Ed Zito, a senior vice president for Alliance
Bank and a prominent face in Phoenix banking. Mr. Zito and Ben Danner, senior
vice president and commercial banking manager for Alliance's Scottsdale office,
met with Besing to discuss his situation.

     "The Alliance Bank of Arizona team immediately took the time to understand
my business, the local business environment and the financing options
available," commented Besing. "Alliance Bank restructured the deal to include an
innovative bridge loan that enabled the deal to close on time with a prudent,
but workable financing package. Their ability to think 'out of the box' was very
impressive."


                                       12



"They really put forth a great effort for me and my company and, as a business
owner, that's something I remember and appreciate."

                                   (GRAPHIC)

                                   Excavation work at Vistancia, Peoria Arizona.

     Danner and the SBA Department at Alliance Bank used their expertise to
accelerate the transaction process to save the deal and close Besing's purchase.
With a collective team effort led by Danner, SBA Manager Ruth Giovacchini and
Senior Processor Irma Rodriguez, the bank was able to provide an additional
$500,000 in financing that the previous lender had overlooked.

     Today, just over one year after becoming an Alliance Bank client, Besing's
Landscape Broker Inc. is thriving. The company generated more than $8 million in
revenue in 2005 and expects that amount to double in 2006. In addition to the
SBA loan, Besing's company keeps an operating line of credit and all of its
business checking accounts with Alliance Bank. He's also become one of the
bank's best referral sources, telling anyone who will listen that a good
business banker can make a real difference to the local business owner.

     "Relationships matter," adds Besing. "Alliance Bank proved they have the
expertise to get a difficult deal done, but more importantly, they stepped up as
a business partner with their relationship-based banking style. They really put
forth a great effort for me and my company and, as a business owner, that's
something I remember and appreciate."

Club House at Mirabel, Scottsdale, Arizona.

(GRAPHIC)


                                       13



TORREY PINES BANK

PRESIDENT'S MESSAGE

                                                            (PHOTO OF GARY CADY)

                                                            President

     At Torrey Pines Bank we spend a lot of our time talking to our customers.
Then we respond to our customers' needs in ways that may appear unconventional
to some, but going the extra mile for customers is how we measure our success at
Torrey Pines Bank.

     When we established Torrey Pines Bank in 2003 our plan was to achieve
steady and structured growth by employing a talented work force with a singular
focus on a level of service that would provide our customers with the best
possible client-banking relationship and banking experience.

     Our executives and team, from the outset, have put our clients front and
center with professional attention and tailor-made solutions. This distinctive
approach has enabled us to achieve continued strong deposit and loan growth.

     Looking ahead, we will continue our growth efforts by building upon our
suite of consumer products and services that will enable us to deepen existing
and generate new relationships.

     Success won't be ours alone. We are a compassionate corporate citizen who
partners with many not-for-profit organizations to promote a healthier, more
vibrant San Diego County. We will bring the distinguishing strengths of this
organization to two new locations in 2006, with additional locations to follow
in 2007.

     Our customers and staff are the very pulse of this organization. Through
their conversations we are assured that our business strategy continues to meet
the needs of our clients and community. That's what makes us special. And our
conversations will continue to be at the forefront of Torrey Pines Bank.


/s/ GARY CADY
- ---------------------------------
Gary Cady,
President


                                       14



TORREY PINES BANK

ABOUT US

                                        (PHOTO OF BOARD OF DIRECTORS)

                                        (l to r) Jason Hughes, Gary Cady,
                                        Chairman Robert Sarver, Cary Mack, Peter
                                        Davis, Sheryl White, Richard Doan, Mark
                                        Schlossberg, Mark Johnson, Tom Murray.

     Torrey Pines Bank is focused on serving San Diego's business and
professional communities with offices strategically located in downtown San
Diego, Carmel Valley, Golden Triangle and La Mesa. Soon, Torrey Pines will offer
and additional location downtown, as well as in Kearny Mesa and Carlsbad,
California.

     Unlike many financial institutions that are built around "business units,"
Torrey Pines Bank is operated geographically and managed by local professionals
who are directly and actively involved in their respective communities. The
geographic management structure, coupled with dedicated customer attention
creates an unrivaled banking model that clients, current and prospective, are
seeking from their banking partner.

     Torrey Pines Bank continually supports its customer service claim with a
steady stream of testimonials from clients in the medical and legal community to
business owners and not-for-profit executives. Our clients have said "We think
of our relationship with Torrey Pines Bank as a partnership. We know we can
depend on Torrey Pines executives for their expertise, their personal attention
and their willingness to go the "extra mile."

     Big bank capabilities, small bank personal attention and a single point of
contact are the attributes that make Torrey Pines Bank especially appealing to
clients.

(GRAPHIC)



           2003   2004   2005
           ----   ----   ----
              $ IN MILLIONS
                
LOANS      $ 69   $164   $305
DEPOSITS   $ 82   $199   $335
ASSETS     $157   $258   $405



                                       15



TORREY PINES BANK

J.R. FILANC CONSTRUCTION COMPANY

A Torrey Pines Bank Case Study in Time Critical Conditions

     J.R. Filanc Construction Company was founded in 1952 providing construction
project services to the water infrastructure industry. It's J.R. Filanc
Construction Company that builds many of our waste water treatment plants, water
treatment facilities and the like. The company is strategically managed by its
ownership team, including Filanc family members and senior managers.

     Over the last 53 years, J.R. Filanc has grown to be a company of
substantial dimension, with revenues of approximately $100 million and over 350
employees throughout Southern California and Arizona. The company, at any time,
manages eight to ten large projects averaging $40 million each.

     In early 2005 the company realized the need and opportunity to acquire a
new headquarters building in North San Diego County. The acquisition was the
front end of a time-critical, 1031 reverse exchange in which the company
acquires a "replacement" property for one to be sold later.

     As one of the Bank's first clients, J.R. Filanc approached Torrey Pines
Bank for financing. There was a lot to do and little time in which to do it. And
in this case, because of the IRS regulations associated with the transactions,
there would be virtually no room for any of the providers not to make this
transaction their top priority.

     The time contraint, just 30 days, propelled John Massab, Senior Vice
President of the Torrey Pines, and his team into high gear on this proposed $4.5
million transaction. The timing and coordinating efforts with external
professionals who hold busy schedules were vital and presented a challenge.

     It was a complex transaction, but within a remarkably short period of time,
the Torrey Pines' team obtained and reviewed the appraisal, an environmental
study with a last minute geophysical test, as well as an abundance of other
legal and compliance documents. The team included Torrey Pines' executives, its
legal counsel, Head of Operations, a credit analyst who provided the reverse
exchange research, a documentation specialist and a closing agent.


                                       16



" A lot of other banks want to shoehorn you into their system that fits their
computer programs and simply look at numbers only."

     If all of this sounds like a "too many cooks" situation, consider what
Cathy Final, Chief Financial Officer of J.R. Filanc said: "John Massab commits
and moves more quickly and timely than any other banker I've ever known." This
speaks well of the local decision-making strategy employed at Torrey Pines Bank.

     According to Ms. Final, "A lot of other banks want to shoehorn you into
their system that fits their computer programs and simply look at numbers only.
That's a formula for making a difficult transaction almost impossible. Torrey
Pines mode of operation is to make things as straight forward as possible with
the least use of my time, which benefits me because I can devote my time to my
'real' job at J.R. Filanc."

     "From the very outset of our relationship with Torrey Pines," Ms. Final
said, "we saw the difference between the machine touch and the personal touch in
doing business with Torrey Pines. They are, indeed, our business partner as well
as our bank and showed it clearly when John and his team completed this
transaction in the critical time frame required."

J. R. Filanc Construction project for the R.M. Levy Water Treatment Plant
Upgrade, Expansion and Ozonation Facility in Southern California. The $38.4
million project, completed in 2002, was managed by Mark Filanc, Executive Vice
President, Filanc.

(GRAPHIC)


                                       17



MILLER/RUSSELL & ASSOCIATES, INC.

PRESIDENT'S MESSAGE                                     (PHOTO OF DENNIS MILLER)

                                                        President

     In reflecting on 2005, I am very pleased with the forward progress
generated by the Miller/Russell team. This was our first full year as a Western
Alliance Bancorporation operating unit and our client base expanded
significantly, largely due to referrals from bank officers which helped to
increase our assets under management during the year by 40.3 percent to $1.11
billion.

     During 2005, we opened new offices in San Diego and Las Vegas, bringing us
physically closer to BankWest of Nevada, Torrey Pines Bank and Premier Trust in
those locations, as well as expanded our Arizona presence with a new office in
Tucson.

     Major strides were made in enhancing our compliance and regulatory
procedures, budgeting, administrative services and processes, and technology. We
anticipate that this investment will pay considerable dividends well into the
future.

     The accumulation of wealth in our nation, both private and institutional,
is at historic highs and continues to rise. With a strong economy and aging
population we see the trend continuing into 2006. As a provider of wealth
management services to individuals, corporations, endowments and foundations,
Miller/Russell is now strongly positioned to prosper from this rising pool of
wealth. As such, we look forward to the coming year with enthusiasm and
excitement.


/s/ Dennis Miller
- -------------------------------------
Dennis Miller
President


                                       18



ABOUT US

" We add significant value to our client base by offering financial planning
including retirement, insurance, tax and estate planning..."

     Strategy, structure, discipline and innovation are the keystones of
Miller/Russell's approach to investment management and counsel. They provide the
firm with the tools to achieve its stated mission: The achievement of investment
goals by controlling risk and delivering above-average returns, with
above-average consistency.

     Founded in 1991, and now with more than $1 billion in asstes under
management, Miller/Russell has grown to one of the Southwest's largest
registered investment advisory and wealth management firms.

     In 2004, Western Alliance Bancorporation recognized its customers' need for
high level, strategic financial management and acquired Miller/Russell. Since
the acquisition Miller/Russell's services have achieved the synergies
anticipated and touched virtually all of the Western Alliance operating units.

     Using state of the art technology tools, combined with solid analytics and
process discipline implemented and managed by a team of experienced
professionals, Miller/Russell tailors investment solutions to meet its clients'
precise needs and achieve their objectives.

     As strategic wealth architects, Miller/Russell add significant value to its
client base by offering financial planning including retirement, insurance, tax
and estate planning, as well as providing the very strong synergies necessary to
ensure the growth of Western Alliance Bancorporation and its operating units.

(GRAPHIC)

                                   (BAR CHART)



                          2002   2003   2004    2005
                          ----   ----   ----   ------
                                 $ IN MILLIONS
                                   
ASSETS UNDER MANAGEMENT   $445   $601   $791   $1,110



                                       19



MILLER/RUSSELL & ASSOCIATES, INC.

CRAGIN & PIKE
Synergism -- A Miller/Russell Case Study

                                                     (PHOTO OF TOM KERESTESI)

                                                     Tom Kerestesi, President of
                                                     Cragin & Pike.

     Cragin & Pike, Las Vegas' oldest full service property and casualty
insurance broker, has been operating continuously in Las Vegas since 1909, just
a few years after the city was founded. The firm's offerings comprise both
personal and commercial lines, as well as bonding, but weighted primarily toward
commercial accounts.

     It was a key Western Alliance Bancorporation strategy, hiring experienced,
local relationship bankers with a solid book of business, that first brought
Cragin & Pike into the Western Alliance fold. Originally banking with another
institution, Tom Kerestesi, President, said Cragin & Pike first became involved
with Western Alliance Bancorporation when his banker moved several years ago to
BankWest of Nevada.

     "On a parallel course with our commercial banking, we had some requirements
for other financial services," Mr. Kerestesi explained. "Cragin & Pike has had
employee benefit plans in effect for more than three decades, but with all the
changes that occurred over the past few years with the Employment Retirement
Income Security Act (ERISA), we had some concerns about compliance issues," he
pointed out.

     "We had a long term relationship with another investment advisor," Mr.
Kerestesi said, "but we wanted to ensure our compliance and turned to Western
Alliance's Premier Trust, with which several of our executives had personal
relationships. As part of the compliance review, Premier provided cursory
opinion on the investment performance of the assets and pointed out that the
performance could have been better. "If you'd like to see how that might play
out," Premier Trust said, "You might want to talk to Miller/Russell, the
investment advisory component of Western Alliance."

     Cragin & Pike accepted the invitation and Dennis Miller, Miller/Russell
President, and Chris Wilkinson, an Investment Advisor, then made a comprehensive
presentation. "It was a compelling argument to change firms," Mr. Kerestesi
said, and we subsequently terminated our 30 year relationship with our old firm
and retained Miller/Russell in the fall of 2005."


                                       20



"It was a key Western Alliance Bancorporation strategy, hiring experienced,
local relationship bankers with a solid book for business..."

     But it wasn't simply dollars and cents that sealed the deal. "We had a
broader discussion of investment and compliance comprising the most minute
details: Who should be on the investment committee and meeting frequency, as
well as investment objectives, how to raise the quality of the plan," Mr.
Kerestesi said.

     Miller/Russell developed a sophisticated financial model for the Cragin &
Pike portfolio that balanced risk tolerance, long term objectives, peer group
analysis and a balance between equity and bonds. That model was the point of
departure for discussions with the new client, and together a strategic
investment plan, was put in place that met Cragin & Pike's objectives, just 30
days following their first meeting.

     Cragin & Pike has quarterly meetings with Miller/Russell to ensure strategy
is on course. During those meetings, the investment advisory firm outlines
investment portfolio performance and discusses specific metrics for each
portfolio manager, with benchmarks. Additionally, the investment philosophy
within confines of ERISA is reviewed. If there are concerns with the plan, they
are addressed with alacrity and adjustments from the investment fiduciary
perspective are made if required.

     "It is an environment and a way of doing business that allows us a clear
path to grow our business without being distracted by the performance of our
employee benefit plan," Mr. Kerestesi said.


                                       21



PREMIER TRUST

PRESIDENT'S MESSAGE

                                                       (PHOTO OF MARK DRESCHLER)

                                                       President

     With the completion of our 4th year of business and 2nd year with Western
Alliance, Premier Trust continues to show significant growth in its revenue and
assets. In 2005, and into 2006, we have seen an increase in momentum, especially
from the professional community. Moreover, our colleagues at BankWest of Nevada
consistently show strong support through referrals for our fiduciary services.

     Last year, we established a new office in Phoenix, Arizona, in the same
business complex as Alliance Bank of Arizona and Miller/Russell. We anticipate
the Camelback Road location will generate great synergies because of our close
working relationship, and of course, the proximity. We are working closely with
our Arizona partners to build referrals and are seeing good progress in
generating recognition in this large and competitive market for financial
services.

     Our staff's commitment to customer service has developed many loyal
clients and we continue to seek better and more efficient ways to incorporate
our comprehensive systems technology. For example, our client's now have the
ability to access their accounts online.

     We look forward to enhancing our relationship with the entire Western
Alliance family, as 2005 resulted in referring some very large and solid
relationships to them. We also developed a family of funds to use in our smaller
discretionary accounts and began utilizing Miller/Russell's excellent
performance record for our clients. This will continue to expand as we accept
more managed trusts in our company.


/s/ Mark Dreschler
- -------------------------------------
Mark Dreschler
President


                                       22



ABOUT US

"...we have seen a steady increase in the amount and quality of referrals we
receive from the various senior level bankers."

     Premier Trust was established in 2001 to provide quality, responsive and
localized fiduciary services to the Las Vegas market. From the outset, our
strategy was to establish relationships with local independent banks, which did
not have trustee powers, to provide them and their customers our services.
BankWest of Nevada was one such bank and thus began our very successful
relationship.

     In the second year of that relationship, BankWest made a decision to offer
exclusive trust services to its growing client base. Subsequently, Premier Trust
was acquired by Western Alliance, and for the past two years we have seen a
steady increase in the amount and quality of referrals we receive from the
various senior level bankers, not only from BankWest, but also from all of the
other operating units in the Western Alliance enterprise, as well as attorneys
and accountants whose main line of business is Trust related planning.

     From the Premier Trust perspective, as well as from that of the banking
industry, the banker's relationship with their client is enhanced whenever the
fiduciary component is added, as well as on the business side with Premier's
Employee Benefit Division. Moreover, there is clear added value throughout the
Western Alliance enterprise with this very personal side of the financial
services business.

                                   (BAR CHART)



               2002   2003   2004   2005
               ----   ----   ----   ----
                     $ IN MILLIONS
                        
TRUST ASSETS    $49   $104   $208   $296



                                       23



PREMIER TRUST

TEACHERS HEALTH TRUST
A Premier Trust Case Study in the Benefits of Synergy

                                                                         (PHOTO)

     Teachers Health Trust, a client of Premier Trust, is both a study in
fiduciary management and in synergy, as it is a case that involves a Western
Alliance bank, Miller/Russell, and of course, Premier Trust. Teachers Health
Trust is a pension plan for the employees administering the Nevada Teachers
Pension Plans.

     Premier Trust's relationship with Teachers Health Trust evolved over many
years as executives at Premier Trust and BankWest of Nevada had extended
relationships with Teachers' predecessor.

     The Premier Trust relationship really began at the confluence of two
seemingly unrelated events. Jerrie Merritt joined BankWest a couple of years
earlier, bringing with her a banking relationship with Teachers Health. At the
same time, Premier Trust was expanding its offerings from personal trusts,
adding employee benefit services as a consequence of becoming part of the
Western Alliance family.

     Knowing that Teachers Health was dissatisfied with its Trust company at the
time, Jerrie met with Mark Dreschler, Premier Trusts Chief Executive Officer, to
explore the possibility of providing benefit services to Teachers Health Trust.

     A meeting was arranged with Peter Alpert, Teachers Health Chief Executive,
at which Premier Trust discerned the challenges Teachers was facing and the
requirements it had for its benefits plan. With employee benefit specialist Tom
Rhees, Premier Trust met several times with Teachers presenting successively
refined and well-honed plans and strategies outlining how Premier would
administer Teachers benefit plan.


                                       24



"...Premier Trust engaged in several meetings with Teachers during which they
presented successively refined and well-honed plans..."

                                                                         (PHOTO)

     Early in 2005, Premier Trust was engaged by Teachers Health and immediately
initiated its outlined strategy through a series of meetings with employees to
explain the plan and their investment options.

     Just a few months later, Premier discussed with Peter Alpert the potential
investment risk inherent in Teachers' pension plan and arranged a meeting with
Dennis Miller, Miller/Russell Chief Executive Officer, who presented a new
strategy for Teachers Health investments. Again, Teachers Health found the
presentation compelling and engaged Miller/Russell.

     As a result of a strong, personal banking relationship, and a Western
Alliance strategy of a synergistic approach to business, Teachers Health Trust
is now working with three Western Alliance operating units: Premier Trust,
BankWest of Nevada and Miller/Russell. This is clearly a story of how the
overall Western Alliance business strategy of synergism, local autonomy and
personal service prevails and wins business.

Peter Alpert, Chief Executive Officer of Teachers' Health Trust.

(PHOTO OF PETER ALPERT)


                                       25



WESTERN ALLIANCE BANCORPORATION

BOARD OF DIRECTORS

                                                        
(PHOTO OF ROBERT SARVER)   (PHOTO OF MARIANNE BOYD JOHNSON)   (PHOTO OF JAMES NAVE, D.V.M.)
Chairman                   Senior Vice President              Tropicana Animal
of the Board               & Vice Chairman,                   Hospital
                           Boyd Gaming Corporation

(PHOTO OF PAUL BAKER)      (PHOTO OF CARY MACK)               (PHOTO OF EDWARD NIGRO)
President,                 Mack Barclay Inc.                  President,
Enterprise Group                                              Nigro Associates

(PHOTO OF BRUCE BEACH)     (PHOTO OF ARTHUR MARSHALL)         (PHOTO OF DONALD SNYDER)
Chairman and Chief         Chairman,                          Chairman,
Executive Officer,         BankWest of Nevada,                Las Vegas Performing
Beach,Fleischman & Co.     Member, Nevada                     Arts Center
                           Gaming Commission                  Foundation

(PHOTO OF WILLIAM BOYD)    (PHOTO OF TODD MARSHALL)           (PHOTO OF LARRY WOODRUM)
Chairman and Chief         Chief Executive Of                 President & Chief
Executive Officer, Boyd    Oficer,                            Executive Officer,
Gaming Corporation         Marshall Retail Group              BankWest of Nevada

(PHOTO OF STEVE HILTON)    (PHOTO OF M. NAFEES NAGY, M.D.)
Co-Chairman and            President,
Co-Chief Executive         Nevada Cancer Center
Officer, Meritage
Corporation



OFFICERS

ROBERT SARVER
President, Chief Executive

GARY CADY
Executive Vice President,
California Administration

DUANE FROESCHLE
Executive Vice President,
Chief Credit Officer

DALE GIBBONS
Executive Vice President,
Chief Financial Officer

JAMES LUNDY
Executive Vice President,
Arizona Administration

LINDA MAHAN
Executive Vice President, Operations

MERRILL WALL
Executive Vice President,
Chief Administrative Officer

LARRY WOODRUM
Executive Vice President,
Nevada Administration

SANFORD SADLER
Senior Vice President,
Credit Administration

RANDALL THEISEN
Senior Vice President,
General Counsel

STEPHEN WALLIS
Senior Vice President,
Risk Management

TERRY SHIREY
Senior Vice President,
Controller

                                                      (LOGO OF WESTERN ALLIANCE
                                                      BANCORPORATION)

                                                      2700 West Sahara Avenue
                                                      Las Vegas, Nevada 89102
                                                      800.764.7619
                                                      westernalliancebancorp.com


                                       26



WESTERN ALLIANCE BANCORPORATION

OFFICERS

BANKWEST OF NEVADA

LARRY WOODRUM
Chief Executive Officer,
President

JACK WALLIS
Senior Executive Vice President,
Chief Operating Officer

EXECUTIVE VICE PRESIDENTS

SELMA BARTLETT
Regional President
RACHELLE CRUPI
Regional President
DIANE FEARON
Regional President
DALE GIBBONS
Cheif Financial Officer
BARRY HARRISON
Chief Real Estate Officer
JERRY HAYES
Regional President
BRUCE HENDRICKS
Regional President
LINDA KUHN
Regional President
MARK LARSON
Regional President
JERRIE MERRITT
Regional President
LINDA MAHAN
Operations
SANFORD SADLER
Chief Credit Officer

SENIOR VICE PRESIDENTS

JILL AMONICA
Mortgage Loan Officer
FLOSSIE CHRISTENSEN
Human Resources Director
JOSELYN COUSINS
Community Dev. Manager
MARIA FERNANDEZ
Senior Loan Officer
SARAH GUINDY
Relationship Manager
LORI HARRISON
Regional Chief Lending Officer
DALINE JANUIK
Senior Loan Officer
KEITH JARVIS
Senior Real Estate Loan Officer
JOEY JOHNSON
Regional Chief Lending
ROBERT LEASE
Professional Mortgage Lender
CATHY LYNCH
Loan Servicing Dept. Manager
BRIAN MADDOX
Community Dev. Director
GREG MANLEY
Credit Administrator
JOANN MCFARLAND
Compliance Officer
JACK MISHEL
Regional Chief Lending Officer
CARLOS MONTOYA
Operations Administrator
RON POCHOP
Chief Info Technology Officer
DAVID ROUSH
Business Development Officer
JANICE ROWE
Marketing Director
TERRY SHIREY
Controller
TODD SKADBERG
Senior Real Estate Loan Officer
IRA SLEASMAN
Consumer/Business Loan Manager
MARCIA SYNKO
Regional Chief Lending Officer
KATHRINE TAYLOR
Branch Manager
BRADFORD TOPE
Chief Regional Credit Officer
DONALD VALLECORSA
CLC Manager/Special Assets
DAVID WALL
Senior Loan Officer
DIANNE WEEKS-SWANSON
Business Development Officer
PAUL WORKMAN
Business Development Officer

VICE PRESIDENTS

PAMELA ACOSTA
LAURIE BORGNA
DAVID BOSER
SCOTT BROD
CAROLYN CARROLL
RODGER CASTELANO
PATRICIA CORDILLO
KATHY COSIO
ANDY DE LA CRUZ
NADINE GARCIA-VALDIVIA
NICOLE GARNIER
GINA GIBSON
KATHIE HIGGINS
MICHELE JADOTTE
SHENAZ JOHANSEN
STEVE JOHNSON
LOIS KACHNIK
ALLEN MCCONVILLE
KATHLEEN MCLAIN
NURALI MOOSA
KENT MORISHIGE
SHERMAN NEEDHAM
BRIAN PENDERGRASS
MICHAEL PICKETT
RON RISK
LAURENE ROGERS
MURAD ROSS
SALVATORE SAIA
CHRIS SCHLAFFMAN
STEPHEN SCHNEIDER
M. NANCY SCHULTZ
EDWINA SMITH-GARDNER
PATRICIA TINMAN
ANA MARIA TOBERMAN
JOHN ZABY

PREMIER TRUST

MARK DRESCHLER
Chief Executive Officer,
President
MICHAEL MCCARTNEY
Executive Vice President,
Regional Manager
TOM RHEES
Vice President
Trust Officer

ALLIANCE BANK OF ARIZONA

JAMES LUNDY
Chief Executive Officer,
President
RICHARD KRIVEL
Chairman of the Board,
Tucson Market Manager
DUANE FROESCHLE
Vice Chairman,
Chief Credit Officer

SENIOR VICE PRESIDENTS

BARBARA BOONE
Credit Training/CRA Officer
BENJAMIN DANNER
Commercial Banking Manager
DON GARNER
Commercial Real Estate Manager
RUTH GIOVACCHINI
SBA-Loan Administrator
HARRY HARVEY
Commercial/Corporate Banking
SHARON HUEBNER
Commercial Banking Manager
BRENDA KOEDYKER
Professional Banking Manager
JOAN LESSNER
Executive & Professional Banking
BRIAN MIDDLETON
Commercial Banking Manager
JOHN MOOTHART
Commercial Banking Manager
T. RYAN SULLIVAN
Chief Financial Officer
VICTORIA WILLIAMS
Commercial Real Estate Banking
KAY WILMA
Operations Administrator
EDMUND ZITO
Corporate/Commercial Banking

VICE PRESIDENTS

TIMOTHY COLLINS
KELLY CONNER
STEVE DEAN
TIMOTHY DODT
WULFRANO FERNANDEZ
DONNA GANDRE
MATTHEW GILBREATH
ROBERT GRAMHILL
GERALDINE HOM
DAVID JOHNSON
SANDRA LAMELL
PEGGY LOVIK
TEAL MAIN
GINA MCROSTIE
DEBBIE NILES
JOHN O'ROURKE
MICHAEL PADUONE
VICKI SMITH
SANDERS SOLOT
CYNTHIA SOUTHARD
SCOTT STOVALL
TROY TOOLSON
CHAD TWITTY
DARLENE WOODSON

TORREY PINES BANK

ROBERT SARVER
Chief Executive Officer,
Chairman
GARY CADY
President

EXECUTIVE VICE PRESIDENTS

JOHN MAGUIRE
Regional President
MERRILL WALL
Chief Adminstrative Officer

SENIOR VICE PRESIDENTS

STEVEN BLACK
Real Estate Lending
PHIL FOWLER
Chief Financial Officer
TIMOTHY HIMSTREET
Regional Manager
JOHN MASSAB
Regional Manager
ALAN MCEACHERN
Regional Manager
WILLIAM MCLENNAN
Real Estate Manager
LILA QUIGLEY
Deposit Services Manager
TEOFLA RICH
Regional Manager
THOMAS WOOLWAY
Corporate Banking Manager

VICE PRESIDENTS

PETER CARR
FRANCESCA CASTAGNOLA
MARCIA CHAREST
STEVEN CONNOLLY
CHRIS GRASSA
JOHN HARLESON
DENNIS ISABELLE
STEVE KENT
GAIL KING
STACY LOMBARDO
ROBERT MCNAMARA
MARIE PFEIFER
FIONA ROUSE
LINDA STOUFFER
ROSEMARY VON KLUEGL
CRYSTAL WATKINS
DIANE WUNDERLICH-SIPE

MILLER/RUSSELL

DENNIS MILLER
President

INVESTMENT COUNSELORS
JOEL BONNEMA
LORI BOOTHE-HOULE
RUSSELL BUCKLEW
BRADLEY LEMON
WILLIAM MOSS
MORGAN SMITH,JR.
JOHN STURTEVANT
CHRISTOPHER WILKINSON

MAUREEN RZEPPA
Administrative Manager


                                       27



WESTERN ALLIANCE BANCORPORATION

(LOGO OF BANK WEST OF NEVADA)
Your Business Partner

www.bankwestnevada.com

SAHARA REGIONAL OFFICE
2700 W. Sahara Avenue, Las Vegas, NV 89102
(702) 248-4200
Bruce Hendricks, Regional President

CENTENNIAL HILLS REGIONAL OFFICE
8505 W. Centennial Parkway, Las Vegas, NV 89149
(702) 856-7160
Linda Kuhn, Regional President

EASTERN/SIENA HEIGHTS OFFICE
10199 S. Eastern Avenue, Henderson, NV 89052
(702) 940-8501
Kathy Taylor, Senior Vice President, Manager

HENDERSON REGIONAL OFFICE
2890 N. Green Valley Parkway, Henderson, NV 89014
(702) 451-0624
Selma Bartlett, Regional President

NORTHWEST REGIONAL OFFICE
7251 W. Lake Mead Boulevard, Las Vegas, NV 89128
(702) 240-1734
Mark Larson, Regional President

SOUTHWEST REGIONAL OFFICE
3985 S. Durango Drive Las Vegas, NV 89147
(702) 363-5140
Diane Fearon, Regional President

COMMERCIAL REAL ESTATE OFFICE
2700 W. Sahara Avenue, Las Vegas, NV 89102
(702) 248-4200
Barry Harrison, Executive Vice President

(LOGO OF ALLIANCE BANK)
Of ARIZONA

www.alliancebankofarizona.com

PHOENIX BILTMORE PARK OFFICE
2701 E. Camelback Road, Ste. 110, Phoenix, AZ 85016
(602) 952-5400
James Lundy, President

PHOENIX GATEWAY OFFICE
4646 E. Van Buren, Ste. 100, Phoenix, AZ 85008
(602) 797-3600
Brian Middleton, Senior Vice President, Manager

PHOENIX MIDTOWN OFFICE
2901 N. Central Avenue, Ste. 100, Phoenix, AZ 85012
(602) 629-1700
Kelly Conner, Vice President, Manager

SCOTTSDALE OFFICE
7373 N. Scottsdale Road, Ste. A-195, Scottsdale, AZ 85253
(480) 998-6500
Ben Danner, Senior Vice President, Manager

TUCSON SWAN OFFICE
4703 E. Camp Lowell Drive, Tucson, AZ 85712
(520) 784-6000
Rick Krivel, Chairman

TUCSON DOWNTOWN OFFICE
1 S. Church Avenue, Ste. 950, Tucson, AZ 85701
(520) 784-6070
Dave Johnson, Vice President, Manager

TUCSON WILLIAMS CENTRE OFFICE
200 S. Craycroft Road, Tucson, AZ 85711
(520) 322-7700
Martha Mahaffey, Customer Service Manager

(LOGO OF TORREY PINES BANK)

www.torreypinesbank.com

CARMEL VALLEY OFFICE
12220 E. Camino Real, Ste. 110, San Diego, CA 92130
(858) 523-4630
Alan McEachern, Senior Vice President, Manager

DOWNTOWN SAN DIEGO OFFICE
550 West C Street, Ste. 100, San Diego, CA 92101
(619) 233-2500
John Massab, SeniorVice President, Manager

GOLDEN TRIANGLE OFFICE
4350 Executive Drive, Suite 130, San Diego, CA 92121
(858) 523-4688
Tim Himstreet, Senior Vice President, Manager

LA MESA OFFICE
8379 Center Drive, La Mesa, CA 91942
(619) 233-2555
John Maguire, Senior Vice President, Manager

SYMPHONY TOWERS OFFICE
750 B Street, Ste. 100, San Diego, CA 92101
(619) 233-2518
Francesca Castagnola, Vice President, Manager

COMMERCIAL REAL ESTATE OFFICE
12220 E. Camino Real, Ste. 100, San Diego, CA 92130
(858) 523-4600,
Will McLennan, Senior Vice President

(LOGO OF MILLER RUSSELL)

www.miller-russell.com

PHOENIX OFFICE
2701 E. Camelback Rd., Ste. 120, Phoenix, AZ 85016
(800) 222-1232
Dennis Miller,President

TUCSON OFFICE
4703 E. Camp Lowell Drive, Tucson, AZ 85712
(520) 784-6090
John Sturtevant, Investment Counselor

LAS VEGAS OFFICE
2700 W. Sahara Avenue, Ste. 300, Las Vegas, NV 89102
(702) 252-6465
Russ Bucklew, Investment Counselor

SAN DIEGO OFFICE
12220 El Camino Real, Ste.120, San Diego, CA 92130
(858) 523-4681
Morgan Smith, Investment Counselor

(LOGO OF PREMIER TRUST)

www.premier trust.com

LAS VEGAS OFFICE
2700 W. Sahara Avenue, Ste. 300, Las Vegas, NV 89102
(702) 507-0750
Mark Dreschler,President

PHOENIX OFFICE
3131 E. Camelback Road, Ste. 230, Phoenix, AZ 85016
(480) 229-8243
Michael McCartney, Regional President


                                       28



WESTERN ALLIANCE BANCORPORATION

FINANCIAL REPORT

                                                                           
Cautionary Note Regarding Forward-Looking Statements                          30
Our Business                                                                  30
Market For Registrant's Common Equity and Related Stockholder Matters         33
Selected Financial Data                                                       33
Management's Discussion and Analysis of Financial Condition and Results of
Operations                                                                    35
Report of Independent Registered Public Accounting Firm                       61
Consolidated Balance Sheets                                                   62
Consolidated Statements of Income                                             63
Consolidated Statements of Stockholders' Equity                               64
Consolidated Statements of Cash Flows                                         65
Notes to Consolidated Financial Statements                                    66




                                       29



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Our Business" and elsewhere in
this annual report constitute forward-looking statements. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, you can identify forward
looking statements by terms such as "may," "will," "should," "expect," "intend,"
"plan," "anticipate," "believe," "estimate," "predict," "potential" or the
negative of these terms or other comparable terminology.

The forward-looking statements contained in this annual report reflect our
current views about future events and financial performance and are subject to
risks, uncertainties, assumptions and changes in circumstances that may cause
our actual results to differ significantly from historical results and those
expressed in any forward-looking statement. Some factors that could cause actual
results to differ materially from historical or expected results include:

- -    changes in general economic conditions, either nationally or locally in the
     areas in which we conduct or will conduct our business;

- -    inflation, interest rate, market and monetary fluctuations;

- -    changes in gaming or tourism in our primary market area;

- -    risks associated with our growth and expansion strategy and related costs;

- -    increased lending risks associated with our high concentration of
     commercial real estate, construction and land development and commercial,
     industrial loans;

- -    increases in competitive pressures among financial institutions and
     businesses offering similar products and services;

- -    higher defaults on our loan portfolio than we expect;

- -    changes in management's estimate of the adequacy of the allowance for loan
     losses;

- -    legislative or regulatory changes or changes in accounting principles,
     policies or guidelines;

- -    management's estimates and projections of interest rates and interest rate
     policy;

- -    the execution of our business plan; and

- -    other factors affecting the financial services industry generally or the
     banking industry in particular.

We do not intend and disclaim any duty or obligation to update or revise any
industry information or forward-looking statements set forth in this annual
report to reflect new information, future events or other wise, except as may be
required by the securities laws.

OUR BUSINESS

We are a bank holding company headquartered in Las Vegas, Nevada. We provide a
full range of banking and related services to locally owned businesses,
professional firms, real estate developers and investors, local non-profit
organizations, high net worth individuals and other consumers through our
subsidiary banks and financial services companies located in Nevada, Arizona and
California. On a consolidated basis, as of December 31, 2005, we had
approximately $2.9 billion in assets, $1.8 billion in total loans, $2.4 billion
in deposits and $244.2 million in stockholders' equity. We have focused our
lending activities primarily on commercial loans, which comprised 83.7% of our
total loan portfolio at December 31, 2005. In addition to traditional lending
and deposit gathering capabilities, we also offer a broad array of financial
products and services aimed at satisfying the needs of small to mid-sized
businesses and their proprietors, including cash management, trust
administration and estate planning, custody and investments and equipment
leasing.

BankWest of Nevada was founded in 1994 by a group of individuals with extensive
community banking experience in the Las Vegas market. We believe our success has
been built on the strength of our management team, our conservative credit
culture, the attractive growth characteristics of the markets in which we
operate and our ability to expand our franchise by attracting seasoned bankers
with long-standing relationships in their communities.

In 2003, with the support of local banking veterans, we opened Alliance Bank of
Arizona in Phoenix, Arizona and Torrey Pines Bank in San Diego, California. Over
the past two and a half years we have successfully leveraged the expertise and
strengths of Western Alliance and BankWest of Nevada to build and expand these
new banks in a rapid and efficient manner.

Through our wholly owned, non-bank subsidiaries, Miller/Russell & Associates,
Inc. and Premier Trust, Inc., we provide investment advisory and wealth
management services, including trust administration and estate planning. We
acquired Miller/Russell and Premier Trust in May 2004 and December 2003,
respectively. As of December 31, 2005, Miller/Russell had $1.11 billion in
assets under management, and Premier Trust had $132 million in assets under
management and $296 million in total trust assets.


                                       30



WESTERN ALLIANCE BANCORPORATION

OUR BUSINESS

We currently operate our business in four operating segments: BankWest of
Nevada, Alliance Bank of Arizona, Torrey Pines Bank and Other (Western Alliance
Bancorporation, Miller/Russell & Associates, Inc. and Premier Trust, Inc.)
Please refer to Note 18 "Segment Reporting" to our Consolidated Financial
Statements for financial information regarding segment reporting.

LENDING ACTIVITIES

We provide a variety of loans to our customers, including commercial and
residential real estate loans, construction and land development loans,
commercial loans, and to a lesser extent, consumer loans. Our lending efforts
have focused on meeting the needs of our business customers, who have typically
required funding for commercial and commercial real estate enterprises.
Commercial loans comprised 83.7% of our total loan portfolio at December 31,
2005. We intend to continue expanding our lending activities and have recently
begun offering SBA 7(a) loans and equipment leasing.

Commercial Real Estate Loans. The majority of our lending activity consists of
loans to finance the purchase of commercial real estate and loans to finance
inventory and working capital that are secured by commercial real estate. We
have a commercial real estate portfolio comprised of loans on apartment
buildings, professional offices, industrial facilities, retail centers and other
commercial properties. As of December 31, 2005, 54.1% of our commercial real
estate and construction loans were owner occupied.

Construction and Land Development Loans. The principal types of our construction
loans include industrial/warehouse properties, office buildings, retail centers,
medical facilities, restaurants and, on occasion, luxury single-family homes.
Construction and land development loans are primarily made only to experienced
local developers with whom we have a sufficient lending history. An analysis of
each construction project is per formed as part of the underwriting process to
determine whether the type of property, location, construction costs and
contingency funds are appropriate and adequate. We extend raw commercial land
loans primarily to borrowers who plan to initiate active development of the
property within two years.

Commercial and Industrial Loans. In addition to real estate related loan
products, we also originate commercial and industrial loans, including working
capital lines of credit, inventory and accounts receivable lines, equipment
loans and other commercial loans. We focus on making commercial loans to small
and medium-sized businesses in a wide variety of industries. We also are a
"Preferred Lender" in Arizona with the SBA. We intend to increase our commitment
to this product line in the future.

Residential Loans. We originate residential mortgage loans secured by one- to
four-family properties, most of which serve as the primary residence of the
owner. Our primary focus is to maintain and expand relationships with realtors
and other key contacts in the residential real estate industry in order to
originate new mortgages. Most of our loan originations result from relationships
with existing or past customers, members of our local community, and referrals
from realtors, attorneys and builders.

Consumer Loans. We offer a variety of consumer loans to meet customer demand and
to increase the yield on our loan portfolio. Consumer loans are generally
offered at a higher rate and shorter term than residential mortgages. Examples
of our consumer loans include:

- -    home equity loans and lines of credit;

- -    home improvement loans;

- -    new and used automobile loans; and

- -    personal lines of credit.

INVESTMENT ACTIVITIES

Each of our banking subsidiaries has its own investment policy, which is
established by our board of directors and is approved by each respective bank's
board of directors. These policies dictate that investment decisions will be
made based on the safety of the investment, liquidity requirements, potential
returns, cash flow targets, and consistency with our interest rate risk
management. Each bank's chief financial officer is responsible for making
securities portfolio decisions in accordance with established policies. The
chief financial officer has the authority to purchase and sell securities within
specified guidelines established by the investment policy. All transactions for
a specific bank are reviewed by that bank's board of directors on a monthly
basis.

Our investment policies generally limit securities investments to U.S.
Government, agency and sponsored entity securities and municipal bonds, as well
as investments in preferred and common stock of government sponsored entities,
such as Fannie Mae, Freddie Mac, and the Federal Home Loan Bank. The policies
also permit investments in mortgage-backed securities, including pass-through
securities issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, as
well as collateralized mortgage obligations ("CMOs") issued or backed by
securities issued by these government agencies and privately issued investment
grade CMOs. Privately issued CMOs typically offer higher rates than those paid
on government agency CMOs, but lack the guaranty of such agencies and typically
there is less market liquidity than agency bonds. The policies also permit
investments in securities issued or backed by the SBA. Our current investment
strategy uses a risk management approach of diversified investing in fixed-rate
securities with short- to intermediate-term


                                       31



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

OUR BUSINESS

INVESTMENT ACTIVITIES (continued)

maturities. The emphasis of this approach is to increase overall securities
yields while managing interest rate risk. To accomplish these objectives, we
focus on investments in mortgage-backed securities and CMOs.

All of our investment securities are classified as "available for sale" or "held
to maturity" pursuant to SFAS No. 115, Accounting for Certain Investments in
Debt and Equity Securities. Available for sale securities are reported at fair
value, with unrealized gains and losses excluded from earnings and instead
reported as a separate component of stockholders' equity. Held to maturity
securities are those securities that we have both the intent and the ability to
hold to maturity. These securities are carried at cost adjusted for amortization
of premium and accretion of discount.

DEPOSIT PRODUCTS AND OTHER FUNDING SOURCES

We offer a variety of deposit products to our customers, including checking
accounts, savings accounts, money market accounts and other deposit accounts,
including fixed-rate, fixed maturity retail certificates of deposit ranging in
terms from 30 days to five years, individual retirement accounts, and non-retail
certificates of deposit consisting of jumbo certificates greater than or equal
to $100,000. We have historically focused on attracting low cost core deposits.
As of December 31, 2005, our deposit portfolio was comprised of 40.9% non-
interest bearing deposits, compared to 14.3% time deposits.

Our non-interest bearing deposits consist of non-interest bearing checking
accounts, which, as of December 31, 2005, were comprised of 31.9% title company
deposits, which consist primarily of deposits held in escrow pending the closing
of commercial and residential real estate transactions, and, to a lesser extent,
operating accounts for title companies; 61.6% other business deposits, which
consist primarily of operating accounts for businesses; and 6.5% consumer
deposits. We consider these deposits to be core deposits. We believe these
deposits are generally not interest rate sensitive since these accounts are not
created for investment purposes. The competition for these deposits in our
markets is strong. We believe our success in attracting and retaining these
deposits is based on several factors, including (1) the high level of service we
provide to our customers; (2) our ability to attract and retain experienced
relationship bankers who have strong relationships in their communities; (3) our
broad array of cash management services; and (4) our competitive pricing on
earnings credits paid on these deposits. We intend to continue our efforts to
attract deposits from our business lending relationships in order to maintain
our low cost of funds and improve our net interest margin. However, if we lost a
significant part of our low-cost deposit base, it would negatively impact our
profitability.

Deposit flows are significantly influenced by general and local economic
conditions, changes in prevailing interest rates, internal pricing decisions and
competition. Our deposits are primarily obtained from areas surrounding our
branch offices. In order to attract and retain deposits, we rely on providing
quality service and introducing new products and services that meet our
customers' needs.

Each subsidiary bank's asset and liability committee sets its own deposit rates.
Our banks consider a number of factors when determining their individual deposit
rates, including:

- -    Information on current and projected national and local economic conditions
     and the outlook for interest rates;

- -    The competitive environment in the markets it operates in;

- -    Loan and deposit positions and forecasts, including any concentrations in
     either; and

- -    FHLB advance rates and rates charged on other sources of funds.

FINANCIAL PRODUCTS & SERVICES

In addition to traditional commercial banking activities, we provide other
financial services to our customers, including:

- -    Internet banking;

- -    Wire transfers;

- -    Electronic bill payment;

- -    Lock box services;

- -    Courier services;

- -    Cash vault; and

- -    Cash management services (including account reconciliation, collections and
     sweep accounts).

We have a service center facility currently under development in the Las Vegas
metropolitan area, which we anticipate will become operational in the third
quarter of 2006. We expect that this facility, once completed, will increase our
capacity to provide courier, cash management and other business services.


                                       32



WESTERN ALLIANCE BANCORPORATION

OUR BUSINESS

FINANCIAL PRODUCTS & SERVICES (continued)

Through Miller/Russell, we provide customers with asset allocation and
investment advisory services. In addition, we provide wealth management services
including trust administration of personal and retirement accounts, estate and
financial planning, custody services and investments through Premier Trust.

MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock began trading on the New York Stock Exchange under the symbol
"WAL" on June 30, 2005.

Prior to our IPO there had been no public market for our common stock. To our
knowledge, there were no trades of our stock from January 1, 2004 through the
date of our initial public offering.

In the IPO shares of our common stock were sold for $22.00 per share. The
stock's price at the close of the market on June 30, 2005 was $25.40. The
following table sets forth the low and high closing prices for the two quarters
in the period from June 30, 2005 through December 31, 2005.



                      CLOSING PRICES
                     ---------------
QUARTER ENDED          LOW     HIGH
- -------------        ------   ------
                        
September 30, 2005   $25.75   $31.50
December 31, 2005    $24.39   $30.01


The closing price of our stock on March 10, 2006 was $35.39.

HOLDERS

As of March 10, 2006, there were approximately 301 stockholders of record of our
common stock. At such date, our directors and executive officers beneficially
owned approximately 50% of our outstanding shares. There are no other classes of
common equity outstanding.

DIVIDENDS

We have never declared a cash dividend as we have used our current and retained
earnings to support our rapid and continued growth. We do not foresee any
circumstances in the immediate future in which we would consider paying cash
dividends on our common stock.

Western Alliance is a legal entity separate and distinct from its bank
subsidiaries and our other non-bank subsidiaries. Since we are a holding company
with no significant assets other than the capital stock of our subsidiaries, we
depend upon dividends from our subsidiaries for a substantial part of our
revenue. Accordingly, our ability to pay dividends depends primarily upon the
receipt of dividends or other capital distributions from our subsidiaries. Our
subsidiaries' ability to pay dividends to Western Alliance is subject to, among
other things, their earnings, financial condition and need for funds, as well as
federal and state governmental policies and regulations applicable to us and
each of those subsidiaries, which limit the amount that may be paid as dividends
without prior approval. In addition, if any required payments on outstanding
trust preferred securities are not made, we will be prohibited from paying
dividends on our common stock.

SELECTED FINANCIAL DATA

The selected financial information in the table below as of and for the years
ended December 31, 2005, 2004, 2003, 2002 and 2001 is derived from our audited
consolidated financial statements. Results for past periods are not necessarily
indicative of results that may be expected for any future period.


                                       33



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

SELECTED FINANCIAL DATA



                                                                     AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                      -------------------------------------------------------------------
                                                          2005          2004          2003          2002          2001
                                                      -----------   -----------   -----------   -----------   -----------
                                                                   ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                                                               
SELECTED INCOME DATA:
Interest income                                       $   134,910   $    90,855   $    53,823   $    39,117   $    35,713
Interest expense                                           32,568        19,720        12,798         9,771         9,140
                                                      -----------   -----------   -----------   -----------   -----------
Net interest income                                       102,342        71,135        41,025        29,346        26,573
Provision for loans losses                                  6,179         3,914         5,145         1,587         2,800
                                                      -----------   -----------   -----------   -----------   -----------
Net interest income after provision for loan losses        96,163        67,221        35,880        27,759        23,773
Non-interest income                                        12,138         8,726         4,270         3,935         3,437
Non-interest expense                                       64,864        44,929        27,290        19,050        18,256
                                                      -----------   -----------   -----------   -----------   -----------
Income before income taxes                                 43,437        31,018        12,860        12,644         8,954
Provision for income taxes                                 15,372        10,961         4,171         4,235         3,001
                                                      -----------   -----------   -----------   -----------   -----------
Net Income                                            $    28,065   $    20,057   $     8,689   $     8,409   $     5,953
                                                      ===========   ===========   ===========   ===========   ===========
SHARE DATA:
Earnings per share--basic                             $      1.36   $      1.17   $      0.61   $      0.79   $      0.55
Earnings per share--diluted                           $      1.24   $      1.09   $      0.59   $      0.78   $      0.54
Book Value per share                                  $     10.71   $      7.32   $      5.84   $      4.85   $      3.31
Shares outstanding at period end                       22,810,491    18,249,554    16,681,273    13,908,279    10,850,787
Weighted average shares outstanding--basic             20,583,022    17,189,687    14,313,611    10,677,736    10,730,738
Weighted average shares outstanding--diluted           22,666,161    18,405,120    14,613,173    10,715,448    11,038,275

SELECTED BALANCE SHEET DATA:
Cash and cash equivalents                             $   174,336   $   115,397   $    65,908   $   159,683   $   104,101
Investments and other securities                          748,533       788,622       715,978       232,848        79,454
Gross loans, including net deferred loan fees           1,793,337     1,188,535       733,078       464,355       407,210
Allowance for loan losses                                  21,192        15,271        11,378         6,449         6,563
Assets                                                  2,857,271     2,176,849     1,576,773       872,074       602,703
Deposits                                                2,393,812     1,756,036     1,094,646       720,304       549,354
Junior subordinated debt                                   30,928        30,928        30,928        30,928        15,464
Stockholders' equity                                      244,223       133,571        97,451        67,442        35,862

SELECTED OTHER BALANCE SHEET DATA:
Average assets                                        $ 2,488,740   $ 1,902,947   $ 1,148,820   $   687,927   $   536,219
Average earning assets                                  2,324,463     1,776,362     1,069,990       642,734       473,462
Average stockholders' equity                              195,284       114,765        71,276        43,370        39,573

SELECTED FINANCIAL AND LIQUDITY RATIOS:
Return on average assets                                     1.13%         1.05%         0.76%         1.22%         1.11%
Return on average stockholders' equity                      14.37%        17.48%        12.19%        19.39%        15.04%
Net interest margin (1)                                      4.40%         4.00%         3.83%         4.57%         5.50%
Efficiency ratio (2)                                        56.66%        56.26%        60.25%        57.24%        60.83%
Loan to deposit ratio                                       74.92%        67.68%        66.97%        64.47%        74.13%

CAPITAL RATIOS (COMPANY):
Average stockholders' equity to average assets                7.8%          6.0%          6.2%          6.3%          7.4%
Leverage Ratio                                               10.2%          7.7%          8.9%         11.2%          8.5%
Tier 1 Risk-Based Capital ratio                              12.8%         10.9%         13.3%         15.4%         10.4%
Total Risk-Based Capital ratio                               13.8%         12.0%         14.4%         18.1%         12.3%

SELECTED ASSET QUALITY RATIOS:
Non-accrual loans to gross loans                             0.01%         0.13%         0.03%         0.22%         0.17%
Non-accrual loans to total assets                            0.00%         0.07%         0.01%         0.12%         0.11%
Loans past due 90 days or more and still
   accruing to total loans                                   0.00%         0.00%         0.01%         0.04%         0.05%
Allowance for loan losses to total loans                     1.18%         1.28%         1.55%         1.39%         1.61%
Allowance for loan losses to non-accrual loans          19,805.61%       959.84%     4,137.45%       181.71%       711.82%
Net charge-offs to average loans                             0.02%         0.00%         0.17%         0.19%         0.27%


(1)  Net interest margin represents net interest income as a percentage of
     average interest-earning assets.

(2)  Efficiency ratio represents noninterest expenses as a percentage of the
     total of net interest income plus noninterest income.


                                       34



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion and analysis should be read in conjunction with
"Selected Consolidated Financial Data" and our consolidated financial statements
and related notes included elsewhere in this annual report. This discussion and
analysis contains forward-looking statements that involve risk, uncertainties
and assumptions. Certain risks, uncertainties and other factors, including but
not limited to those set forth under "Cautionary Note Regarding Forward-Looking
Statements" may cause actual results to differ materially from those projected
in the forward-looking statements.

OVERVIEW AND HISTORY

We are a bank holding company headquartered in Las Vegas, Nevada. We provide a
full range of banking and related services to locally owned businesses,
professional firms, real estate developers and investors, local nonprofit
organizations, high net worth individuals and consumers through our subsidiary
banks and financial services companies located in Nevada, Arizona and
California. In addition to traditional lending and deposit gathering
capabilities, we also offer a broad array of financial products and services
aimed at satisfying the needs of small to mid-sized businesses and their
proprietors, including cash management, trust administration and estate
planning, custody and investments and equipment leasing.

We generate the majority of our revenue from interest on loans, service charges
on customer accounts and income from investment securities. This revenue is
offset by interest expense paid on deposits and other borrowings and
non-interest expense such as administrative and occupancy expenses. Net interest
income is the difference between interest income on interest-earning assets such
as loans and securities and interest expense on interest-bearing liabilities
such as customer deposits and other borrowings which are used to fund those
assets. Net interest income is our largest source of net income. Interest rate
fluctuations, as well as changes in the amount and type of earning assets and
liabilities, combine to affect net interest income.

We provide a variety of loans to our customers, including commercial and
residential real estate loans, construction and land development loans,
commercial and industrial loans, and to a lesser extent, consumer loans. We rely
primarily on locally generated deposits to provide us with funds for making
loans. We intend to continue expanding our lending activities and have recently
begun offering Small Business Administration, or SBA, loans.

In addition to these traditional commercial banking capabilities, we also
provide our customers with cash management, trust administration and estate
planning, equipment leasing, and custody and investment services, resulting in
revenue generated from non-interest income. We receive fees from our deposit
customers in the form of service fees, checking fees and other fees. Other
services such as safe deposit and wire transfers provide additional fee income.
We may also generate income from time to time from the sale of investment
securities. The fees collected by us and any gains on sales of securities are
found in our Consolidated Statements of Income under "non-interest income."
Offsetting these earnings are operating expenses referred to as "non-interest
expense." Because banking is a very people intensive industry, our largest
operating expense is employee compensation and related expenses.



                                   AT OR FOR THE YEAR ENDED
                                         DECEMBER 31,
                             ------------------------------------
                                2005         2004         2003
                             ----------   ----------   ----------
                                    ($ IN THOUSANDS, EXCEPT
                                      PER SHARE AMOUNTS)
                                              
Net Income                   $   28,065   $   20,057   $    8,689
Basic earnings per share           1.36         1.17         0.61
Diluted earnings per share         1.24         1.09         0.59
Total Assets                  2,857,271    2,176,849    1,576,773
Gross Loans                   1,793,337    1,188,535      733,078
Total Deposits                2,393,812    1,756,036    1,094,646
Net interest margin                4.40%        4.00%        3.83%
Efficiency Ratio                  56.66        56.26        60.25
Return on average assets           1.13         1.05         0.76
Return on average equity          14.37        17.48        12.19


PRIMARY FACTORS IN EVALUATING FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As a bank holding company, we focus on several factors in evaluating our
financial condition and results of operations, including:

     -    Return on Average Equity, or ROE;

     -    Return on Average Assets, or ROA;

     -    Asset Quality;

     -    Asset and Deposit Growth; and

     -    Operating Efficiency.


                                       35



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

PRIMARY FACTORS IN EVALUATING FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Return on Average Equity. Our net income for the year ended December 31, 2005
increased 39.9% to $28.1 million compared to $20.1 million for the year ended
December 31, 2004. The increase in net income was due primarily to increases in
net interest income of $31.2 million and other income of $3.4 million, partially
offset by an increase of $19.9 million in other expenses and an additional
provision for loan losses of $2.3 million. Basic earnings per share increased to
$1.36 per share for the year ended December 31, 2005, compared to $1.17 per
share for the same period in 2004. Diluted earnings per share increased to $1.24
per share for the year ended December 31, 2005, compared to $1.09 per share for
the same period last year. Average shares outstanding increased 3.4 million from
17.2 million for the year ended December 31, 2004 to 20.6 million for the year
ended December 31, 2005, and average stockholders' equity increased $80.5
million for the same periods. The increase in shares outstanding and average
stockholders' equity was due primarily to our initial public offering of 4.2
million shares which closed in July 2006. The increase in net income and shares
outstanding resulted in an ROE of 14.4% for the year ended December 31, 2005,
compared to 17.5% for the year ended December 31, 2004.

Return on Average Assets. Our ROA for the year ended December 31, 2005 increased
to 1.13% compared to 1.05% for the same period in 2004. The increase in ROA is
primarily due to the increase in net income discussed above.

Asset Quality. For all banks and bank holding companies, asset quality plays a
significant role in the overall financial condition of the institution and
results of operations. We measure asset quality in terms of non-accrual loans
and assets as a percentage of gross loans and assets, and net charge-offs as a
percentage of average loans. Net charge-offs are calculated as the difference
between charged-off loans and recovery payments received on previously
charged-off loans. As of December 31, 2005, non-accrual loans were $107,000
compared to $1.6 million at December 31, 2004. Non-accrual loans as a percentage
of gross loans were 0.01% as of December 31, 2005, compared to 0.13% as of
December 31, 2004. At December 31, 2005 and December 31, 2004, our
nonperforming assets were exclusively comprised of non-accrual loans and loans
past due 90 days or more and still accruing. For the year ended December 31,
2005, net charge-offs as a percentage of average loans were 0.02%, compared to
less than 0.01% for the year ended December 31, 2004.

Asset and Deposit Growth. The ability to produce loans and generate deposits is
fundamental to our asset growth. Our assets and liabilities are comprised
primarily of loans and deposits, respectively. Total assets increased 31.3% to
$2.9 billion as of December 31, 2005 from $2.2 billion as of December 31, 2004.
Gross loans grew 50.9% to $1.8 billion as of December 31, 2005 from $1.2 billion
as of December 31, 2004. Total deposits increased 36.3% to $2.4 billion as of
December 31, 2005 from $1.8 billion as of December 31, 2004.

Operating Efficiency. Operating efficiency is measured in terms of how
efficiently income before income taxes is generated as a percentage of revenue.
Our efficiency ratio (non-interest expenses divided by the sum of net interest
income and non interest income) was 56.66% for the year ended December 31, 2005
compared to 56.26% for the same period in 2004.

CRITICAL ACCOUNTING POLICIES

The Notes to Consolidated Financial Statements contain a summary of our
significant accounting policies, including discussions on recently issued
accounting pronouncements, our adoption of them and the related impact of their
adoption. We believe that certain of these policies, along with various
estimates that we are required to make in recording our financial transactions,
are important to have a complete picture of our financial position. In addition,
these estimates require us to make complex and subjective judgments, many of
which include matters with a high degree of uncertainty. The following is a
discussion of these critical accounting policies and significant estimates.
Additional information about these policies can be found in Note 1 of the
Consolidated Financial Statements.

Allowance for Loan Losses. The allowance for loan losses is a valuation
allowance for probable losses incurred in the loan portfolio. Our allowance for
loan loss methodology incorporates a variety of risk considerations in
establishing an allowance for loan losses that we believe is adequate to absorb
losses in the existing portfolio. Such analysis addresses our historical loss
experience, delinquency and charge-off trends, collateral values, changes in
nonperforming loans, economic conditions, peer group experience and other
considerations. This information is then analyzed to determine "estimated loss
factors" which, in turn, is assigned to each loan category. These factors also
incorporate known information about individual loans, including the borrowers'
sensitivity to interest rate movements. Changes in the factors themselves are
driven by perceived risk in pools of homogenous loans classified by collateral
type, purpose and term. Management monitors local trends to anticipate future
delinquency potential on a quarterly basis. In addition to ongoing internal loan
reviews and risk assessment, management utilizes an independent loan review firm
to provide advice on the appropriateness of the allowance for loan losses.

The allowance for loan losses is increased by the provision for loan losses
charged to expense and reduced by loans charged off, net of recoveries.
Provisions for loan losses are provided on both a specific and general basis.
Specific allowances are provided for watch, criticized, and impaired credits for
which the expected/anticipated loss may be measurable. General valuation
allowances are


                                       36



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

CRITICAL ACCOUNTING POLICIES (continued)

based on a portfolio segmentation based on collateral type, purpose and risk
grading, with a further evaluation of various factors noted above.

We incorporate our internal loss history to establish potential risk based on
collateral type securing each loan. As an additional comparison, we examine peer
group banks to determine the nature and scope of their losses. Finally, we
closely examine each credit graded "Watch List/Special Mention" and below to
individually assess the appropriate specific loan loss reserve for such credit.

At least annually, we review the assumptions and formulae by which additions are
made to the specific and general valuation allowances for loan losses in an
effort to refine such allowance in light of the current status of the factors
described above. The total loan portfolio is thoroughly reviewed at least
quarterly for satisfactory levels of general and specific reserves together with
impaired loans to determine if write downs are necessary.

Although we believe the levels of the allowance as of December 31, 2005 and 2004
were adequate to absorb probable losses in the loan portfolio, a decline in
local economic conditions or other factors could result in increasing losses
that cannot be reasonably estimated at this time.

Available-for-Sale Securities. Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt and Equity Securities, requires
that available-for-sale securities be carried at fair value. Management utilizes
the services of a third party vendor to assist with the determination of
estimated fair values. Adjustments to the available-for-sale securities fair
value impact the consolidated financial statements by increasing or decreasing
assets and stockholders' equity.

Stock Based Compensation. We account for stock-based employee compensation
arrangements in accordance with provision of Accounting Principles Board, or
APB, Opinion No. 25, Accounting for Stock Issued to Employees and comply with
the disclosure provisions of Statement of Financial Accounting Standards, or
SFAS, No. 123 Accounting for Stock-Based Compensation. Therefore, we do not
record any compensation expense for stock options we grant to our employees
where the exercise price equals the fair market value of the stock on the date
of grant and the exercise price, number of shares eligible for issuance under
the options and vesting period are fixed. We comply with the disclosure
requirements of SFAS No. 123 and SFAS No. 148, which require that we disclose
our pro forma net income or loss and net income or loss per common share as if
we had expensed the fair value of the options.

In December 2004, the Financial Accounting Standards Board published FASB
Statement No. 123 (revised 2004), Share-Based Payment, or FAS 123(R). FAS 123(R)
requires that the compensation cost relating to share-based payment
transactions, including grants of employee stock options, be recognized in
financial statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. FAS 123(R) permits entities to use any
option-pricing model that meets the fair value objective in the Statement.
Modifications of share-based payments will be treated as replacement awards with
the cost of the incremental value recorded in the financial statements.

The Statement will be effective at the beginning of the first quarter of 2006.
As of the effective date, we will apply the Statement using a modified version
of prospective application. Under that transition method, compensation cost will
be recognized for (1) all awards granted after the required effective date and
to awards modified, cancelled, or repurchased after that date and (2) the
portion of awards granted subsequent to completion of an IPO and prior to the
effective date for which the requisite service has not yet been rendered, based
on the grant-date fair value of those awards calculated for pro forma
disclosures under SFAS 123.

The impact of this Statement on the Company in 2006 and beyond will depend on
various factors; among them being our future compensation strategy. We estimate
that the Company will incur stock option compensation expense of $435,000 for
the year ended December 31, 2006 related to the adoption of FAS123(R), $307,000
of which is expected to be tax-effected.

TRENDS AND DEVELOPMENTS IMPACTING OUR RECENT RESULTS

Certain trends emerged and developments have occurred that are important in
understanding our recent results and that are potentially significant in
assessing future performance.

Growth in our market areas. Our growth has been fueled in particular by the
significant population and economic growth of the greater Las Vegas area where
we conduct the majority of our operations. The growth in this area has coincided
with significant investments in the gaming and tourism industry. The significant
population increase has resulted in an increase in the acquisition of raw land
for residential and commercial development, the construction of residential
communities, shopping centers and office buildings, and the development and
expansion of the businesses and professions that provide essential goods and
services to this expanded population. Similarly, growth in the Phoenix, Tucson
and San Diego markets has contributed to our growth.

Asset sensitivity. Management uses various modeling strategies to manage the
repricing characteristics of our assets and liabilities. These models contain a
number of assumptions and can not take into account all the various factors that
influence the sensitivities


                                       37



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

TRENDS AND DEVELOPMENTS IMPACTING OUR RECENT RESULTS (continued)

of our assets and liabilities. Despite these limitations, most of our models at
December 31, 2005 indicated that our balance sheet was asset sensitive. A
company is considered to be asset sensitive if the amount of its interest
earning assets maturing or repricing within a certain time period exceed the
amount of its interest-bearing liabilities also maturing or repricing within the
same period. Being asset sensitive means generally that in times of rising
interest rates, a company's net interest income will increase, and in times of
falling interest rates, net interest income will decrease.

Because many of our assets are floating rate loans, which are funded by our
relatively large non-interest bearing deposit base, we are asset sensitive.
During 2003 and 2004, we mitigated this asset sensitivity and increased earnings
by investing in mortgage-backed securities funded by short-term FHLB
borrowings. This strategy had the effect of leveraging our excess capital to
produce incremental returns without incurring additional credit risk. In light
of the rising interest rate environment, beginning in the third quarter of 2004,
we discontinued this strategy.

We expect that if market interest rates continue to rise, our net interest
margin and our net interest income will be favorably impacted. See "Quantitative
and Qualitative Disclosure about Market Risk."

Impact of expansion on non-interest expense. We plan to open 9 additional
branches in our existing markets over the next 12 months. We anticipate that the
expansion will result in a significant increase in occupancy and equipment
expense. The cost to construct and furnish a new branch is approximately $2.5
million, excluding the cost to lease or purchase the land on which the branch is
located. Consistent with our historical growth strategy, as we open new offices
and expand both within and outside our current markets, we plan to recruit
seasoned relationship bankers, thereby increasing our salary expenses.
Initially, this increase in salary expense is expected to be higher than the
revenues to be received from the customer relationships brought to us by the new
relationship bankers.

Prior to 2005, Robert Sarver's management company received an annual fee of
$60,000 pursuant to a consulting agreement. The consulting agreement was
terminated in 2005 and Mr. Sarver now receives an annual salary of $500,000. In
addition, for the year ended December 31, 2005, Mr. Sarver received a
discretionary bonus in the amount of $500,000. His salary for 2006 will be
$550,000, and his target bonus is expected to be 100% of his salary.

Impact of acquisitions on net income. In January 2006, we announced definitive
agreements to acquire Intermountain First Bancorp and Bank of Nevada, both of
which are Las Vegas, Nevada based financial institutions. We anticipate that
these acquisitions will close in the second quarter of 2006, at which point we
will realize a significant increase in compensation, occupancy, and other
non-interest expenses. We anticipate that the net interest income we will
realize from these acquisitions will exceed the increase in non-interest
expenses. We further expect that these transactions will be immediately
accretive to our earnings per share.

Impact of service center on non-interest income. We have a service center
facility currently under development in the Las Vegas metropolitan area, which
we anticipate will become operational in the third quarter of 2006. The
anticipated cost to construct and furnish our service center will be between
$13.0 and $15.0 million. We expect that this facility, once completed, will
increase our capacity to provide courier, cash management and other business
services. We anticipate this will have a favorable impact on our non-interest
income.

RESULTS OF OPERATIONS

Our results of operations depend substantially on net interest income, which is
the difference between interest income on interest-earning assets, consisting
primarily of loans receivable, securities and other short-term investments, and
interest expense on interest-bearing liabilities, consisting primarily of
deposits and borrowings. Our results of operations are also dependent upon our
generation of non-interest income, consisting of income from trust and
investment advisory services and banking service fees. Other factors
contributing to our results of operations include our provisions for loan
losses, gains or losses on sales of securities and income taxes, as well as the
level of our non-interest expenses, such as compensation and benefits, occupancy
and equipment and other miscellaneous operating expenses.


                                       38



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

The following table sets forth a summary financial overview for the years ended
December 31, 2005 and 2004.



                                                         YEAR ENDED DECEMBER 31,
                                                      -----------------------------
                                                        2005       2004    INCREASE
                                                      --------   -------   --------
                                                              (IN THOUSANDS,
                                                        EXCEPT PER SHARE AMOUNTS)
                                                                  
CONSOLIDATED STATEMENT OF EARNINGS DATA:
Interest income                                       $134,910   $90,855    $44,055
Interest expense                                        32,568    19,720     12,848
                                                      --------   -------    -------
Net interest income                                    102,342    71,135     31,207
Provision for loan losses                                6,179     3,914      2,265
                                                      --------   -------    -------
Net interest income after provision for loan losses     96,163    67,221     28,942
Other income                                            12,138     8,726      3,412
Other expense                                           64,864    44,929     19,935
                                                      --------   -------    -------
Net income before income taxes                          43,437    31,018     12,419
Income tax expense                                      15,372    10,961      4,411
                                                      --------   -------    -------
Net income                                            $ 28,065   $20,057    $ 8,008
                                                      ========   =======    =======
Earnings per share - basic                            $   1.36   $  1.17    $  0.19
                                                      ========   =======    =======
Earnings per share - diluted                          $   1.24   $  1.09    $  0.15
                                                      ========   =======    =======


The 39.9% increase in net income in the year ended December 31, 2005 compared to
the year ended December 31, 2004 was due primarily to increases in net interest
income of $31.2 million and other income of $3.4 million, partially offset by an
increase of $19.9 million in other expenses and an additional provision for loan
losses of $2.3 million. The increase in net interest income was the result of an
increase in the volume of interest-earning assets, primarily loans, partially
offset by an increase in our cost of funds, due principally to a rising deposit
market rate environment and an increase in borrowing rates.

Net Interest Income and Net Interest Margin. The 43.9% increase in net interest
income for the year ended December 31, 2005 compared to the year ended December
31, 2004 was due to an increase in interest income of $44.1 million, reflecting
the effect of an increase of $548.1 million in average interest-bearing assets
which was funded with an increase of $619.9 million in average deposits, of
which $244.8 million were non-interest bearing.

The average yield on our interest-earning assets was 5.80% for the year ended
December 31, 2005, compared to 5.11% for the year ended December 31, 2004, an
increase of 13.5%. The increase in the yield on our interest-earning assets is
primarily a result of an increase in the yield earned on our loan portfolio and
a shift of funds previously held in securities into higher-yielding loans. The
increase in the yield on our loan portfolio from 6.26% in 2004 to 6.83% in 2005
was due to two factors: (1) market rates in 2005 were higher than those in 2004,
and therefore the new loans booked in 2005 were generally at higher rates than
the average portfolio rate at December 31, 2004; and (2) approximately one-half
of our loan portfolio is variable rate, and therefore these loans reprice at
higher rates in a rising rate environment as was seen in the year ended December
31, 2005.

The cost of our average interest-bearing liabilities increased to 2.27% in the
year ended December 31, 2005, from 1.68% in the year ended December 31, 2004,
which is a result of higher rates paid on deposit accounts and borrowings.

Our average rate on our interest-bearing deposits increased 46.2% from 1.43% for
the year ended December 31, 2004, to 2.09% for the year ended December 31, 2005,
reflecting increases in general market rates. Our average rate on total deposits
(including non-interest bearing deposits) increased 46.4% from 0.84% for the
year ended December 31, 2004, to 1.23% for the year ended December 31, 2005.

Our interest margin of 4.40% for the year ended December 31, 2005 was higher
than our margin for the previous year of 4.00% due to an increase in our yield
on interest-bearing assets, offset by a smaller relative increase in our overall
cost of funds.

Average Balances and Average Interest Rates. The table below sets forth balance
sheet items on a daily average basis for the years ended December 31, 2005 and
2004 and presents the daily average interest rates earned on assets and the
daily average interest rates paid on liabilities for such periods. Non-accrual
loans have been included in the average loan balances. Securities include
securities available for sale and securities held to maturity. Securities
available for sale are carried at amortized cost for purposes of calculating the
average rate received on taxable securities below.


                                       39



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)



                                                                     YEAR ENDED DECEMBER 31,
                                             -----------------------------------------------------------------------
                                                            2005                                 2004
                                             ----------------------------------   ----------------------------------
                                               AVERAGE                 AVERAGE      AVERAGE                 AVERAGE
($ IN THOUSANDS)                               BALANCE    INTEREST   YIELD/COST     BALANCE    INTEREST   YIELD/COST
                                             ----------   --------   ----------   ----------   --------   ----------
                                                                                        
EARNING ASSETS
Securities:
   Taxable                                   $  729,884   $ 29,099      3.99%     $  781,407    $30,373      3.89%
   Tax-exempt (1)                                 8,558        394      4.60           7,198        341      4.74
                                             ----------   --------                ----------    -------
   Total securities                             738,442     29,493      3.99         788,605     30,714      3.89
Federal funds sold and other                     71,450      2,341      3.28          25,589        293      1.15
Loans (1) (2) (3)                             1,501,089    102,481      6.83         947,848     59,311      6.26
Federal Home Loan Bank stock                     13,482        595      4.41          14,320        537      3.75
                                             ----------   --------                ----------    -------
   Total earnings assets                      2,324,463    134,910      5.80       1,776,362     90,855      5.11
                                                          --------                              -------

NON-EARNING ASSETS
Cash and due from banks                          77,347                               67,334
Allowance for loan losses                       (17,954)                             (13,370)
Bank-owned life insurance                        36,200                               25,544
Other assets                                     68,684                               47,077
                                             ----------                           ----------
   TOTAL ASSETS                              $2,488,740                           $1,902,947
                                             ==========                           ==========

INTEREST BEARING LIABILITIES
Interest-bearing deposits:
   Interest checking                         $  109,415        594      0.54%     $   73,029        142      0.19%
   Savings and money market                     827,886     16,908      2.04         561,744      7,585      1.35
   Time deposits                                287,083      8,044      2.80         214,515      4,396      2.05
                                             ----------   --------                ----------    -------
   Total interest-bearing deposits            1,224,384     25,546      2.09         849,288     12,123      1.43
Short-term borrowings                           117,703      3,234      2.75         239,175      4,472      1.87
Long-term debt                                   63,754      1,675      2.63          54,733      1,586      2.90
Junior subordinated debt                         30,928      2,113      6.83          30,928      1,539      4.98
                                             ----------   --------                ----------    -------
   Total interest-bearing liabilities         1,436,769     32,568      2.27       1,174,124     19,720      1.68
                                                          --------                              -------

NON-INTEREST BEARING LIABILITIES
Noninterest-bearing demand deposits             845,581                              600,790
Other liabilities                                11,106                               13,268
Stockholders' equity                            195,284                              114,765
                                             ----------                           ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $2,488,740                           $1,902,947
                                             ==========                           ==========
Net interest income and margin (4)                        $102,342      4.40%                   $71,135      4.00%
                                                          ========      ====                    =======      ====
Net interest spread (5)                                                 3.53%                                3.43%
                                                                        ====                                 ====


(1)  Yields on loans and securities have not been adjusted to a tax equivalent
     basis.

(2)  Net loan fees of $1,202,000 and $872,000 are included in the yield
     computation for 2005 and 2004, respectively.

(3)  Includes average non-accrual loans of $481,000 in 2005 and $426,000 in
     2004.

(4)  Net interest margin is computed by dividing net interest income by total
     average earning assets.

(5)  Net interest spread represents average yield earned on interest-earning
     assets less the average rate paid on interest-bearing liabilities.

Net Interest Income. The table below sets forth the relative impact on net
interest income of changes in the volume of earning assets and interest-bearing
liabilities and changes in rates earned and paid by us on such assets and
liabilities. For purposes of this table, non-accrual loans have been included in
the average loan balances.


                                       40



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)



                                    YEAR ENDED DECEMBER 31,
                                          2005 V. 2004
                                      INCREASE (DECREASE)
                                     DUE TO CHANGES IN (1)
                                  ---------------------------
                                   VOLUME     RATE     TOTAL
                                  -------   -------   -------
                                         (IN THOUSANDS)
                                             
Interest on securities:
   Taxable                        $(2,054)  $   780   $(1,274)
   Tax-exempt                          63       (10)       53
   Federal funds sold and other     1,503       545     2,048
Loans                              37,770     5,400    43,170
Federal Home Loan Bank stock          (37)       95        58
                                  -------   -------   -------
Total interest income              37,245     6,810    44,055
                                  -------   -------   -------
Interest expense:
   Interest checking                  198       254       452
   Savings and money market         5,435     3,888     9,323
   Time deposits                    2,033     1,615     3,648
   Short-term borrowings           (3,338)    2,100    (1,238)
   Long-term debt                     237      (148)       89
   Junior subordinated debt            --       574       574
                                  -------   -------   -------
Total interest expense              4,565     8,283    12,848
                                  -------   -------   -------
Net increase (decrease)           $32,680   $(1,473)  $31,207
                                  =======   =======   =======


(1)  Changes due to both volume and rate have been allocated to volume changes.

Provision for Loan Losses. The provision for loan losses in each period is
reflected as a charge against earnings in that period. The provision is equal to
the amount required to maintain the allowance for loan losses at a level that,
in our judgment, is adequate to absorb probable loan losses inherent in the loan
portfolio.

Our provision for loan losses increased to $6.2 million for the year ended
December 31, 2005, from $3.9 million for the year ended December 31, 2004. The
provision increased primarily because of loan growth of $604.8 million for the
year ended December 31, 2005, compared to loan growth of $455.5 million for the
year ended December 31, 2004, an increase of $149.3 million. Also, net
charge-offs increased from the year ended December 31, 2004 to the year ended
December 31, 2005 from $21,000 to $258,000.

     Non-Interest Income. We earn non-interest income primarily through fees
     related to:

          -    Trust and investment advisory services,

          -    Services provided to deposit customers, and

          -    Services provided to current and potential loan customers.

The following tables present, for the periods indicated, the major categories of
non-interest income:



                                              YEAR ENDED
                                             DECEMBER 31,
                                           ----------------    INCREASE
                                             2005     2004    (DECREASE)
                                           -------   ------   ----------
                                                   (IN THOUSANDS)
                                                     
Trust and investment advisory services     $ 5,699   $2,896    $ 2,803
Service charges                              2,495    2,333        162
Income from bank owned life insurance        1,664    1,203        461
Investment securities losses, net               69       19         50
Other                                        2,211    2,275        (64)
                                           -------   ------    -------
Total non-interest income                  $12,138   $8,726    $ 3,412
                                           =======   ======    =======



                                       41



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

The $3.4 million, or 39.1%, increase in non-interest income was influenced by
several factors. Premier Trust, Inc. was purchased on December 30, 2003, and
Miller/Russell & Associates, Inc. was purchased on May 17, 2004. Collectively,
these subsidiaries produced $5.7 million in trust and investment advisory fees
in the year ended December 31, 2005, compared to $2.9 million in the year ended
December 31, 2004. The increase was due to a full year of activity recorded by
Miller/Russell & Associates, Inc. in 2005 compared to less than eight months
activity in the prior year. Also, trust assets and assets under management have
increased at both entities from a combined amount of $999 million at December
31, 2004 to $1.41 billion at December 31, 2005.

Service charges increased $162,000 from 2004 to 2005 due to higher deposit
balances and the growth in our customer base.

Income from bank owned life insurance, or BOLI, increased $461,000. We purchased
additional BOLI products with a cash surrender value of $24.0 million in the
third quarter of 2005 to help offset employee benefit costs.

Non-Interest Expense. The following table presents, for the periods indicated,
the major categories of non-interest expense:



                                                                    YEAR ENDED
                                                                   DECEMBER 31,
                                                                -----------------    INCREASE
                                                                  2005      2004    (DECREASE)
                                                                -------   -------   ----------
                                                                        (IN THOUSANDS)
                                                                           
Salaries and employee benefits                                  $36,816   $25,590     $11,226
Occupancy                                                         9,819     7,309       2,510
Customer service                                                  3,720     1,998       1,722
Advertising, public relations and business development            2,806     1,672       1,134
Legal, professional and director fees                             2,051     1,405         646
Correspondent banking service charges and wire transfer costs     1,651     1,260         391
Audits and exams                                                  1,538       935         603
Supplies                                                          1,083       838         245
Data processing                                                   1,053       641         412
Telephone                                                           759       578         181
Insurance                                                           752       540         212
Travel and automobile                                               684       467         217
Other                                                             2,132     1,696         436
                                                                -------   -------     -------
   Total non-interest expense                                   $64,864   $44,929     $19,935
                                                                =======   =======     =======


Non-interest expense grew $19.9 million, or 44.4%. This growth is attributable
to our overall growth, and specifically to the opening of new branches and the
hiring of new relationship officers and other employees. At December 31, 2005,
we had 537 full-time equivalent employees compared to 424 at December 31, 2004.
Two banking branches were opened during 2005, and senior managers and
relationship officers for various branches expected to open in 2006 were hired
in late 2004 and into 2005. Miller/Russell & Associates, Inc. was acquired in
May 2004, and therefore 2005 was the first year for which a full twelve months
of activity is reflected. The increase in salaries and occupancy expenses
related to the growth discussed above totaled $13.7 million, which is 69% of the
total increase in non-interest expenses.

Also affecting non-interest expenses was the increase in our customer service
costs. This line item grew $1.7 million, or 86.2%, due primarily to an increase
in analysis earnings credits paid to certain title company depositors, due to
higher balances maintained by the title companies and higher earnings credit
rates during the year ended December 31, 2005 compared to those during the year
ended December 31, 2004. We provide an analysis earnings credit for certain
title company depositors, which is calculated by applying a variable crediting
rate to such customers' average monthly deposit balances, less any deposit
service charges incurred. We then purchase external services on their behalf
based on the amount of the earnings credit. These external services, which are
commonly offered in the banking industry, include courier, bookkeeping and data
processing services. The costs associated with these earnings credits will
increase or decrease based on movements in crediting rates and fluctuations in
the average monthly deposit balances.

Advertising, public relations and business development increased $1.1 million,
or 67.8%. During 2005, BankWest of Nevada entered into a sponsorship agreement
with the Las Vegas Monorail, whereby BankWest pays a fee in exchange for the
right to showcase the name of the bank on the exterior of one monorail train,
and to display promotional material on the interior of the train. Further,
BankWest of Nevada gained exclusive ATM rights to the Las Vegas Monorail
stations. The design and contract costs associated with this sponsorship are
reflected in this line item and account for the majority of the increase.


                                       42



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

Other non-interest expense increased $3.3 million from December 31, 2004 to
December 31, 2005. Other non-interest expense increased, in general, as a result
of the growth in assets and operations of the Company, and due to the increased
costs associated with being a public company, including audit, legal, compliance
and insurance expenses.

Provision for Income Taxes. We recorded tax provisions of $15.4 million and
$11.0 million for the years ended December 31, 2005 and 2004, respectively. Our
effective tax rates were 35.4% and 35.3% for 2005 and 2004, respectively.

YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

The following table sets forth a summary financial overview for the years ended
December 31, 2004 and 2003.



                                                          YEAR ENDED
                                                         DECEMBER 31,
                                                      -----------------    INCREASE
                                                        2004      2003    (DECREASE)
                                                      -------   -------   ----------
                                                        ($ IN THOUSANDS, EXCEPT PER
                                                                SHARE DATA)
                                                                 
CONSOLIDATED STATEMENT OF EARNINGS DATA:
Interest income                                       $90,855   $53,823   $ 37,032
Interest expense                                       19,720    12,798      6,922
                                                      -------   -------   --------
Net interest income                                    71,135    41,025     30,110
Provision for loan losses                               3,914     5,145     (1,231)
                                                      -------   -------   --------
Net interest income after provision for loan losses    67,221    35,880     31,341
Other income                                            8,726     4,270      4,456
Other expense                                          44,929    27,290     17,639
                                                      -------   -------   --------
Net income before income taxes                         31,018    12,860     18,158
Income tax expense                                     10,961     4,171      6,790
                                                      -------   -------   --------
Net income                                            $20,057   $ 8,689   $ 11,368
                                                      =======   =======   ========
Earnings per share - basic                            $  1.17   $  0.61   $   0.56
                                                      =======   =======   ========
Earnings per share - diluted                          $  1.09   $  0.59   $   0.50
                                                      =======   =======   ========


The 130.8% increase in net income in the year ended December 31, 2004 compared
to the year ended December 31, 2003 was attributable primarily to an increase in
net interest income of $30.1 million, a $4.5 million increase in other income
and a $1.2 million decrease to the provision for loan losses, partially offset
by a $17.6 million increase to other expenses. The increase in net interest
income was the result of an increase in the volume of interest-earning assets,
primarily loans, and a decrease in our cost of funds, due principally to an
increase in non-interest bearing deposits.

Net Interest Income and Net Interest Margin. The 73.4% increase in net interest
income for the year ended December 31, 2004 compared to the year ended December
31, 2003 was due to an increase in interest income of $37.0 million, reflecting
the effect of an increase of $706.4 million in average interest-bearing assets
which was funded with an increase of $558.7 million in average deposits, of
which $255.5 million were non-interest bearing.

The average yield on our interest-earning assets was 5.11% for the year ended
December 31, 2004, compared to 5.03% for the year ended December 31, 2003, an
increase of 1.6%. The slight increase in the yield on our interest-earning
assets is a result of an increase in the yield earned on our securities
portfolio and a shift of federal funds sold into higher-yielding securities,
offset by a decline in the yield on our loan portfolio as fixed rate loans
repriced at lower interest rate levels. The increase in the yield on our
securities portfolio from 3.70% in 2003 to 3.89% in 2004 was due to two factors:
(1) most of the growth of our securities portfolio was in mortgage-backed
securities, which typically yield more than our other securities classes; and
(2) premium amortization on our mortgage-backed securities portfolio decreased
from 2003 to 2004 due to less prepayment activity on the underlying mortgages.

The cost of our average interest-bearing liabilities decreased to 1.68% in the
year ended December 31, 2004, from 1.76% in the year ended December 31, 2003,
which is a result of lower rates paid on deposit accounts, offset by higher
average balances and rates paid on borrowings.


                                       43



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

Our average rate on our interest-bearing deposits decreased 4.0% from 1.49% for
the year ended December 31, 2003, to 1.43% for the year ended December 31, 2004,
reflecting reductions in general market rates. Our average rate on total
deposits (including non-interest bearing deposits) decreased 8.7% from 0.92% for
the year ended December 31, 2003, to 0.84% for the year ended December 31, 2004.

Our interest margin of 4.00% for the year ended December 31, 2004 was higher
than our margin for the previous year of 3.83% due to an increase in our yield
on interest-bearing assets and a decrease in our overall cost of funds. Both of
which are primarily attributable to an increase in the volume of interest
earning assets and interest bearing liabilities as opposed to a change in rates.

Average Balances and Average Interest Rates. The table below sets forth balance
sheet items on a daily average basis for the years ended December 31, 2004 and
2003 and presents the daily average interest rates earned on assets and the
daily average interest rates paid on liabilities for such periods. Non-accrual
loans have been included in the average loan balances. Securities include
securities available for sale and securities held to maturity. Securities
available for sale are carried at amortized cost for purposes of calculating the
average rate received on taxable securities below.



                                                                     YEAR ENDED DECEMBER 31,
                                             -----------------------------------------------------------------------
                                                            2004                                 2003
                                             ----------------------------------   ----------------------------------
                                               AVERAGE                 AVERAGE      AVERAGE                 AVERAGE
($ IN THOUSANDS)                               BALANCE    INTEREST   YIELD/COST     BALANCE    INTEREST   YIELD/COST
                                             ----------   --------   ----------   ----------   --------   ----------
                                                                                        
EARNING ASSETS
Securities:
   Taxable                                   $  781,407    $30,373      3.89%     $  432,425    $15,938      3.69%
   Tax-exempt(1)                                  7,198        341      4.74           7,266        346      4.76
                                             ----------    -------                ----------    -------
   Total securities                             788,605     30,714      3.89         439,691     16,284      3.70
Federal funds sold                               25,589        293      1.15          52,735        578      1.10
Loans(1)(2)(3)                                  947,848     59,311      6.26         571,501     36,792      6.44
Federal Home Loan Bank stock                     14,320        537      3.75           6,063        169      2.79
                                             ----------    -------                ----------    -------
   Total earnings assets                      1,776,362     90,855      5.11       1,069,990     53,823      5.03
                                                           -------                              -------
NON-EARNING ASSETS
Cash and due from banks                          67,334                               41,415
Allowance for loan losses                       (13,370)                              (8,783)
Bank-owned life insurance                        25,544                               17,934
Other assets                                     47,077                               28,264
                                             ----------                           ----------
   TOTAL ASSETS                              $1,902,947                           $1,148,820
                                             ==========                           ==========
INTEREST BEARING LIABILITIES
Interest-bearing deposits:
   Interest checking                         $   73,029        142      0.19%     $   51,723         93      0.18%
   Savings and money market                     561,744      7,585      1.35         336,012      4,358      1.30
   Time deposits                                214,515      4,396      2.05         158,418      3,707      2.34
                                             ----------    -------                ----------    -------
   Total interest-bearing deposits              849,288     12,123      1.43         546,153      8,158      1.49
Short-term borrowings                           239,175      4,472      1.87         111,258      1,671      1.50
Long-term debt                                   54,733      1,586      2.90          37,701      1,475      3.91
Junior subordinated debt                         30,928      1,539      4.98          30,928      1,494      4.83
                                             ----------    -------                ----------    -------
   Total interest-bearing liabilities         1,174,124     19,720      1.68         726,040     12,798      1.76
                                                           -------                              -------
NON-INTEREST BEARING LIABILITIES
Noninterest-bearing deposits                    600,790                              345,274
Other liabilities                                13,268                                6,230
Stockholders' equity                            114,765                               71,276
                                             ----------                           ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $1,902,947                           $1,148,820
                                             ==========                           ==========
Net interest income and margin (4)                         $71,135      4.00%                   $41,025      3.83%
                                                           =======      ====                    =======      ====
Net interest spread (5)                                                 3.43%                                3.27%
                                                                        ====                                 ====



                                       44



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

(1)  Yields on loans and securities have not been adjusted to a tax equivalent
     basis.

(2)  Net loan fees of $872,000 and $810,000 are included in the yield
     computation for 2004 and 2003, respectively.

(3)  Includes average non-accrual loans of $426,000 in 2004 and $393,000 in
     2003.

(4)  Net interest margin is computed by dividing net interest income by total
     average earning assets.

(5)  Net interest spread represents average yield earned on interest-earning
     assets less the average rate paid on interest-bearing liabilities.

Net Interest Income. The table below sets forth the relative impact on net
interest income of changes in the volume of earning assets and interest-bearing
liabilities and changes in rates earned and paid by us on such assets and
liabilities. For purposes of this table, non-accrual loans have been included in
the average loan balances.



                                YEAR ENDED DECEMBER 31,
                                     2004 V. 2003
                                  INCREASE (DECREASE)
                                 DUE TO CHANGES IN (1)
                              ---------------------------
                               VOLUME     RATE     TOTAL
                              -------   -------   -------
                                    (IN THOUSANDS)
                                         
Interest on securities:
   Taxable                    $13,565   $   870   $14,435
   Tax-exempt                      (3)       (2)       (5)
   Federal funds sold            (311)       26      (285)
Loans                          23,550    (1,031)   22,519
Other investments                 310        58       368
                              -------   -------   -------
Total interest income          37,111       (79)   37,032
                              -------   -------   -------
Interest expense:
   Interest checking               41         8        49
   Savings and Money market     3,048       179     3,227
   Time deposits                1,150      (461)      689
   Short-term borrowings        2,392       409     2,801
   Long-term debt                 494      (383)      111
   Junior subordinated debt        --        45        45
                              -------   -------   -------
Total interest expense          7,125      (203)    6,922
                              -------   -------   -------
Net increase                  $29,986   $   124   $30,110
                              =======   =======   =======


(1)  Changes due to both volume and rate have been allocated to volume changes.

Provision for Loan Losses. The provision for loan losses in each period is
reflected as a charge against earnings in that period. The provision is equal to
the amount required to maintain the allowance for loan losses at a level that,
in our judgment, is adequate to absorb probable loan losses inherent in the loan
portfolio.

Our provision for loan losses declined to $3.9 million for the year ended
December 31, 2004, from $5.1 million for the year ended December 31, 2003. The
provision declined because (1) net charge-offs decreased from $953,000 in 2003
to $21,000 in 2004; (2) our asset quality has remained high, with nonperforming
loans as a percentage of total loans at 0.13% at December 31, 2004 and 0.04% at
December 31, 2003; and (3) we have maintained a relatively low level of
charge-offs over the last five years, which yielded lower loss experience
factors in our required reserve calculations. These factors are adjusted
periodically to reflect this historical experience and were most recently
adjusted in December 2004.

Non-Interest Income. WE earn non-interest income primarily through fees related
to:

     -    Trust and investment advisory services,

     -    Services provided to deposit customers, and

     -    Services provided to current and potential loan customers.

The following tables present, for the periods indicated, the major categories of
non-interest income:


                                       45



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)



                                               YEAR ENDED
                                              DECEMBER 31,
                                            ----------------    INCREASE
                                             2004     2003     (DECREASE)
                                            ------   -------   ----------
                                                    (IN THOUSANDS)
                                                      
Trust and investment advisory services      $2,896   $    --     $2,896
Service charges                              2,333     1,998        335
Income from bank owned life insurance        1,203       967        236
Investment securities gains (losses), net       19      (265)       284
Other                                        2,275     1,570        705
                                            ------   -------     ------
   Total non-interest income                $8,726   $ 4,270     $4,456
                                            ======   =======     ======


The $4.5 million, or 104.4%, increase in non-interest income was influenced by
several factors. Premier Trust, Inc. was purchased on December 30, 2003, and
Miller/Russell & Associates, Inc. was purchased on May 17, 2004. Collectively,
these subsidiaries produced $2.9 million in trust and investment advisory fees
in the year ended December 31, 2004. We had no such income in 2003.

Service charges increased $335,000 from 2003 to 2004 due to higher deposit
balances and the growth in our customer base.

Income from bank owned life insurance, or BOLI, increased $236,000. We purchased
the BOLI products in 2003 to help offset employee benefit costs. The first year
for which we earned twelve months' income from BOLI was 2004.

Other income increased $705,000, due in part, to the sale and servicing of SBA
loans by Alliance Bank of Arizona, which resulted in other income of $341,000,
and the increase in ATM fees, income from wire transfer activity and debit card
income.

Non-Interest Expense. The following table presents, for the periods indicated,
the major categories of non-interest expense:



                                                                    YEAR ENDED
                                                                   DECEMBER 31,
                                                                -----------------    INCREASE
                                                                  2004      2003    (DECREASE)
                                                                -------   -------   ----------
                                                                        (IN THOUSANDS)
                                                                           
Salaries and employee benefits                                  $25,590   $15,615    $ 9,975
Occupancy                                                         7,309     4,820      2,489
Customer service                                                  1,998       752      1,246
Advertising, public relations and business development            1,672       989        683
Legal, professional and director fees                             1,405     1,111        294
Correspondent banking service charges and wire transfer costs     1,260       512        748
Audits and exams                                                    935       435        500
Supplies                                                            838       619        219
Data processing                                                     641       466        175
Telephone                                                           578       424        154
Insurance                                                           540       305        235
Travel and automobile                                               467       261        206
Organizational costs                                                 --       604       (604)
Other                                                             1,696       377      1,319
                                                                -------   -------    -------
   Total non-interest expense                                   $44,929   $27,290    $17,639
                                                                =======   =======    =======


Non-interest expense grew $17.6 million, or 64.6%. This growth is attributable
to our overall growth, and specifically to the opening of new branches and the
hiring of new relationship officers and other employees, particularly at
Alliance Bank of Arizona and Torrey Pines Bank, both of which opened during the
year ended December 31, 2003. At December 31, 2004, we had 454 full-time
equivalent employees compared to 317 at December 31, 2003. Miller/Russell was
acquired in 2004, Premier Trust was acquired on December 30, 2003, and three
banking branches were opened during 2004. Two bank branches were opened at the
end of 2003, causing a minimal impact on 2003 expenses. The increase in salaries
and occupancy expenses related to the above totaled $12.5 million, which is 71%
of the total increase in non-interest expenses.

Also affecting non-interest expenses was the increase in our customer service
costs. This line item grew $1.2 million, or 166%, due primarily to an increase
in analysis earnings credits paid to certain title company depositors of
$606,000, due to higher balances


                                       46



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS (continued)

maintained by the title companies and higher earnings credit rates at the end of
2004. We provide an analysis earnings credit for certain title company
depositors, which is calculated by applying a variable crediting rate to such
customers' average monthly deposit balances, less any deposit service charges
incurred. We then purchase external services on their behalf based on the amount
of the earnings credit. These external services, which are commonly offered in
the banking industry, include courier, bookkeeping and data processing
services. The costs associated with these earnings credits will increase or
decrease based on movements in crediting rates and fluctuations in the average
monthly deposit balances. The remaining increase is attributable to growth in
our customer base and branch locations.

Our correspondent banking service charges and wire transfer costs increased
$748,000, or 146.1%. At the end of 2003, we converted to a new wire transfer
system which allowed for a much more efficient wire transfer process. This
effectively allowed us to handle a much higher volume of wire transfers at
current staffing levels, although we incurred additional software and data
processing costs in 2004 that are reflected in this line item.

We incurred $604,000 of organizational costs in 2003 related to the opening of
Alliance Bank of Arizona and Torrey Pines Bank the same year. No new banks were
opened in 2004, and thus no organizational costs were incurred.

Other non-interest expense increased $1.3 million from December 31, 2003 to
December 31, 2004. Other non-interest expense increased, in general, as a result
of the growth in assets and operations of the two de novo banks and overall
growth of BankWest of Nevada. The first full year of operations for the two de
novo banks was 2004.

Provision for Income Taxes. We recorded tax provisions of $11.0 million and
$4.2 million for the years ended December 31, 2004 and 2003, respectively. Our
effective tax rates were 35.3% and 32.4% for 2004 and 2003, respectively. The
increase of the effective tax rates from 2003 to 2004 was primarily due to state
income taxes, as 2004 was the first full year of operations in Arizona and
California.

FINANCIAL CONDITION

TOTAL ASSETS

On a consolidated basis, our total assets as of December 31, 2005, December 31,
2004 and December 31, 2003 were $2.9 billion, $2.2 billion and $1.6 billion,
respectively. The overall increase from December 31, 2004 to December 31, 2005
was primarily due to a $604.8 million, or 50.9%, increase in gross loans, a
$58.9 million, or 51.1%, increase in cash and cash equivalents and a $29.1
million, or 99.0%, increase in premises and equipment. The growth in assets from
December 31, 2003 to December 31, 2004 was primarily due to a $455.5 million, or
62.1%, increase in gross loans and a $49.5 million, or 75.1%, increase in cash
and cash equivalents.

LOANS

Our gross loans, including deferred loan fees, on a consolidated basis as of
December 31, 2005, December 31, 2004, and December 31, 2003 were $1.8 billion,
$1.2 billion and $733.1 million, respectively. Since December 31, 2001,
residential real estate loans experienced the highest percentage growth within
the portfolio, growing from $18.1 million to $272.9 million as of December 31,
2005. Our overall growth in loans from December 31, 2001 to December 31, 2005 is
consistent with our focus and strategy to grow our loan portfolio by focusing on
markets which we believe have attractive growth prospects.

The following table shows the amounts of loans outstanding by type of loan at
the end of each of the periods indicated.



                                                             DECEMBER 31,
                                       --------------------------------------------------------
                                          2005         2004        2003       2002       2001
                                       ----------   ----------   --------   --------   --------
                                                            (IN THOUSANDS)
                                                                        
Construction and land development      $  432,668   $  323,176   $195,182   $127,974   $ 82,604
Commercial real estate                    727,210      491,949    324,702    209,834    208,683
Residential real estate                   272,861      116,360     42,773     21,893     18,067
Commercial and industrial                 342,452      241,292    159,889     94,411     85,050
Consumer                                   20,434       17,682     11,802     10,281     13,156
Net deferred loan fees                     (2,288)      (1,924)    (1,270)       (38)      (350)
                                        ---------    ---------    -------    -------    -------
   Gross loans, net of deferred fees    1,793,337    1,188,535    733,078    464,355    407,210
Less: Allowance for loan losses           (21,192)    (15,271)    (11,378)    (6,449)    (6,563)
                                        ---------    ---------    -------    -------    -------
                                       $1,772,145   $1,173,264   $721,700   $457,906   $400,647
                                        =========    =========    =======    =======    =======



                                       47



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

LOANS (continued)

The following tables set forth the amount of loans outstanding by type of loan
as of December 31, 2005 which were contractually due in one year or less, more
than one year and less than five years, and more than five years based on
ramaining scheduled repayments of principal. Lines of credit or other loans have
no stated final maturity and no stated schedule of repayments are reported as
due in one year or less. The tables also present an analysis of the rate
structure for loans within the same maturity time periods.



                                                      DECEMBER 31, 2005
                                       -----------------------------------------------
                                       DUE WITHIN    DUE 1-5    DUE OVER
                                        ONE YEAR      YEARS    FIVE YEARS      TOTAL
                                       ----------   --------   ----------   ----------
                                                        (IN THOUSANDS)
                                                                
Construction and land development       $322,875    $ 82,793    $ 27,000    $  432,668
Commercial real estate                    96,309     212,339     418,562       727,210
Residential real estate                   17,184      19,105     236,572       272,861
Commercial and industrial                231,952      99,153      11,347       342,452
Consumer                                  13,089       6,957         388        20,434
Net deferred loan fees                        --          --          --        (2,288)
                                        --------    --------    --------    ----------
   Gross loans, net of deferred fees     681,409     420,347     693,869     1,793,337
Less: Allowance for loan losses               --          --          --       (21,192)
                                        --------    --------    --------    ----------
                                        $681,409    $420,347    $693,869    $1,772,145
                                        ========    ========    ========    ==========
Interest rates:
   Fixed                                $ 73,633    $248,559    $452,664    $  774,856
   Variable                              607,776     171,788     241,205     1,020,769
Net deferred loan fees                        --          --          --        (2,288)
                                        --------    --------    --------    ----------
   Gross loans, net of deferred fees    $681,409    $420,347    $693,869    $1,793,337
                                        ========    ========    ========    ==========


Concentrations. Our loan portfolio has a concentration of loans in commercial
real-estate related loans and includes significant credit exposure to the
commercial real estate industry. As of December 31, 2005, December 31, 2004 and
December 31, 2003, commercial real estate-related loans comprised 64.5%, 68.4%
and 70.7% of total gross loans, respectively. Substantially all of these loans
are secured by first liens with an initial loan to value ratio of generally no
more than 80%. Approximately one-half of these commercial real estate loans are
owner occupied. One-to-four family residential real estate loans have a lower
risk than commercial real estate and construction and land development loans due
to lower loan balances to single borrowers. Approximately 29% of our residential
real estate portfolio is comprised of interest only loans which have an average
loan-to-value of less than 60%. Our policy for requiring collateral is to obtain
collateral whenever it is available or desirable, depending upon the degree of
risk we are willing to accept. Repayment of loans is expected from the sale
proceeds of the collateral or from the borrower's cash flows. Deterioration in
the performance of the economy or real estate values in our primary market
areas, in particular, could have an adverse impact on collectibility, and
consequently have an adverse effect on our profitability.

Non-Performing Assets. Non-performing loans include loans past due 90 days or
more and still accruing interest, non-accrual loans, restructured loans, and
other real estate owned, or OREO. In general, loans are placed on non-accrual
status when we determine timely recognition of interest to be in doubt due to
the borrower's financial condition and collection efforts. Restructured loans
have modified terms to reduce either principal or interest due to deterioration
in the borrower's financial condition. OREO results from loans where we have
received physical possession of the borrower's assets. The following table
summarizes the loans for which the accrual of interest has been discontinued,
loans past due 90 days or more and still accruing interest, restructured loans,
and OREO.


                                       48



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

LOANS (continued)



                                                                DECEMBER 31,
                                                   ---------------------------------------
                                                    2005    2004     2003    2002     2001
                                                   -----   ------   -----   ------   -----
                                                                (IN THOUSANDS)
                                                                      
Total non-accrual loans                            $ 107   $1,591   $ 210   $1,039   $ 686
Loans past due 90 days or more and still accruing     34        2      65      317     236
Restructured loans                                    --       --      --    2,193      --
Other real estate owned (OREO)                        --       --      --       --      79
Non-accrual loans to gross loans                    0.01%    0.13%   0.03%    0.22%   0.17%
Loans past due 90 days or more and still
   accruing to total loans                          0.00     0.00    0.01     0.04    0.05
Interest income received on nonaccrual loans       $   1   $   61   $   6   $  158   $  49
Interest income that would have been recorded
   under the original terms of the loans              10       96      29      242     108


As of December 31, 2005 and December 31, 2004, non-accrual loans totaled
$107,000 and $1.6 million, respectively. Non-accrual loans at December 31, 2005
consisted of 3 loans with no single loan having a principal balance greater than
$80,000.

OREO Properties. As of December 31, 2005 and December 31, 2004, we did not have
any OREO properties. One OREO property with a carrying value of $79,000 was sold
during February 2002.

Impaired Loans. A loan is impaired when it is probable we will be unable to
collect all contractual principal and interest payments due in accordance with
the terms of the loan agreement. Impaired loans are measured based on the
present value of expected future cash flows discounted at the loan's effective
interest rate or, as a practical expedient, at the loan's observable market
price or the fair value of the collateral if the loan is collateral dependent.
The categories of non-accrual loans and impaired loans overlap, although they
are not coextensive. A loan can be placed on non-accrual status due to payment
delinquency or uncertain collectibility but is not considered impaired, if it is
probable that we will collect all amounts due in accordance with the original
contractual terms of the loan. We consider all circumstances regarding the loan
and borrower on an individual basis when determining whether a loan is impaired
such as the collateral value, reasons for the delay, payment record, the amount
past due, and number of days past due.

As of December 31, 2005, December 31, 2004 and December 31, 2003, the aggregate
total amount of loans classified as impaired was $107,000, $1.7 million and
$333,000, respectively. The total specific allowance for loan losses related to
these loans was $26,000, $498,000 and $130,000 for December 31, 2005 and
December 31, 2004 and 2003, respectively.

The amount of interest income recognized on impaired loans for the years ended
December 31, 2005, 2004 and 2003 was $1,000, $61,000 and $6,000, respectively.
We would have recorded interest income of $10,000, $96,000 and $29,000 on
non-accrual loans had the loans been current for the years ended December 31,
2005, 2004 and 2003, respectively.

ALLOWANCE FOR LOAN LOSSES

Like all financial institutions, we must maintain an adequate allowance for loan
losses. The allowance for loan losses is established through a provision for
loan losses charged to expense. Loans are charged against the allowance for loan
losses when we believe that collectibility of the principal is unlikely.
Subsequent recoveries, if any, are credited to the allowance. The allowance is
an amount that we believe will be adequate to absorb probable losses on existing
loans that may become uncollectible, based on evaluation of the collectibility
of loans and prior credit loss experience, together with the other factors noted
earlier.

Our allowance for loan loss methodology incorporates several quantitative and
qualitative risk factors used to establish the appropriate allowance for loan
loss at each reporting date. Quantitative factors include our historical loss
experience, peer group experience, delinquency and charge-off trends, collateral
values, changes in non-performing loans, other factors, and information about
individual loans including the borrower's sensitivity to interest rate
movements. Qualitative factors include the economic condition of our operating
markets and the state of certain industries. Specific changes in the risk
factors are based on perceived risk of similar groups of loans classified by
collateral type, purpose and terms. Statistics on local trends, peers, and an
internal five-year loss history are also incorporated into the allowance. Due to
the credit concentration of our loan portfolio in real estate secured loans, the
value of collateral is heavily dependent on real estate values in Southern
Nevada, Arizona and Southern California. While management uses the best
information available to make its evaluation, future adjustments to the
allowance may be necessary if there are significant changes in economic or other
conditions. In addition, the Federal Deposit Insurance Corporation, or FDIC, and
state banking regulatory agencies, as an integral part of their examination
processes, periodically review the Banks' allowance for loan losses, and may
require us to make additions to the allowance based on their judgment about
information available to them


                                       49



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

ALLOWANCE FOR LOAN LOSSES (continued)

at the time of their examinations. Management periodically reviews the
assumptions and formulae used in determining the allowance and makes adjustments
if required to reflect the current risk profile of the portfolio.

The allowance consists of specific and general components. The specific
allowance relates to watch credits, criticized loans, and impaired loans. For
such loans that are also classified as impaired, an allowance is established
when the discounted cash flows (or collateral value or observable market price)
of the impaired loan are lower than the carrying value of that loan, pursuant to
Financial Accounting Standards Board, or FASB, Statement No. 114, Accounting by
Creditors for Impairment of a Loan. The general allowance covers non-classified
loans and is based on historical loss experience adjusted for the various
qualitative and quantitative factors listed above, pursuant to FASB Statement
No. 5, or FASB 5, Accounting for Contingencies. Loans graded "Watch List/Special
Mention" and below are individually examined closely to determine the
appropriate loan loss reserve.

The following table summarizes the activity in our allowance for loan losses for
the period indicated.

Allowance for Loan Losses

The table below presents information regarding our provision and allowance for
loan losses for the periods and years indicated.



                                                          YEAR ENDED DECEMBER 31,
                                               ---------------------------------------------
                                                 2005      2004      2003     2002     2001
                                               -------   -------   -------   ------   ------
                                                                (IN THOUSANDS)
                                                                        
Allowance for loan losses:
Balance at beginning of period                 $15,271   $11,378   $ 6,449   $6,563   $4,746
Provisions charged to operating expenses         6,179     3,914     5,145    1,587    2,800
Reclassification (1)                                --        --       737     (850)      --
Recoveries of loans previously charged-off:
   Construction and land development                --        --        --       --       --
   Commercial real estate                           --        --       140       --       --
   Residential real estate                           3        15         1       --       --
   Commercial and industrial                       164       132       272      464      921
   Consumer                                         29        10         7        7       32
                                               -------   -------   -------   ------   ------
Total recoveries                                   196       157       420      471      953
Loans charged-off:
   Construction and land development                --        --        --       --       --
   Commercial real estate                           --        --       140       --      132
   Residential real estate                          --         9        20       60       --
   Commercial and industrial                       194       115     1,090    1,201    1,601
   Consumer                                        260        54       123       61      203
                                               -------   -------   -------   ------   ------
Total charged-off                                  454       178     1,373    1,322    1,936
Net charge-offs                                    258        21       953      851      983
                                               -------   -------   -------   ------   ------
Balance at end of period                       $21,192   $15,271   $11,378   $6,449   $6,563
                                               =======   =======   =======   ======   ======
Net charge-offs to average loans outstanding      0.02%     0.00%     0.17%    0.19%    0.27%
Allowance for loan losses to gross loans          1.18      1.28      1.55     1.39     1.61


(1)  In accordance with regulatory reporting requirements and American Institute
     of Certified Public Accountants' Statement of Position 01-06, Accounting by
     Certain Entities that Lend to or Finance the Activities of Others, the
     Company has reclassified the portion of its allowance for loan losses that
     relates to undisbursed commitments during the year ended December 31, 2002.
     During the year ended December 31, 2003, management reevaluated its
     methodology for calculating this amount and reclassified an amount from
     other liabilities to the allowance for loan losses.

The following table details the allocation of the allowance for loan losses to
the various categories. The allocation is made for analytical purposes and it is
not necessarily indicative of the categories in which future credit losses may
occur. The total allowance is available to absorb losses from any segment of
loans. The allocations in the table below were determined by a combination of
the following factors: specific allocations made on loans considered impaired as
determined by management and the loan review committee, a general allocation on
certain other impaired loans, and historical losses in each loan type category
combined with a weighting of the current loan composition.


                                       50



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

ALLOWANCE FOR LOAN LOSSES (continued)



                                                          Allowance for Loan Losses at December 31,
                         ----------------------------------------------------------------------------------------------------------
                                 2005                  2004                  2003                  2002                 2001
                         --------------------  --------------------  --------------------  -------------------  -------------------
                                                                      ($ IN THOUSANDS)
                                  % OF LOANS            % OF LOANS            % OF LOANS           % OF LOANS           % OF LOANS
                                  IN IN EACH            IN IN EACH            IN IN EACH           IN IN EACH           IN IN EACH
                                  CATEGORY TO           CATEGORY TO           CATEGORY TO          CATEGORY TO          CATEGORY TO
                          AMOUNT  GROSS LOANS   AMOUNT  GROSS LOANS   AMOUNT  GROSS LOANS  AMOUNT  GROSS LOANS  AMOUNT  GROSS LOANS
                         -------  -----------  -------  -----------  -------  -----------  ------  -----------  ------  -----------
                                                                                          
Construction and land
   development           $ 6,646     24.1%     $ 4,920     27.1%     $ 3,252     26.6%     $1,050     27.6%     $1,462     20.3%
Commercial real estate     3,050     40.5        2,095     41.3        1,446     44.2       2,531     45.2       1,566     51.2
Residential real estate    1,219     15.2          327      9.8          179      5.8         282      4.7         100      4.4
Commercial and
   industrial              9,842     19.1        7,502     20.3        6,192     21.8       2,340     20.3       3,110     20.9
Consumer                     435      1.1          427      1.5          309      1.6         246      2.2         325      3.2
                         -------     ----      -------     ----      -------     ----      ------     ----      ------     ----
   Total                 $21,192      100%     $15,271      100%     $11,378      100%     $6,449      100%     $6,563      100%
                         =======     ====      =======     ====      =======     ====      ======     ====      ======     ====



In general, the "Commercial and Industrial Loans" category represents the
highest risk category for commercial banks. Historically, our largest source of
losses has been in this category. As a result, we utilize a larger estimated
loss factor for this category than we do for real estate secured loans. Our
commercial loan portfolio as of December 31, 2005 was $342.5 million, or 19.1%
of total loans. Other categories, such as stock and bond secured or assignment
of cash collateral loans are provided a nominal loss factor based upon a history
of comparatively lower losses. While the majority of our historical charge-offs
have occurred in the commercial portfolio, we believe that the allowance
allocation is adequate when considering the current composition of commercial
loans and related loss factors.

Our "Construction and Land Development" category reflects some borrower
concentration risk and carries the enhanced risk encountered with construction
loans in general. Currently, construction activity within our primary markets is
very competitive, presenting challenges in the timely completion of projects. A
construction project can be delayed for an extended period as unanticipated
problems arise. Unscheduled work can be difficult to accomplish due to the high
demand for construction workers and delays associated with permitting issues. As
a result, a higher loan loss allocation is devoted to this loan category than to
other loan categories except commercial and industrial loans as noted earlier,
and consumer loans.

Our "Commercial Real Estate" loan category contains a mixture of new and
seasoned properties, retail, office, warehouse, and some special purpose. Loans
on properties are generally underwritten at a loan to value ratio of less than
80% with a minimum debt coverage ratio of 1.20. Historically, our losses on this
product have been minimal and the portfolio continues to exhibit exceptionally
high credit quality. Moreover, a large percentage of the Commercial Real Estate
loan portfolio is comprised of owner-occupied relationships, which usually
reflect a relatively low risk profile. Consequently, the estimated loan loss
factor applied to this sub-category is comparatively low.

Investments

Securities are identified as either held-to-maturity or available-for-sale based
upon various factors, including asset/liability management strategies, liquidity
and profitability objectives, and regulatory requirements. Held-to-maturity
securities are carried at cost, adjusted for amortization of premiums or
accretion of discounts. Available-for-sale securities are securities that may be
sold prior to maturity based upon asset/liability management decisions.
Securities identified as available-for-sale are carried at fair value.
Unrealized gains or losses on available-for-sale securities are recorded as
accumulated other comprehensive income in stockholders' equity. Amortization of
premiums or accretion of discounts on mortgage-backed securities is periodically
adjusted for estimated prepayments.

We use our investment securities portfolio to ensure liquidity for cash
requirements, manage interest rate risk, provide a source of income and to
manage asset quality. The carrying value of our investment securities as of
December 31, 2005 totaled $748.5 million, compared to $788.6 million at December
31, 2004, and $716.0 million as of December 31, 2003. The decrease experienced
from December 31, 2004 to December 31, 2005 was a result of called U.S.
Government-sponsored agency obligations and principal received from
mortgage-backed obligations. The increase experienced from 2003 to 2004 was a
result of growth in deposits, as well as a strategy whereby we increased
earnings by investing in mortgage-backed securities funded by short-term FHLB
borrowings. This strategy had the effect of leveraging our excess capital to
produce incremental returns without incurring additional credit risk. In light
of the rising interest rate environment, beginning in the third quarter of 2004,
we discontinued this strategy, contributing to the decline in our investment
balances and increase in our federal funds sold from December 31, 2004 to
December 31, 2005.


                                       51



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

INVESTMENTS (continued)

Our portfolio of investment securities during 2005, 2004, and 2003 consisted
primarily of mortgage-backed obligations and U.S. Government agency obligations.

The carrying value of our portfolio of investment securities at December 31,
2005, 2004 and 2003 was as follows:



                                       2005       2004       2003
                                     --------   --------   --------
                                                  
U.S. Treasury securities             $  3,498   $  3,501   $  3,014
U.S. Government-sponsored agencies    137,578    118,348    112,537
Mortgage-backed obligations           519,858    648,100    581,446
SBA Loan Pools                            426        625      1,142
State and Municipal obligations         7,128      7,290      7,563
Auction rate securities                67,999         --         --
Other                                  12,046     10,758     10,276
                                     --------   --------   --------
   Total investment securities       $748,533   $788,622   $715,978
                                     ========   ========   ========


The maturity distribution and weighted average yield of our available for sale
and held to maturity portfolios at December 31, 2005 are summarized in the table
below. Weighted average yield is calculated by dividing income within each
maturity range by the outstanding amount of the related investment and has not
been tax affected on tax-exempt obligations. Securities available for sale are
carried at amortized cost in the table below for purposes of calculating the
weighted average yield received on such securities.



                                    DUE UNDER 1                                         DUE UNDER 1
DECEMBER 31, 2005                       YEAR         DUE 1-5 YEARS   DUE 5-10 YEARS         YEAR             TOTAL
($ IN THOUSANDS)                    AMOUNT/YIELD     AMOUNT/YIELD     AMOUNT/YIELD      AMOUNT/YIELD      AMOUNT/YIELD
- -----------------                 ---------------   --------------   --------------   ---------------   ---------------
                                                                                     
Available for Sale
U.S. Government-sponsored
Agency obligations                $ 69,390   3.42%  $32,400   3.36%  $28,938   4.35%  $  8,059   4.47%  $138,787   3.66%
Mortgage-backed obligations             --     --     6,385   3.47        --     --    423,105   4.16    429,490   4.15
Auction rate securities             67,999   3.56        --               --     --         --     --     67,999   3.56
Other                               12,263   3.91        --     --        --     --         --     --     12,263   3.91
                                  --------          -------          -------          --------          --------
Total available for sale          $149,652   3.52   $38,785   3.38   $28,938   4.35   $431,164   4.16   $648,539   3.98
                                  ========          =======          =======          ========          ========
Held to Maturity
U.S. Treasury securities          $  3,498   2.69   $    --     --   $    --     --   $     --     --   $  3,498   2.69
State and Municipal obligations         --     --        --            1,686   4.67      5,442   4.93      7,128   4.87
Mortgage-backed obligations             --     --        --     --        --     --    104,119   4.44    104,119   4.44
SBA Loan Pools                          --     --        --     --       188   4.21        238   4.32        426   4.27
                                  --------          -------          -------          --------          --------
Total held to maturity            $  3,498   2.69%  $    --          $ 1,874   4.62%  $109,799   4.46%  $115,171   4.41%
                                  ========          =======          =======          ========          ========


We had a concentration of U.S. Government sponsored agencies and mortgage-backed
securities during each of the years ended December 31, 2005, 2004 and 2003. The
aggregate carrying value and aggregate fair value of these securities at
December 31, 2005, 2004 and 2003 are as follows.



                                    DECEMBER 31,
                           ------------------------------
                             2005       2004       2003
                           --------   --------   --------
                                   (IN THOUSANDS)
                                        
Aggregate carrying value   $657,436   $766,448   $693,983
                           ========   ========   ========
Aggregate fair value       $654,636   $765,453   $693,044
                           ========   ========   ========



                                       52



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

PREMISES AND EQUIPMENT

On December 30, 2005, the Company purchased the corporate headquarters of
BankWest of Nevada for a total acquisition price of approximately $16.3 million.
The location was previously leased by the Company. In connection with this
purchase, the Company assumed a note on the building. The note amount at
December 31, 2005 is $9.8 million, has a fixed interest rate of 8.79%, and
matures in 2010. The note is secured by the purchased building.

OTHER ASSETS

During the third quarter of 2005, we purchased $24.0 million of bank owned life
insurance to offset the cost of employee benefits.

DEPOSITS

Deposits historically have been the primary source of funding our asset growth.
As of December 31, 2005, total deposits were $2.4 billion, compared to $1.8
billion as of December 31, 2004 and $1.1 billion as of December 31, 2003. The
increase in total deposits is attributable to our ability to attract a stable
base of low-cost deposits. As of December 31, 2005, non-interest bearing
deposits were $980.0 million, compared to $749.6 million as of December 31, 2004
and $441.2 million as of December 31, 2003. As of December 31, 2005, title
company deposits comprised 31.9% of our total non-interest bearing deposits.
Interest-bearing accounts have also experienced growth. As of December 31, 2005,
interest-bearing deposits were $1.4 billion, compared to $1.0 billion and $653.5
million as of December 31, 2004 and 2003, respectively. Interest-bearing
deposits are comprised of NOW accounts, savings and money market accounts,
certificates of deposit under $100,000, and certificates of deposit over
$100,000.

The average balances and weighted average rates paid on deposits for the years
ended December 31, 2005, 2003 and 2002, are presented below.



                                                           YEAR ENDED DECEMBER 31,
                                       ---------------------------------------------------------------
                                       2005 AVERAGE          2004 AVERAGE          2003 AVERAGE
                                          BALANCE     RATE      BALANCE     RATE      BALANCE     RATE
                                       ------------   ----   ------------   ----   ------------   ----
                                                               ($ IN THOUSANDS)
                                                                                
Interest checking (NOW)                 $  109,415    0.54%   $   73,029    0.19%    $ 51,723     0.18
Savings and money market                   827,886    2.04       561,744    1.35      336,012     1.30
Time                                       287,083    2.80       214,515    2.05      158,418     2.34
                                        ----------            ----------             --------
   Total interest-bearing deposits       1,224,384    2.09       849,288    1.43      546,153     1.49
Non-interest bearing demand deposits       845,581      --       600,790      --      345,274       --
                                        ----------            ----------             --------
   TOTAL DEPOSITS                       $2,069,965    1.23%   $1,450,078    0.84%    $891,427     0.92
                                        ==========            ==========             ========


The remaining maturity for certificates of deposit of $100,000 or more as of
December 31, 2005 is presented in the following table.



                   DECEMBER 31, 2005
                   -----------------
                     (IN THOUSANDS)
                
3 months or less        $171,135
3 to 6 months             76,349
6 to 12 months            60,137
Over 12 months             8,584
                        --------
Total                   $316,205
                        ========


CAPITAL RESOURCES

Current risk-based regulatory capital standards generally require banks and bank
holding companies to maintain three minimum capital ratios. Tier 1 risk-based
capital ratio compares "Tier 1" or "core" capital, which consists principally of
common equity, and risk-weighted assets for a minimum ratio of at least 4%.


                                       53



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

CAPITAL RESOURCES (continued)

Total risk-based capital ratio compares total capital, which consists of Tier 1
capital, certain forms of subordinated debt, a portion of the allowance for loan
losses, and preferred stock, to risk-weighted assets for a minimum ratio of at
least 8%. Risk-weighted assets are calculated by multiplying the balance in each
category of assets and certain off-balance sheet obligations by a risk factor,
which ranges from zero for cash assets and certain government obligations to
100% for some types of loans, and adding the products together.

The following table provides a comparison of our risk-based capital ratios and
leverage ratios to the minimum regulatory requirements for the periods
indicated.



                                                                 ADEQUATELY-        MIMIMUM FOR
                                                                 CAPITALIZED     WELL-CAPITALIZED
                                                ACTUAL        REQUIREMENTS (1)     REQUIREMENTS
                                           ----------------   ----------------   ----------------
AS OF DECEMBER 31, 2005                     AMOUNT    RATIO    AMOUNT    RATIO    AMOUNT    RATIO
- -----------------------                    --------   -----   --------   -----   --------   -----
                                                              ($ IN THOUSANDS)
                                                                          
Total Capital (to Risk Weighted Assets)
   BankWest of Nevada                      $148,180   11.1%   $106,877    8.0%   $133,597   10.0%
   Alliance Bank of Arizona                  50,374   10.5      38,371    8.0      47,963   10.0
   Torrey Pines Bank                         37,498   10.8      27,673    8.0      34,591   10.0
   Company                                  300,198   13.8     173,759    8.0     217,198   10.0
Tier I Capital (to Risk Weighted Assets)
   BankWest of Nevada                       135,607   10.2      53,439    4.0      80,158    6.0
   Alliance Bank of Arizona                  44,817    9.3      19,185    4.0      28,778    6.0
   Torrey Pines Bank                         33,981    9.8      13,836    4.0      20,755    6.0
   Company                                  278,550   12.8      86,879    4.0     130,319    6.0
Leverage ratio (to Average Assets)
   BankWest of Nevada                       135,607    7.4      73,422    4.0      91,777    5.0
   Alliance Bank of Arizona                  44,817    8.8      20,368    4.0      25,460    5.0
   Torrey Pines Bank                         33,981    8.7      15,608    4.0      19,510    5.0
   Company                                  278,550   10.2     109,727    4.0     137,159    5.0


(1)  Alliance Bank of Arizona and Torrey Pines Bank have agreed to maintain a
     Tier 1 capital ratio of at least 8% for the first three years of their
     existence.

We were well capitalized at all the banks and the holding company as of December
31, 2005.

SUBORDINATED DEBT

In order to manage our capital position more efficiently, we formed BankWest
Nevada Capital Trust I and BankWest Nevada Capital Trust II, both Delaware
statutory trusts, for the sole purpose of issuing trust preferred securities.

BankWest Nevada Capital Trust I. During the third quarter of 2001, BankWest
Nevada Capital Trust I was formed with $464,000 in capital and issued 15,000
Floating Rate Cumulative Trust Preferred Securities, or trust preferred
securities, with a liquidation value of $1,000 per security, for gross proceeds
of $15.0 million. The entire proceeds of the issuance were invested by BankWest
Nevada Capital Trust I in $15.5 million of Floating Rate Junior Subordinated
Debentures issued by us, with identical maturity, repricing, and payment terms
as the trust preferred securities. The subordinated debentures represent the
sole assets of BankWest Nevada Capital Trust I and mature on July 25, 2031. The
interest rate as of December 31, 2005 was 8.45% based on 6-month LIBOR plus
3.75% with repricing occurring and interest payments due semiannually. Proceeds
of $10 million was invested in BankWest of Nevada. The remaining proceeds were
retained by Western Alliance for general corporate purposes.

The subordinated debentures are redeemable by us, subject to our receipt of
prior approval from the Federal Reserve of San Francisco, on any January 25th or
July 25th on or after July 25, 2006, at the redemption price. The redemption
price is at a premium for a redemption occurring prior to July 25, 2011 as set
forth in the following table plus accrued and unpaid interest.


                                       54



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

SUBORDINATED DEBT (continued)



YEAR BEGINNING            PERCENTAGE
- --------------            ----------
                       
July 25, 2006             107.6875%
July 25, 2007             106.1500%
July 25, 2008             104.6125%
July 25, 2009             103.0750%
July 25, 2010             101.5375%
July 25, 2011 and after   100.0000%


In the event of redemption under a special event occurring prior to July 25,
2006, the price of redemption is the greater of 100% of the principal amount and
the sum of the present values of the principal amount and the premium payable as
part of the redemption price together with the present value of interest
payments calculated at a fixed per annum rate of interest equal to 10.25% over
the remaining life of the security discounted to the special redemption date on
a semi-annual basis at the Treasury rate plus 0.50% plus accrued and unpaid
interest. Holders of the trust preferred securities are entitled to a cumulative
cash distribution on the liquidation amount of $1,000 per security at an
interest rate of 8.45% as of December 31, 2005. The rate will be adjusted to
equal the 6-month LIBOR plus 3.75% for each successive period beginning January
25 of each year provided, however, that prior to July 25, 2011, such annual rate
shall not exceed 12.5%. BankWest Nevada Capital Trust I has the option to defer
payment of the distributions for a period of up to five years, but during any
such deferral, we would be restricted from paying dividends on our common stock.

BankWest Nevada Capital Trust II. During the fourth quarter of 2002, BankWest
Nevada Capital Trust II was formed with $464,000 in capital and issued 15,000
Floating Rate Cumulative Trust Preferred Securities, or trust preferred
securities, with a liquidation value of $1,000 per security, for gross proceeds
of $15.0 million. The entire proceeds of the issuance were invested by BankWest
Nevada Capital Trust II in $15.5 million of Floating Rate Junior Subordinated
Debentures issued by us, with identical maturity, repricing, and payment terms
as the trust preferred securities. The subordinated debentures represent the
sole assets of BankWest Nevada Capital Trust II and mature January 7, 2033. The
interest rate as of December 31, 2005 was 7.89% based on 3-month LIBOR plus
3.35% with repricing occurring and interest payments due quarterly. All of the
net proceeds were retained by Western Alliance.

The subordinated debentures are redeemable by us, subject to our receipt of
prior approval from the Federal Reserve of San Francisco, on any January 7th,
April 7th, July 7th, or October 7th on or after January 7, 2008, at the
redemption price. The redemption price is par plus accrued and unpaid interest,
except in the case of redemption under a special event which is defined in the
debenture occurring prior to January 7, 2008 which is the greater of 100% of the
principal amount and the sum of the present values of the principal amount
together with the present value of interest payments calculated at a fixed per
annum rate of interest equal to 7.125% over the remaining life of the security
discounted to the special redemption date on a quarterly basis at the Treasury
rate plus 0.50% plus accrued and unpaid interest. Holders of the trust preferred
securities are entitled to a cumulative cash distribution on the liquidation
amount of $1,000 per security at an interest rate of 7.89% as of December 31,
2005. The rate will be adjusted to equal the 3-month LIBOR plus 3.35% for each
successive period beginning January 7 of each year provided, however, that prior
to January 7, 2008, such annual rate shall not exceed 12.5%. BankWest Nevada
Capital Trust II has the option to defer payment of the distributions for a
period of up to five years, but during any such deferral, we would be restricted
from paying dividends on our common stock.

A special event under which the trust preferred securities could be redeemed
includes a Tax Event, Capital Treatment Event, or an Investment Company Event. A
Tax Event includes any amendment or change in the laws or regulations of a
taxing authority, an official administrative pronouncement, or a judicial
decision interpreting or applying such laws or regulations that would subject
the trust to federal income tax, interest payable would not be deductible in
whole or part for federal income tax purposes, or subject the trust to more than
a de minimis amount of other taxes, duties, assessments or other government
charges. A Capital Treatment Event includes any amendment or change in the laws
or an official administrative pronouncement to treat the amount equal to the
aggregate liquidation amount of the capital securities as Tier 1 Capital for
purposes of the capital adequacy guidelines of the Federal Reserve. An
Investment Company Event includes changes, interpretation or application of laws
or regulations that would require the trust to be registered under the
Investment Company Act.

We have guaranteed, on a subordinated basis, distributions and other payments
due on the trust preferred securities. We own 100% of the common securities in
the trusts. For financial reporting purposes, our investment in the trusts is
accounted for under the equity method and is included in other assets on the
accompanying consolidated balance sheet. The subordinated debentures issued and
guaranteed by us and held by the trust are reflected on our consolidated balance
sheet in accordance with provisions


                                       55



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

SUBORDINATED DEBT (continued)

of Interpretation No. 46 issued by the Financial Accounting Standards Board, or
FASB, No. 46, Consolidation of Variable Interest Entities. Under applicable
regulatory guidelines, all of the trust preferred securities currently qualify
as Tier 1 capital, although this classification is subject to future change.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

We routinely enter into contracts for services in the conduct of ordinary
business operations which may require payment for services to be provided in the
future and may contain penalty clauses for early termination of the contracts.
To meet the financing needs of our customers, we are also parties to financial
instruments with off-balance sheet risk including commitments to extend credit
and standby letters of credit. We have also committed to irrevocably and
unconditionally guarantee the following payments or distributions with respect
to the holders of preferred securities to the extent that BankWest Nevada Trust
I and BankWest Nevada Trust II have not made such payments or distributions: (1)
accrued and unpaid distributions, (2) the redemption price, and (3) upon a
dissolution or termination of the trust, the lesser of the liquidation amount
and all accrued and unpaid distributions and the amount of assets of the trust
remaining available for distribution. We do not believe that these off-balance
sheet arrangements have or are reasonably likely to have a material effect on
our financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures, or capital resources.
However, there can be no assurance that such arrangements will not have a future
effect.

Long-Term Borrowed Funds.We also have entered into long-term contractual
obligations consisting of advances from Federal Home Loan Bank (FHLB). These
advances are secured with collateral generally consisting of securities. As of
December 31, 2005, these long-term FHLB advances totaled $63.7 million and will
mature by December 31, 2007. Interest payments are due semi-annually. The
weighted average rate of the long-term FHLB advances as of December 31, 2005 was
2.63%.

The following table sets forth our significant contractual obligations as of
December 31, 2005.



                                                                LESS THAN     1-3       3-5      AFTER
CONTRACTUAL OBLIGATIONS                                TOTAL      1 YEAR     YEARS     YEARS    5 YEARS
- -----------------------                              --------   ---------   -------   -------   -------
                                                                       (IN THOUSANDS)
                                                                                 
Long term borrowed funds                             $ 73,512    $34,501    $29,528   $ 9,483   $    --
Junior subordinated deferrable interest debentures     30,928         --         --        --    30,928
Operating lease obligations                            16,407      2,053      4,278     4,042     6,034
                                                     --------    -------    -------   -------   -------
Total                                                $120,847    $36,554    $33,806   $13,525   $36,962
                                                     ========    =======    =======   =======   =======


Our commitments associated with outstanding letters of credit, commitments to
extend credit, and credit card guarantees as of December 31, 2005 are summarized
below. Since commitments associated with letters of credit and commitments to
extend credit may expire unused, the amounts shown do not necessarily reflect
the actual future cash funding requirements.



                                          AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                          ------------------------------------------
                                 TOTAL     LESS THAN     1-3       3-5       AFTER
OTHER COMMITMENTS               AMOUNTS      1 YEAR     YEARS     YEARS     5 YEARS
- -----------------              --------    ---------   -------   -------   --------
                                                  (IN THOUSANDS)
                                                            
Commitments to extend credit   $750,349     $543,529   $77,566   $10,051   $119,203
Credit card guarantees            7,616        7,616        --        --         --
Standby letters of credit        28,720       12,400    15,022     1,298         --
                               --------     --------   -------   -------   --------
Total                          $786,685     $563,545   $92,588   $11,349   $119,203
                               ========     ========   =======   =======   ========


Short-Term Borrowed Funds. Short-term borrowed funds are used to support
liquidity needs created by seasonal deposit flows, to temporarily satisfy
funding needs from increased loan demand, and for other short-term purposes. The
majority of these short-term borrowed funds consist of advances from FHLB. The
borrowing capacity at FHLB is determined based on collateral pledged, generally
consisting of securities, at the time of borrowing. We also have borrowings from
other sources pledged by securities including securities sold under agreements
to repurchase, which are reflected at the amount of cash received in connection
with the transaction, and may require additional collateral based on the fair
value of the underlying securities. As of December 31, 2005, total short-term
borrowed funds were $85.2 million with a weighted average interest rate at
period end of 2.85%, compared to total short-term borrowed funds of $185.5
million as of December 31, 2004 with a weighted average interest rate at year
end of 2.23%. The decrease of $100.3 million was, in general, a result of
short-term advances that had matured and were replaced by other sources of
funding.


                                       56



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS (continued)

The following table sets forth certain information regarding FHLB advances and
repurchase agreements at the dates or for the periods indicated.



                                                         DECEMBER 31,
                                                ------------------------------
                                                  2005       2004       2003
                                                --------   --------   --------
                                                       ($ IN THOUSANDS)
                                                             
FHLB Advances and other:
   Maximum month-end balance                    $155,400   $174,200   $163,211
   Balance at end of year                          7,000    159,900    163,211
   Average balance                                71,075    186,662     69,319
Customer Repurchase Accounts:
   Maximum month-end balance                    $ 78,170   $ 78,050   $ 78,050
   Balance at end of year                         78,170     25,594     78,050
   Average balance                                46,628     52,513     41,939
Total Short-Term Borrowed Funds                 $ 85,170   $185,494   $241,261
Weighted average interest rate at end of year       2.85%      2.23%      1.31%
Weighted average interest rate during year          2.75%      1.87%      1.50%


Since growth in core deposits may be at intervals different from loan demand, we
may follow a pattern of funding irregular growth in assets with short-term
borrowings, which are then replaced with core deposits. This temporary funding
source is likely to be utilized for generally short-term periods, although no
assurance can be given that this will, in fact, occur.

LIQUIDITY

The ability to have readily available funds sufficient to repay fully maturing
liabilities is of primary importance to depositors, creditors and regulators.
Our liquidity, represented by cash and due from banks, federal funds sold and
available-for-sale securities, is a result of our operating, investing and
financing activities and related cash flows. In order to ensure funds are
available at all times, on at least a quarterly basis, we project the amount of
funds that will be required and maintain relationships with a diversified
customer base so funds are accessible. Liquidity requirements can also be met
through short-term borrowings or the disposition of short-term assets. We have
borrowing lines at correspondent banks totaling $84.0 million. In addition,
securities are pledged to the FHLB totaling $472.0 million on total borrowings
from the FHLB of $70.7 million as of December 31, 2005. As of December 31, 2005,
we had $82.9 million in securities available to be sold or pledged to the FHLB.

We have a formal liquidity policy, and in the opinion of management, our liquid
assets are considered adequate to meet our cash flow needs for loan funding and
deposit cash withdrawal for the next 60 to 90 days. At December 31, 2005, we had
$807.7 million in liquid assets comprised of $174.3 million in cash and cash
equivalents (including federal funds sold of $63.2 million) and $633.4 million
in available-for-sale securities.

The pending acquisitions discussed in Note 21 to the Consolidated Financial
Statements are expected to result in a total cash outlay of between $80 million
and $125 million. We intend to fund these acquisitions with cash held at the
holding company and through the issuance of trust preferred securities.

On a long-term basis, our liquidity will be met by changing the relative
distribution of our asset portfolios, for example, reducing investment or loan
volumes, or selling or encumbering assets. Further, we will increase liquidity
by soliciting higher levels of deposit accounts through promotional activities
and/or borrowing from our correspondent banks as well as the Federal Home Loan
Bank of San Francisco. At the current time, our long-term liquidity needs
primarily relate to funds required to support loan originations and commitments
and deposit withdrawals. All of these needs can currently be met by cash flows
from investment payments and maturities, and investment sales if the need
arises.

Our liquidity is comprised of three primary classifications: (i) cash flows from
operating activities; (ii) cash flows used in investing activities; and (iii)
cash flows provided by or used in financing activities. Net cash provided by
operating activities consists primarily of net income adjusted for changes in
certain other asset and liability accounts and certain non-cash income and
expense items such as the loan loss provision, investment and other
amortizations and depreciation. For the years ended December 31, 2005, 2004 and
2003 net cash provided by operating activities was $34.4, $27.3 million and
$12.7 million, respectively.

Our primary investing activities are the origination of real estate, commercial
and consumer loans and purchase and sale of securities. Our net cash provided by
and used in investing activities has been primarily influenced by our loan and
securities activities.


                                       57



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

LIQUIDITY (continued)

The net increase in loans for the years ended December 31, 2005, 2004 and 2003
was $604.8 million, $455.5 million and $268.8 million, respectively. Proceeds
from maturities and sales of securities, net of purchases of securities
available-for-sale and held-to-maturity for the year ended December 31, 2005
were $50.3 million. Net purchases of securities for the years ended December 31,
2004 and 2003 were $133.5 million and $514.0 million, respectively.

Net cash provided by financing activities has been impacted significantly by
increases in deposit levels. During the years ended December 31, 2005, 2004 and
2003, deposits increased by $637.8 million, $661.4 million and $374.3 million,
respectively. In the year ended December 31, 2005, we completed our initial
public offering, resulting in net proceeds of $85.1 million.

Our federal funds sold increased $40.1 million from December 31, 2004 to
December 31, 2005. This is due to the growth in our deposits combined with the
decrease of our investment portfolio over the same period.

Federal and state banking regulations place certain restrictions on dividends
paid by the Banks to Western Alliance. The total amount of dividends which may
be paid at any date is generally limited to the retained earnings of each Bank.
Dividends paid by the Banks to the Company would be prohibited if the effect
thereof would cause the respective Bank's capital to be reduced below applicable
minimum capital requirements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss in a financial instrument arising from adverse
changes in market prices and rates, foreign currency exchange rates, commodity
prices and equity prices. Our market risk arises primarily from interest rate
risk inherent in our lending, investing and deposit taking activities. To that
end, management actively monitors and manages our interest rate risk exposure.
We do not have any market risk sensitive instruments entered into for trading
purposes. We manage our interest rate sensitivity by matching the re-pricing
opportunities on our earning assets to those on our funding liabilities.

Management uses various asset/liability strategies to manage the re-pricing
characteristics of our assets and liabilities designed to ensure that exposure
to interest rate fluctuations is limited within our guidelines of acceptable
levels of risk-taking. Hedging strategies, including the terms and pricing of
loans and deposits, and management of the deployment of our securities are used
to reduce mismatches in interest rate re-pricing opportunities of portfolio
assets and their funding sources.

Interest rate risk is addressed by our each bank's respective Asset Liability
Management Committee, or ALCO, which is comprised of senior finance, operations,
human resources and lending officers. ALCO monitors interest rate risk by
analyzing the potential impact on the net economic value of equity and net
interest income from potential changes in interest rates, and consider the
impact of alternative strategies or changes in balance sheet structure. We
manage our balance sheet in part to maintain the potential impact on economic
value of equity and net interest income within acceptable ranges despite changes
in interest rates.

Our exposure to interest rate risk is reviewed on at least a quarterly basis by
the ALCO. Interest rate risk exposure is measured using interest rate
sensitivity analysis to determine our change in economic value of equity in the
event of hypothetical changes in interest rates. If potential changes to net
economic value of equity and net interest income resulting from hypothetical
interest rate changes are not within the limits established by each bank's Board
of Directors, the respective Board of Directors may direct management to adjust
the asset and liability mix to bring interest rate risk within board-approved
limits.

Economic Value of Equity. We measure the impact of market interest rate changes
on the net present value of estimated cash flows from our assets, liabilities
and off-balance sheet items, defined as economic value of equity, using a
simulation model. This simulation model assesses the changes in the market value
of interest rate sensitive financial instruments that would occur in response to
an instantaneous and sustained increase or decrease (shock) in market interest
rates.

At December 31, 2005, our economic value of equity exposure related to these
hypothetical changes in market interest rates was within the current guidelines
established by us. The following table shows our projected change in economic
value of equity for this set of rate shocks at December 31, 2005.



                              ECONOMIC VALUE OF EQUITY
                         ----------------------------------
                                    PERCENTAGE   PERCENTAGE   PERCENTAGE OF
                         ECONOMIC     CHANGE      OF TOTAL        EQUITY
INTEREST RATE SCENARIO     VALUE     FROM BASE     ASSETS       BOOK VALUE
- ----------------------   --------   ----------   ----------   -------------
                                           ($ IN MILLIONS)
                                                  
Up 300 basis points       $465.7        2.4%        16.3%         190.7%
Up 200 basis points        463.6        1.9         16.2          189.8
Up 100 basis points        459.5        1.0         16.1          188.2
BASE                       455.0         --         15.9          186.3
Down 100 basis points      445.4       (2.1)        15.6          182.4
Down 200 basis points      429.2       (5.7)        15.0          175.8
Down 300 basis points      403.9      (11.2)        14.1          165.4



                                       58



WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Quantitative and Qualitative Disclosures About Market Risk (continued) The
computation of prospective effects of hypothetical interest rate changes are
based on numerous assumptions, including relative levels of market interest
rates, asset prepayments and deposit decay, and should not be relied upon as
indicative of actual results. Further, the computations do not contemplate any
actions we may undertake in response to changes in interest rates. Actual
amounts may differ from the projections set forth above should market conditions
vary from the underlying assumptions.

Net Interest Income Simulation. In order to measure interest rate risk at
December 31, 2005, we used a simulation model to project changes in net interest
income that result from forecasted changes in interest rates. This analysis
calculates the difference between net interest income forecasted using a rising
and a falling interest rate scenario and a net interest income using a base
market interest rate derived from the current treasury yield curve. The income
simulation model includes various assumptions regarding the re-pricing
relationships for each of our products. Many of our assets are floating rate
loans, which are assumed to re-price immediately, and proportional to the change
in market rates, depending on their contracted index. Some loans and investments
include the opportunity of prepayment (embedded options), and accordingly the
simulation model uses indexes to estimate these prepayments and reinvest their
proceeds at current yields. Our non-term deposit products re-price more slowly,
usually changing less than the change in market rates and at our discretion.

This analysis indicates the impact of changes in net interest income for the
given set of rate changes and assumptions. It assumes the balance sheet remains
static and that its structure does not change over the course of the year. It
does not account for all factors that impact this analysis, including changes by
management to mitigate the impact of interest rate changes or secondary impacts
such as changes to our credit risk profile as interest rates change.

Furthermore, loan prepayment rate estimates and spread relationships change
regularly. Interest rate changes create changes in actual loan prepayment rates
that will differ from the market estimates incorporated in this analysis.
Changes that vary significantly from the assumptions may have significant
effects on our net interest income.

For the rising and falling interest rate scenarios, the base market interest
rate forecast was increased and decreased over twelve months by 300 basis
points. At December 31, 2005, our net interest margin exposure related to these
hypothetical changes in market interest rates was within the current guidelines
established by us.



                              SENSITIVITY OF NET
                                INTEREST INCOME
                         ----------------------------
                                           PERCENTAGE
                           ADJUSTED NET      CHANGE
Interest Rate Scenario   INTEREST INCOME    FROM BASE
- ----------------------   ---------------   ----------
                                (IN MILLIONS)
                                     
Up 300 basis points           $118.7           4.7%
Up 200 basis points            118.1           4.1
Up 100 basis points            116.5           2.7
BASE                           113.4            --
Down 100 basis points          110.4          (2.6)
Down 200 basis points          108.5          (4.3)
Down 300 basis points          107.9          (4.9)



                                       59



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RECENT ACCOUNTING PRONOUNCEMENTS

FAS NO. 123(R), SHARED-BASED PAYMENT, REVISED DECEMBER 2004

In December 2004, the Financial Accounting Standards Board published FASB
Statement No. 123 (revised 2004), Share-Based Payment, or FAS 123(R). FAS
123(R) requires that the compensation cost relating to share-based payment
transactions, including grants of employee stock options, be recognized in
financial statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. FAS 123(R) permits entities to use any
option-pricing model that meets the fair value objective in the Statement.
Modifications of share-based payments will be treated as replacement awards with
the cost of the incremental value recorded in the financial statements.

The Statement will be effective at the beginning of the first quarter of 2006.
As of the effective date, we will apply the Statement using a modified version
of prospective application. Under that transition method, compensation cost will
be recognized for (1) all awards granted after the required effective date and
to awards modified, cancelled, or repurchased after that date and (2) the
portion of awards granted subsequent to completion of an IPO and prior to the
effective date for which the requisite service has not yet been rendered, based
on the grant-date fair value of those awards calculated for pro forma
disclosures under SFAS 123.

The impact of this Statement on the Company in 2006 and beyond will depend on
various factors; among them being our future compensation strategy. We estimate
that the Company will incur stock option compensation expense of approximately
$435,000 for the year ended December 31, 2006 related to the adoption of
FAS123(R), $307,000 of which is expected to be tax-effected. A significant
amount of the pro forma compensation costs have been calculated using a minimum
value method and may not be indicative of amounts which shall be expensed in
future periods.

SOP 03-3, ACCOUNTING FOR CERTAIN LOANS AND DEBT SECURITIES ACQUIRED IN A
TRANSFER

In December 2003, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 03-3, Accounting for Certain Loans and Debt
Securities Acquired in a Transfer. SOP 03-3 addresses the accounting for
acquired loans that show evidence of having deteriorated in terms of credit
quality since their origination and for which a loss is deemed probable of
occurring. SOP 03-3 requires acquired loans to be recorded at their fair value,
defined as the present value of future cash flows including interest income, to
be recognized over the life of the loan. SOP 03-3 prohibits the carryover of an
allowance for loan loss on certain acquired loans within its scope considered in
the future cash flows assessment. In relation to the pending acquisitions
discussed in Note 21 to our Consolidated Financial Statements, we do not expect
SOP 03-3 will have a material effect on the Company's consolidated financial
statements.


                                       60



WESTERN ALLIANCE BANCORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS
WESTERN ALLIANCE BANCORPORATION
LAS VEGAS, NEVADA

                                                    MCGLADREY & PULLEN
                                                    Certified Public Accountants

     We have audited the accompanying consolidated balance sheets of Western
Alliance Bancorporation and subsidiaries as of December 31, 2005 and 2004 and
the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mistatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Western
Alliance Bancorporation and subsidiaries as of December 31, 2005 and 2004 and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2005, in conformity with U.S. generally
accepted accounting principles.

MCGLADREY & PULLEN, LLP

Las Vegas, Nevada
February 10, 2006

McGladrey & Pullen, LLP is an independent member firm of RSM International, an
affiliation of independent accounting and consulting firms.


                                       61



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2005 AND 2004



($ in thousands, except per share amounts)                        2005         2004
                                                               ----------   ----------
                                                                      
ASSETS
Cash and due from banks                                        $  111,150   $   92,282
Federal funds sold and other                                       63,186       23,115
                                                               ----------   ----------
         CASH AND CASH EQUIVALENTS                                174,336      115,397
                                                               ----------   ----------
Securities held to maturity (approximate fair value $112,601
   and $128,984, respectively)                                    115,171      129,549
Securities available for sale                                     633,362      659,073
Gross loans, including net deferred loan fees                   1,793,337    1,188,535
Less: Allowance for loan losses                                   (21,192)     (15,271)
                                                               ----------   ----------
         LOANS, NET                                             1,772,145    1,173,264
                                                               ----------   ----------
Premises and equipment, net                                        58,430       29,364
Bank owned life insurance                                          51,834       26,170
Investment in Federal Home Loan Bank stock                         14,456       15,097
Accrued interest receivable                                        10,545        8,359
Deferred tax assets, net                                           10,807        5,949
Goodwill                                                            3,946        3,946
Other intangible assets, net of accumulated amortization of
   $405 and $183, respectively                                      1,218        1,440
Other assets                                                       11,021        9,241
                                                               ----------   ----------
         TOTAL ASSETS                                          $2,857,271   $2,176,849
                                                               ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
   Non-interest bearing demand deposits                        $  980,009   $  749,550
   Interest bearing deposits:
      Demand                                                      122,262      103,723
      Savings and money market                                    949,582      665,425
      Time, $100 and over                                         316,205      219,451
      Other time                                                   25,754       17,887
                                                               ----------   ----------
                                                                2,393,812    1,756,036
   Customer repurchase agreements                                  78,170       25,594
   Federal Home Loan Bank advances and other borrowings
      One year or less                                              7,000      159,900
      Over one year                                                73,512       63,700
   Junior subordinated debt                                        30,928       30,928
   Accrued interest payable and other liabilities                  29,626        7,120
                                                               ----------   ----------
         TOTAL LIABILITIES                                      2,613,048    2,043,278
                                                               ----------   ----------
Commitments and Contingencies (Notes 6, 9, 10 and 11)

Stockholders' Equity
Preferred stock, par value $.0001; shares authorized
   20,000,000; no shares issued and outstanding 2005 and
   2004                                                               --            --
Common stock, par value $.0001; shares authorized
   100,000,000; shares issued and outstanding 2005: 22,810,
   491; 2004: 18,249,554                                                2            2
Additional paid-in capital                                        167,996       80,459
Retained earnings                                                  86,281       58,216
Deferred compensation - restricted stock                             (364)          --
Accumulated other comprehensive loss - net unrealized on
   available for sale loss securities                              (9,692)      (5,106)
                                                               ----------   ----------
         TOTAL STOCKHOLDERS' EQUITY                               244,223      133,571
                                                               ----------   ----------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $2,857,271   $2,176,849
                                                               ==========   ==========


See Notes to Consolidated Financial Statements.


                                       62



WESTERN ALLIANCE BANCORPORATION

CONSOLIDATED STATEMENTS OF INCOME

                                                        YEARS ENDED DECEMBER 31,
                                                        2005, 2004 AND 2003



($ in thousands, except per share amounts)                           2005       2004      2003
                                                                   --------   -------   -------
                                                                               
Interest income on:
   Loans, including fees                                           $102,481   $59,311   $36,792
   Securities - taxable                                              29,099    30,373    15,938
   Securities - nontaxable                                              394       341       346
   Dividends - taxable                                                  595       537       169
   Federal funds sold and other                                       2,341       293       578
                                                                   --------   -------   -------
      TOTAL INTEREST INCOME                                         134,910    90,855    53,823
                                                                   --------   -------   -------
Interest expense on:
   Deposits                                                          25,546    12,123     8,158
   FHLB advances and other borrowings, short-term                     3,234     4,472     1,671
   FHLB advances and other borrowings, long-term                      1,675     1,586     1,475
   Junior subordinated debt                                           2,113     1,539     1,494
                                                                   --------   -------   -------
      TOTAL INTEREST EXPENSE                                         32,568    19,720    12,798
                                                                   --------   -------   -------
      NET INTEREST INCOME                                           102,342    71,135    41,025
Provision for loan losses                                             6,179     3,914     5,145
                                                                   --------   -------   -------
      NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES            96,163    67,221    35,880
                                                                   --------   -------   -------
Other income:
   Trust and investment advisory services                             5,699     2,896        --
   Service charges                                                    2,495     2,333     1,998
   Income from bank owned life insurance                              1,664     1,203       967
   Investment securities gains (losses), net                             69        19      (265)
   Other                                                              2,211     2,275     1,570
                                                                   --------   -------   -------
                                                                     12,138     8,726     4,270
                                                                   --------   -------   -------
Other expense:
   Salaries and employee benefits                                    36,816    25,590    15,615
   Occupancy                                                          9,819     7,309     4,820
   Customer service                                                   3,720     1,998       752
   Advertising, public relations and business development             2,806     1,672       989
   Legal, professional and director fees                              2,051     1,405     1,111
   Correspondent banking service charges and wire transfer costs      1,651     1,260       512
   Audits and exams                                                   1,538       935       435
   Supplies                                                           1,083       838       619
   Data processing                                                    1,053       641       466
   Telephone                                                            759       578       424
   Insurance                                                            752       540       305
   Travel and automobile                                                684       467       261
   Organizational costs                                                  --        --       604
   Other                                                              2,132     1,696       377
                                                                   --------   -------   -------
                                                                     64,864    44,929    27,290
                                                                   --------   -------   -------
      INCOME BEFORE INCOME TAXES                                     43,437    31,018    12,860
Income tax expense                                                   15,372    10,961     4,171
                                                                   --------   -------   -------
      NET INCOME                                                   $ 28,065   $20,057   $ 8,689
                                                                   ========   =======   =======
Earnings per share:
   Basic                                                           $   1.36   $  1.17   $  0.61
                                                                   ========   =======   =======
   Diluted                                                         $   1.24   $  1.09   $  0.59
                                                                   ========   =======   =======


See Notes to Consolidated Financial Statements.


                                       63



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

                                                        YEARS ENDED DECEMBER 31,
                                                        2005, 2004 AND 2003




                                                                 Common Stock
                                                              ------------------  Additional
                                               Comprehensive    Shares              Paid-in   Treasury
Description                                       Income        Issued    Amount    Capital     Stock
- -----------                                    -------------  ----------  ------  ----------  --------
                                                                   ($ in thousands)
                                                                               
Balance, December 31, 2002                                    13,908,279    $ 1    $ 35,693   $(2,372)
Stock options exercised, including tax
   benefit of $256                                               108,042     --         434        --
Issuance of 711,310 shares of common stock
   $7.03 per share, net of offering cost of
   $116                                                          711,310     --       4,884        --
Issuance of 2,297,560 shares of common stock
   at $9 per share, net of offering costs of
   $55                                                         2,297,560      1      20,622        --
Issuance of 100,000 shares of common stock at
   $9 per share in connection with merger                        100,000     --         900        --
Treasury stock purchased at $9 per share
   (75,338 shares)                                                    --     --          --      (678)
Retirement of treasury stock                                    (443,918)    --          --     3,050
Comprehensive income:
   Net income                                     $ 8,689             --     --          --        --
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $2,602            (5,018)
      Less reclassification adjustment for
         losses included in net income, net
         of taxes of $90                              175
                                                  -------
      Net unrealized holding losses                (4,843)            --     --          --        --
                                                  -------
                                                  $ 3,846
                                                  =======
                                                              ----------    ---    --------   -------
Balance, December 31, 2003                                    16,681,273      2      62,533        --
Stock options exercised                                           97,800     --         415        --
Stock warrants exercised                                          20,481     --         156        --
Issuance of 1,250,000 shares of common stock
   at $12 per share, net of offering costs of
   $45                                                         1,250,000     --      14,955        --
Issuance of 200,000 shares of common stock at
   $12 per share, in connection with merger                      200,000     --       2,400        --
Comprehensive income:
   Net income                                     $20,057             --     --          --        --
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $1,096            (1,850)
      Less reclassification adjustment for
         gains included in net income, net of
         taxes of $6                                 (13)
                                                  -------
      Net unrealized holding losses                (1,863)            --     --          --        --
                                                  -------
                                                  $18,194
                                                  =======
                                                              ----------    ---    --------   -------
Balance, December 31, 2004                                    18,249,554      2      80,459        --
Stock options exercised                                          228,114     --       1,222        --
Stock warrants exercised                                         105,823     --         806        --
Issuance of 4,200,000 shares of common stock,
   net of offering costs of $7,337                             4,200,000     --      85,063        --
Restricted stock granted                                          27,000     --         446        --
Compensation cost on restricted stock                                 --     --          --        --
Comprehensive income:
   Net income                                     $28,065             --     --          --        --
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $2,679            (4,541)
      Less reclassification adjustment for
         gains included in net income, net of
         taxes of $24                                 (45)
                                                  -------
      Net unrealized holding losses                (4,586)            --     --          --        --
                                                  -------
                                                  $23,479
                                                  =======
                                                              ----------    ---    --------   -------
BALANCE, DECEMBER 31, 2005                                    22,810,491    $ 2    $167,996    $   --
                                                              ==========    ===    ========   =======


                                                                        Accumulated
                                                           Deferred        Other
                                                         Compensation  Comprehensive
                                               Retained  - Restricted      Income
Description                                    Earnings      Stock         (Loss)       Total
- -----------                                    --------  ------------  -------------  --------
                                                               ($ in thousands)
                                                                          
Balance, December 31, 2002                     $32,520       $  --        $ 1,600      $67,442
Stock options exercised, including tax
   benefit of $256                                  --          --             --          434
Issuance of 711,310 shares of common stock
   $7.03 per share, net of offering cost of
   $116                                             --          --             --        4,884
Issuance of 2,297,560 shares of common stock
   at $9 per share, net of offering costs of
   $55                                              --          --             --       20,623
Issuance of 100,000 shares of common stock at
   $9 per share in connection with merger           --          --             --          900
Treasury stock purchased at $9 per share
   (75,338 shares)                                                             --         (678)
Retirement of treasury stock                    (3,050)         --             --           --
Comprehensive income:
   Net income                                    8,689          --             --        8,689
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $2,602
      Less reclassification adjustment for
         losses included in net income, net of
         taxes of $90

      Net unrealized holding losses                 --          --         (4,843)      (4,843)



                                               -------       -----        -------     --------
Balance, December 31, 2003                      38,159          --         (3,243)      97,451
Stock options exercised                             --          --             --          415
Stock warrants exercised                            --          --             --          156
Issuance of 1,250,000 shares of common stock
   at $12 per share, net of offering costs of
   $45                                              --          --             --       14,955
Issuance of 200,000 shares of common stock at
   $12 per share, in connection with merger         --          --             --        2,400
Comprehensive income:
   Net income                                   20,057          --             --       20,057
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $1,096
      Less reclassification adjustment for
         gains included in net income, net
         of taxes of $6

      Net unrealized holding losses                 --          --         (1,863)      (1,863)



                                               -------       -----        -------     --------
Balance, December 31, 2004                      58,216          --         (5,106)     133,571
Stock options exercised                             --          --             --        1,222
Stock warrants exercised                            --          --             --          806
Issuance of 4,200,000 shares of common stock,
   net of offering costs of $7,337                  --          --             --       85,063
Restricted stock granted                            --        (446)            --           --
Compensation cost on restricted stock               --          82             --           82
Comprehensive income:
   Net income                                   28,065          --             --       28,065
   Other comprehensive income
      Unrealized holding losses on securities
         available for sale arising during the
         period, net of taxes of $2,679
      Less reclassification adjustment for
         gains included in net income, net of
         taxes of $24

      Net unrealized holding losses                 --          --         (4,586)      (4,586)



                                               -------       -----        -------     --------
BALANCE, DECEMBER 31, 2005                     $86,281       $(364)       $(9,692)    $244,223
                                               =======       =====        =======     ========


See Notes to Consolidated Financial Statements.


                                       64



WESTERN ALLIANCE BANCORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003



($ in thousands)                                                           2005        2004        2003
                                                                        ---------   ---------   ---------
                                                                                       
Cash Flows from Operating Activities:
Net income                                                              $  28,065   $  20,057   $   8,689
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Depreciation and amortization                                         3,783       2,629       1,804
      Net amortization of securities premiums                               1,219       3,698       2,937
      Tax benefit from exercise of stock options                               --          --         256
      Stock dividends received, FHLB stock                                   (890)       (536)       (167)
      Provision for loan losses                                             6,179       3,914       5,145
      Deferred taxes                                                       (2,158)        (69)     (1,470)
      (Increase) in accrued interest receivable                            (2,186)     (1,970)     (2,811)
      (Increase) in bank-owned life insurance                              (1,664)     (1,203)       (967)
      (Increase) in other assets                                             (479)       (844)     (2,732)
      Increase in accrued interest payable and other liabilities            2,530       1,627       1,686
      Other, net                                                              (40)        (29)        326
                                                                        ---------   ---------   ---------
         NET CASH PROVIDED BY OPERATING ACTIVITIES                         34,359      27,274      12,696
                                                                        ---------   ---------   ---------
Cash Flows from Investing Activities:
   Purchases of securities held to maturity                               (13,209)    (32,706)   (121,192)
   Proceeds from maturities of securities held to maturity                 27,373      35,241      11,416
   Purchases of securities available for sale                            (135,271)   (441,986)   (506,246)
   Proceeds from maturities of securities available for sale              152,707     305,908     102,051
   Proceeds from the sale of securities available for sale                 18,728      41,775      30,051
   Net cash (paid) received in settlement of acquisition                       --      (2,177)        246
   Liquidation (purchase) of Federal Home Loan Bank stock                   1,531      (1,933)    (10,908)
   Net increase in loans made to customers                               (574,456)   (434,531)   (268,828)
   Purchased mortgages                                                    (30,346)    (20,926)         --
   Purchase of premises and equipment                                     (22,756)    (13,899)     (7,071)
   Purchase of bank-owned life insurance                                  (24,000)         --     (24,000)
   Other, net                                                                (264)         --          --
                                                                        ---------   ---------   ---------
         NET CASH USED IN INVESTING ACTIVITIES                           (599,963)   (565,234)   (794,481)
                                                                        ---------   ---------   ---------
   Cash Flows from Financing Activities:
   Net increase in deposits                                               637,776     661,390     374,342
   Net (repayments) proceeds from borrowings                             (100,324)    (89,467)    288,661
   Proceeds from exercise of stock options and stock warrants               2,028         571         178
   Proceeds from stock issuance, net                                       85,063      14,955      25,507
   Repurchase of treasury stock                                                --          --        (678)
                                                                        ---------   ---------   ---------
         NET CASH PROVIDED BY FINANCING ACTIVITIES                        624,543     587,449     688,010
                                                                        ---------   ---------   ---------
         INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  58,939      49,489     (93,775)
Cash and Cash Equivalents, beginning of year                              115,397      65,908     159,683
                                                                        ---------   ---------   ---------
Cash and Cash Equivalents, end of year                                  $ 174,336   $ 115,397   $  65,908
                                                                        =========   =========   =========
Supplemental Disclosure of Cash Flow Information
   Cash payments for interest                                           $  32,373   $  19,601   $  11,675
   Cash payments for income taxes                                       $  17,481   $  10,129   $   4,855
Supplemental Disclosure of Noncash Investing and Financing
   Activities
   Acquisition of premises and equipment funded with borrowings         $   9,812   $      --   $      --
   Stock issued in connection with acquisitions                         $      --   $   2,400   $    $900
   Securities transferred from available for sale to held to maturity   $      --   $      --   $  16,862
   Purchase of available for sale securities pending settlement         $  20,000   $      --   $   9,750
   Retirement of treasury stock                                         $      --   $      --   $   3,050


See Notes to Consolidated Financial Statements.


                                       65



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Western Alliance Bancorporation is a bank holding company providing a full range
of banking services to commercial and consumer customers through its wholly
owned subsidiaries BankWest of Nevada, operating primarily in Nevada, Alliance
Bank of Arizona, operating primarily in Arizona, Torrey Pines Bank, operating
primarily in Southern California, Miller/Russell & Associates, Inc., operating
in Nevada, Arizona and Southern California, and Premier Trust, Inc., operating
in Nevada and Arizona. These entities are collectively referred to herein as the
Company. Alliance Bank of Arizona and Torrey Pines Bank began operations during
the year ended December 31, 2003. The accounting and reporting policies of the
Company conform to accounting principles generally accepted in the United States
of America and general industry practices.

A summary of the significant accounting policies of the Company follows:

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. A material
estimate that is particularly susceptible to significant change in the near term
relates to the determination of the allowance for loan losses.

PRINCIPLES OF CONSOLIDATION

With the exception of certain trust subsidiaries (Note 10) which do not meet the
criteria for consolidation pursuant to Financial Accounting Standards Board
(FASB) Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities, the consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, BankWest of Nevada, Alliance Bank of
Arizona, Torrey Pines Bank (collectively referred to herein as the Banks),
Miller/Russell & Associates, Inc., and Premier Trust, Inc. All significant
intercompany balances and transactions have been eliminated in consolidation.

In February 2005, BW Real Estate, Inc. (a real estate investment trust) was
formed as a wholly-owned subsidiary of BankWest of Nevada. Substantially all
real estate loans owned by BankWest of Nevada were transferred to the subsidiary
at that date. Substantially all mortgage-backed securities owned by BankWest of
Nevada were transferred to the subsidiary during the second quarter of 2005.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks (including cash items in process of clearing) and
federal funds sold. Cash flows from loans originated by the Company and deposits
are reported net.

The Company maintains amounts due from banks, which at times may exceed
federally insured limits. The Company has not experienced any losses in such
accounts.

SECURITIES

Securities classified as held to maturity are those debt securities the Company
has both the intent and ability to hold to maturity regardless of changes in
market conditions, liquidity needs or general economic conditions. These
securities are carried at amortized cost. The sale of a security within three
months of its maturity date or after at least 85% of the principal outstanding
has been collected is considered a maturity for purposes of classification and
disclosure.

Securities classified as available for sale are equity securities and those debt
securities the Company intends to hold for an indefinite period of time, but not
necessarily to maturity. Any decision to sell a security classified as available
for sale would be based on various factors, including significant movements in
interest rates, changes in the maturity mix of the Company's assets and
liabilities, liquidity needs, regulatory capital considerations and other
similar factors. Securities available for sale are reported at fair value with
unrealized gains or losses reported as other comprehensive income (loss), net of
the related deferred tax effect. Realized gains or losses, determined on the
basis of the cost of specific securities sold, are included in earnings.

Purchase premiums and discounts are generally recognized in interest income
using the interest method over the term of the securities. For mortgage-backed
securities, estimates of prepayments are considered in the constant yield
calculations.

Declines in the fair value of individual securities classified as available for
sale below their amortized cost that are determined to be other than temporary
result in write-downs of the individual securities to their fair value with the
resulting write-downs included in current earnings as realized losses. In
determining other-than-temporary losses, management considers (1) the length of
time and the extent to which the fair value has been less than cost, (2) the
financial condition and near-term prospects of the issuer, and (3) the intent
and ability of the Company to retain its investment in the issuer for a period
of time sufficient to allow for any anticipated recovery in fair value.


                                       66



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

LOANS

Loans are stated at the amount of unpaid principal, reduced by unearned net loan
fees and allowance for loan losses.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management believes that collectibility of the principal is unlikely. Subsequent
recoveries, if any, are credited to the allowance.

The allowance is an amount that management believes will be adequate to absorb
probable losses on existing loans that may become uncollectible, based on
evaluation of the collectibility of loans and prior credit loss experience. This
evaluation also takes into consideration such factors as changes in the nature
and volume of the loan portfolio, overall portfolio quality, review of specific
problem credits, peer bank information, and current economic conditions that may
affect the borrower's ability to pay. Due to the credit concentration of the
Company's loan portfolio in real estate secured loans, the value of collateral
is heavily dependent on real estate values in Southern Nevada, Arizona and
Southern California. While management uses the best information available to
make its evaluation, future adjustments to the allowance may be necessary if
there are significant changes in economic or other conditions. In addition, the
Federal Deposit Insurance Corporation (FDIC) and state banking regulatory
agencies, as an integral part of their examination processes, periodically
review the Banks' allowance for loan losses, and may require the Banks to make
additions to the allowance based on their judgment about information available
to them at the time of their examinations.

The allowance consists of specific and general components. The specific
component relates to loans that are classified as either doubtful, substandard
or special mention. For such loans that are also classified as impaired, an
allowance is established when the discounted cash flows (or collateral value or
observable market price) of the impaired loan is lower than the carrying value
of that loan, pursuant to FASB Statement No. 114, Accounting by Creditors for
Impairment of a Loan. The general component covers non-classified loans and is
based on historical loss experience adjusted for qualitative and environmental
factors, pursuant to FASB Statement No. 5 (FASB 5), Accounting for
Contingencies.

A loan is impaired when it is probable the Company will be unable to collect all
contractual principal and interest payments due in accordance with the terms of
the loan agreement. Impaired loans are measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate or,
as a practical expedient, at the loan's observable market price or the fair
value of the collateral if the loan is collateral dependent. The amount of
impairment, if any, and any subsequent changes are included in the allowance for
loan losses.

INTEREST AND FEES ON LOANS

Interest on loans is recognized over the terms of the loans and is calculated
under the effective interest method. The accrual of interest on impaired loans
is discontinued when, in management's opinion, the borrower may be unable to
make payments as they become due.

The Company determines a loan to be delinquent when payments have not been made
according to contractual terms, typically evidenced by nonpayment of a monthly
installment by the due date. The accrual of interest on loans is discontinued at
the time the loan is 90 days delinquent unless the credit is well secured and in
the process of collection. Credit card loans and other personal loans are
typically charged off no later than 180 days delinquent.

All interest accrued but not collected for loans that are placed on nonaccrual
status or charged off is reversed against interest income. The interest on these
loans is accounted for on the cash-basis or cost-recovery method, until
qualifying for return to accrual. Loans are returned to accrual status when all
the principal and interest amounts contractually due are brought current and
future payments are reasonably assured.

Loan origination and commitment fees and certain direct loan origination costs
are deferred and the net amount amortized as an adjustment to the related loan's
yield. The Company is generally amortizing these amounts over the contractual
life of the loan. Commitment fees, based upon a percentage of a customer's
unused line of credit, and fees related to standby letters of credit are
recognized over the commitment period.

As a service for customers, the Company has entered into agreements with
unaffiliated mortgage companies to complete applications, loan documents and
perform pre-underwriting activities for certain residential mortgages. The
mortgage loan pre-underwriting fees from these agreements are recognized as
income when earned.

TRANSFERS OF FINANCIAL ASSETS

Transfers of financial assets are accounted for as sales, when control over the
assets has been surrendered. Control over transferred assets is deemed to be
surrendered when (1) the assets have been isolated from the Company, (2) the
transferee obtains the right (free of conditions that constrain it from taking
advantage of that right) to pledge or exchange the transferred assets, and


                                       67



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

TRANSFERS OF FINANCIAL ASSETS (continued)

(3) the Company does not maintain effective control over the transferred assets
through an agreement to repurchase them before their maturity.

BANK OWNED LIFE INSURANCE

Bank owned life insurance is stated at its cash surrender value. The face amount
of the underlying policies is $138,771 as of December 31, 2005. There are no
loans offset against cash surrender values, and there are no restrictions as to
the use of proceeds.

FEDERAL HOME LOAN BANK STOCK

The Company's banks, as members of the Federal Home Loan Bank (FHLB) system, are
required to maintain an investment in capital stock of the FHLB in an amount
equal to 5% of its advances from the FHLB. These investments are recorded at
cost since no ready market exists for them, and they have no quoted market
value.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is computed principally by the straight-line method
over the estimated useful lives of the assets. Improvements to leased property
are amortized over the lesser of the term of the lease or life of the
improvements. Depreciation and amortization is computed using the following
estimated lives:



                           Years
                          ------
                       
Bank premises             31
Equipment and furniture   5 - 10
Leasehold improvements    6 - 10


ORGANIZATION AND STAR T-UP COSTS

Organization and start-up costs were charged to operations as they were incurred
pursuant to Statement of Position 98-5, Reporting on the Costs of Start-Up
Activities. Organization and start-up costs charged to operations during the
years ended December 31, 2003 were approximately $604. There were no
organization and start-up costs charged to operations during the years ended
December 31, 2005 and 2004.

OTHER INTANGIBLE ASSETS

Intangible assets consist of investment advisory and trust customer
relationships, respectively, and are amortized over 6 and 10 years,
respectively.

GOODWILL

Goodwill is reviewed periodically by management for impairment. No impairment
charge was deemed necessary based on management's impairment analysis in 2005.

INCOME TAXES

Western Alliance Bancorporation and its subsidiaries, other than BW Real Estate,
Inc., file a consolidated federal tax return. Deferred taxes are provided on an
asset and liability method whereby deferred tax assets are recognized for
deductible temporary differences and tax credit carryfor wards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effect of changes in tax laws
and rates on the date of enactment.

STOCK COMPENSATION PLANS

The Company has the 2005 Stock Incentive Plan (the Plan) which is described more
fully in Note 12. The Company accounts for this plan under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. Accordingly, no stock-based employee
compensation cost has been recognized, as all options granted under those plans
had an exercise price equal to the market value of the underlying common stock
on the date of grant. The following table illustrates the effect on net income
and earnings per share had compensation cost for all of the stock-based
compensation plans been determined based on the grant date fair values of awards
(the method described in FASB Statement No. 123, Accounting for Stock-Based
Compensation):


                                       68



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

STOCK COMPENSATION PLANS (continued)



                                                                  2005      2004     2003
                                                                -------   -------   ------
                                                                           
Net income:
   As reported                                                  $28,065   $20,057   $8,689
   Deduct total stock-based employee compensation expense
      determined under fair value based method for all awards    (1,011)     (696)    (440)
   Related tax benefit for non-qualified stock options               60        33        9
                                                                -------   -------   ------
   Pro forma                                                    $27,114   $19,394   $8,258
                                                                =======   =======   ======
Earnings per share:
   Basic - as reported                                          $  1.36   $  1.17   $ 0.61
   Basic - pro forma                                               1.32      1.13     0.58
   Diluted - as reported                                           1.24      1.09     0.59
   Diluted - pro forma                                             1.20      1.05     0.56


The pro forma compensation cost was recognized for the fair value of the stock
options granted, which was estimated using the Black-Scholes method for options
granted after our June 2005 initial public offering (IPO), and the minimum value
method for stock options granted in 2005 before the IPO, 2004 and 2003 with the
following assumptions:



                                POST-IPO   PRE-IPO
                                  2005       2005     2004    2003
                                --------   -------   -----   ------
                                                 
Expected life in years               6          7        7       7
Risk-free interest rate           4.21%      4.09%    3.93%   3.58%
Dividends rate                    None       None     None    None
Fair value per optional share    $8.91      $4.04    $2.84   $1.96
Volatility                          29%        NA       NA      NA


PREFERRED STOCK

No shares of preferred stock are issued and outstanding, and we have no current
intent to issue preferred stock in the immediate future. The Board of Directors
will have the authority, without further action by the stockholders, to issue
preferred stock in one or more series and to fix the number of shares,
designations, preferences, powers, and relative, participating, optional or
other special rights. The issuance of preferred stock could decrease the amount
of earnings and assets available for distribution to holders of common stock or
adversely affect the rights and powers, including voting rights, of the holders
of common stock, and may have the effect of delaying, deferring or preventing a
change in control of the Company.

OFF-BALANCE SHEET INSTRUMENTS

In the ordinary course of business, the Company has entered into off-balance
sheet financial instruments consisting of commitments to extend credit and
standby letters of credit. Such financial instruments are recorded in the
consolidated financial statements when they are funded.

TRUST ASSETS AND INVESTMENT ADVISORY ASSETS UNDER MANAGEMENT

Customer property, other than funds on deposit, held in a fiduciary or agency
capacity by the Company is not included in the consolidated balance sheet
because they are not assets of the Company. Trust and investment advisory
service income is recorded on an accrual basis. At December 31, 2005 and 2004,
Premier Trust had $132 million and $80 million, respectively, in assets under
management and $296 million and $208 million, respectively, in total trust
assets. At December 31, 2005 and 2004, Miller/ Russell & Associates had $1.11
billion and $791 million, respectively, in assets under management.

FAIR VALUES OF FINANCIAL INSTRUMENTS

FASB Statement No. 107, Disclosures About Fair Value of Financial Instruments,
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate that value.

Management uses its best judgment in estimating the fair value of the Company's
financial instruments; however, there are inherent weaknesses in any estimation
technique. Therefore, for substantially all financial instruments, the fair
value estimates presented herein are not necessarily indicative of the amounts
the Company could have realized in a sales transaction at December 31, 2005 or
2004. The estimated fair value amounts for 2005 and 2004 have been measured as
of their year end, and have not been reevaluated or updated for purposes of
these consolidated financial statements subsequent to those dates. As such, the
estimated fair values of these financial instruments subsequent to the reporting
date may be different than the amounts reported at year end.


                                       69



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The information in Note 16 should not be interpreted as an estimate of the fair
value of the entire Company since a fair value calculation is only required for
a limited portion of the Company's assets.

Due to the wide range of valuation techniques and the degree of subjectivity
used in making the estimate, comparisons between the Company's disclosures and
those of other companies or banks may not be meaningful.

The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments:

     Cash and cash equivalents

     The carrying amounts reported in the consolidated balance sheets for cash
     and due from banks and federal funds sold approximate their fair value.

     Securities

     Fair values for securities are based on quoted market prices where
     available or on quoted markets for similar securities in the absence of
     quoted prices on the specific security.

     Federal Home Loan Bank stock

     The Company's subsidiary banks are members of the Federal Home Loan Bank
     (FHLB) system and maintain an investment in capital stock of the FHLB. No
     ready market exists for the FHLB stock and it has no quoted market value.

     Loans

     For variable rate loans that reprice frequently and that have experienced
     no significant change in credit risk, fair values are based on carrying
     values. Variable rate loans comprised approximately 57% and 58% of the loan
     portfolio at December 31, 2005 and 2004, respectively. Fair value for all
     other loans is estimated based on discounted cash flows using interest
     rates currently being offered for loans with similar terms to borrowers
     with similar credit quality. Prepayments prior to the repricing date are
     not expected to be significant. Loans are expected to be held to maturity
     and any unrealized gains or losses are not expected to be realized.

     Accrued interest receivable and payable

     The carrying amounts reported in the consolidated balance sheets for
     accrued interest receivable and payable approximate their fair value.

     Deposit liabilities

     The fair value disclosed for demand and savings deposits is by definition
     equal to the amount payable on demand at their reporting date (that is,
     their carrying amount). The carrying amount for variable-rate deposit
     accounts approximates their fair value. Fair values for fixed-rate
     certificates of deposit are estimated using a discounted cash flow
     calculation that applies interest rates currently being offered on
     certificates to a schedule of aggregated expected monthly maturities on
     these deposits. Substantially all of the Company's certificates of deposit
     at December 31, 2005 and 2004 mature in less than one year. Early
     withdrawals of fixed-rate certificates of deposit are not expected to be
     significant.

     Federal Home Loan Bank and other borrowings

     The fair values of the Company's borrowings are estimated using discounted
     cash flow analyses, based on the Company's incremental borrowing rates for
     similar types of borrowing arrangements.

     Junior subordinated debt

     The carrying amounts reported in the consolidated balance sheets for junior
     subordinated debt instruments approximate their fair value due to the
     variable nature of these instruments.

     Off-balance sheet instruments

     Fair values for the Company's off-balance sheet instruments (lending
     commitments and standby letters of credit) are based on quoted fees
     currently charged to enter into similar agreements, taking into account the
     remaining terms of the agreements and the counterparties' credit standing.

EARNINGS PER SHARE

Diluted earnings per share is based on the weighted average outstanding common
shares during each year, including common stock equivalents. Basic earnings per
share is based on the weighted average outstanding common shares during the
year.

Basic and diluted earnings per share, based on the weighted average outstanding
shares, are summarized as follows:


                                       70



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
EARNINGS PER SHARE (continued)



                                                   2005          2004          2003
                                               -----------   -----------   -----------
                                                                  
Basic:
   Net income applicable to common stock       $    28,065   $    20,057   $     8,689
   Average common shares outstanding            20,583,022    17,189,687    14,313,611
                                               -----------   -----------   -----------
   Earnings per share                          $      1.36   $      1.17   $      0.61
                                               ===========   ===========   ===========
Diluted:
   Net income applicable to common stock       $    28,065   $    20,057   $     8,689
                                               -----------   -----------   -----------
   Average common shares outstanding            20,583,022    17,189,687    14,313,611
   Stock option adjustment                       1,167,997       694,801       254,021
   Stock warrant adjustment                        915,142       520,632        45,541
                                               -----------   -----------   -----------
   Average common shares outstanding            22,666,161    18,405,120    14,613,173
                                               -----------   -----------   -----------
   Earnings per share                          $      1.24   $      1.09   $      0.59
                                               ===========   ===========   ===========


1,502,049 stock warrants are not included in the above calculations in the
first, second and third quarters of 2003, and 6,250 stock options are not
included in the above calculations in the third and fourth quarters of 2005 as
the effect would have been anti- dilutive.

RECLASSIFICATIONS

Certain amounts in the consolidated financial statements as of and for the years
ended December 31, 2004 and 2003 have been reclassified to conform with the
current presentation. The reclassifications have no effect on net income or
stockholders' equity as previously reported.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board published FASB
Statement No. 123 (revised 2004), Share-Based Payment (FAS 123(R)). FAS 123(R)
requires that the compensation cost relating to share-based payment
transactions, including grants of employee stock options, be recognized in
financial statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. FAS 123(R) permits entities to use any
option-pricing model that meets the fair value objective in the Statement.
Modifications of share-based payments will be treated as replacement awards with
the cost of the incremental value recorded in the financial statements.

The Statement will be effective for the Company at the beginning of the first
quarter of 2006. As of the effective date, the Company will apply the Statement
using a modified version of prospective application. Under that transition
method, compensation cost will be recognized for (1) all awards granted after
the required effective date and to awards modified, cancelled, or repurchased
after that date and (2) the portion of awards granted subsequent to completion
of an IPO and prior to the effective date for which the requisite service has
not yet been rendered, based on the grant-date fair value of those awards
calculated for pro forma disclosures under SFAS 123.

The impact of this Statement on the Company in 2006 and beyond will depend on
various factors; among them being our future compensation strategy. We estimate
that the Company will incur stock option compensation expense of approximately
$435 for the year ended December 31, 2006 related to the adoption of FAS123(R),
$307 of which is expected to be tax-effected. A significant amount of the pro
forma compensation costs (in the stock compensation plans table above) have been
calculated using a minimum value method and may not be indicative of amounts
which shall be expensed in future periods.

In December 2003, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 03-3, Accounting for Certain Loans and Debt
Securities Acquired in a Transfer. SOP 03-3 addresses the accounting for
acquired loans that show evidence of having deteriorated in terms of credit
quality since their origination and for which a loss is deemed probable of
occurring SOP 03-3 requires acquired loans to be recorded at their fair value,
defined as the present value of future cash flows including interest income, to
be recognized over the life of the loan. SOP 03-3 prohibits the carryover of an
allowance for loan loss on certain acquired loans within its scope considered in
the future cash flows assessment. In relation to the pending acquisitions
discussed in Note 21, we do not expect SOP 03-3 will have a material effect on
the Company's consolidated financial statements.

NOTE 2. MERGERS AND ACQUISITION ACTIVITY

On May 17, 2004, the Company acquired all of the outstanding stock of
Miller/Russell & Associates, Inc., in exchange for 200,000 shares of the
Company's stock, valued at $2,400, and $2,300 in cash plus direct expenses. The
value of the common stock was consistent with a subsequent common stock
offering. Goodwill recorded as a result of the acquisition totaled $3,946.
Miller/Russell provides investment advisory services to clients primarily in
Arizona, Southern Nevada and Southern California.

On December 30, 2003, the Company acquired all of the outstanding stock of
Premier Trust, Inc. (formerly Premier Trust of Nevada, Inc.) in exchange for
100,000 shares of the Company's stock, valued at $900, and $100 in cash plus
direct expenses. The value of


                                       71



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 2. MERGERS AND ACQUISITION ACTIVITY (continued)

the common stock was based on a recent common stock offering. $673 in customer
relationship intangible assets was recorded as a result of the acquisition.
Premier Trust, Inc. provides a full range of trust services to clients primarily
in Southern Nevada and Arizona.

The following table summarizes the estimated fair value of the assets acquired
and liabilities assumed at the dates of acquisition:



                                         Miller/Russell   Premier Trust
                                         --------------   -------------
                                                    
Cash                                         $  230           $  363
Furniture and equipment                          67               18
Customer relationship intangible asset          950              673
Goodwill                                      3,946               --
Other assets                                    463              103
                                             ------           ------
   Total assets acquired                      5,656            1,157
                                             ------           ------
Other liabilities assumed                       849              140
                                             ------           ------
   Net assets acquired                       $4,807           $1,017
                                             ======           ======


Of the $3,946 of goodwill, $1,931 is expected to be deductible for tax purposes.

The mergers were effected to allow the Company to provide its customers with a
wider array of financial services. The results of operations of each acquired
entity are included in the accompanying statements of operations since the
respective acquisition date.

In January 2006, the Company announced two definitive agreements to acquire
financial institutions in Las Vegas, Nevada. These agreements are discussed in
more detail in Note 21.

NOTE 3. RESTRICTIONS ON CASH AND DUE FROM BANKS

The Company is required to maintain balances in cash or on deposit with the
Federal Reserve Bank. The total of those reserve balances was approximately
$7,548 and $15,555 as of December 31, 2005 and 2004, respectively.

NOTE 4. SECURITIES

Carrying amounts and fair values of investment securities at December 31 are
summarized as follows:



                                                                2005
                                           ----------------------------------------------
                                                          GROSS        GROSS
                                           AMORTIZED   UNREALIZED   UNREALIZED     FAIR
                                              COST        GAINS      (LOSSES)      VALUE
                                           ---------   ----------   ----------   --------
                                                                     
SECURITIES HELD TO MATURITY
U. S. Treasury securities                   $  3,498      $ --       $    (43)   $  3,455
Small Business Administration loan pools         426        --             (2)        424
Municipal obligations                          7,128       275             --       7,403
Mortgage-backed securities                   104,119        --         (2,800)    101,319
                                            --------      ----       --------    --------
                                            $115,171      $275       $ (2,845)   $112,601
                                            ========      ====       ========    ========
SECURITIES AVAILABLE FOR SALE
U.S. Government-sponsored agencies          $138,787      $ --       $ (1,209)   $137,578
Mortgage-backed securities                   429,490        14        (13,765)    415,739
Auction rate securities                       67,999        --             --      67,999
Other                                         12,263        --           (217)     12,046
                                            --------      ----       --------    --------
                                            $648,539      $ 14       $(15,191)   $633,362
                                            ========      ====       ========    ========




                                                                2004
                                           ----------------------------------------------
                                                          Gross        Gross
                                           Amortized   Unrealized   Unrealized     Fair
                                              Cost        Gains      (Losses)      Value
                                           ---------   ----------   ----------   --------
                                                                     
SECURITIES HELD TO MATURITY
U. S. Treasury securities                   $  3,501      $ --       $   (26)    $  3,475
Small Business Administration loan pools         625        --            (8)         617
Municipal obligations                          7,290       464            --        7,754
Mortgage-backed securities                   118,133         3          (998)     117,138
                                            --------      ----       -------     --------
                                            $129,549      $467       $(1,032)    $128,984
                                            ========      ====       =======     ========
SECURITIES AVAILABLE FOR SALE
U.S. Government-sponsored agencies          $118,798      $  7       $  (457)    $118,348
Mortgage-backed securities                   537,382       631        (8,046)     529,967
Other                                         10,781        --           (23)      10,758
                                            --------      ----       -------     --------
                                            $666,961      $638       $(8,526)    $659,073
                                            ========      ====       =======     ========



                                       72



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 4. SECURITIES (continued)

Securities with carrying amounts of approximately $597,637 and $465,389 at
December 31, 2005 and 2004, respectively, were pledged for various purposes as
required or permitted by law.

Information pertaining to securities with gross unrealized losses at December
31, 2005 and 2004, aggregated by investment category and length of time that
individual securities have been in a continuous loss position follows:



                                                                2005
                                           ----------------------------------------------
                                           Less Than Twelve Months    Over Twelve Months
                                           -----------------------   --------------------
                                                Gross                   Gross
                                             Unrealized     Fair     Unrealized     Fair
                                               Losses      Value       Losses      Value
                                             ----------   -------    ----------   -------
                                                                      
SECURITIES HELD TO MATURITY
U. S. Treasury securities                       $  5      $   992      $   38     $ 2,463
Small Business Administration loan pools           1          156           1          17
Mortgage-backed securities                       633       32,168       2,167      67,131
                                                ----      -------      ------     -------
                                                $639      $33,316      $2,206     $69,611
                                                ====      =======      ======     =======




                                           Less Than Twelve Months     Over Twelve Months
                                           -----------------------   ---------------------
                                               Gross                    Gross
                                            Unrealized     Fair      Unrealized     Fair
                                              Losses       Value       Losses       Value
                                            ----------   --------    ----------   --------
                                                                      
SECURITIES AVAILABLE FOR SALE
U.S. Government-sponsored agencies            $  214     $ 21,484      $   995    $ 66,168
Mortgage-backed securities                     1,523       92,384       12,242     321,103
Other                                            217       12,046           --          --
                                              ------     --------      -------    --------
                                              $1,954     $125,914      $13,237    $387,271
                                              ======     ========      =======    ========




                                                                2004
                                           ----------------------------------------------
                                           Less Than Twelve Months    Over Twelve Months
                                           -----------------------   --------------------
                                                Gross                   Gross
                                             Unrealized     Fair     Unrealized     Fair
                                               Losses      Value       Losses      Value
                                             ----------   -------    ----------   -------
                                                                      
SECURITIES HELD TO MATURITY
U. S. Treasury securities                       $ 26      $ 3,475       $ --      $    --
Small Business Administration loan pools           4          305          4          312
Mortgage-backed securities                       795       84,144        203       26,050
                                                ----      -------       ----      -------
                                                $825      $87,924       $207      $26,362
                                                ====      =======       ====      =======




                                           Less Than Twelve Months     Over Twelve Months
                                           -----------------------   ---------------------
                                               Gross                    Gross
                                            Unrealized     Fair      Unrealized     Fair
                                              Losses       Value       Losses       Value
                                            ----------   --------    ----------   --------
                                                                      
SECURITIES AVAILABLE FOR SALE
U.S. Government-sponsored agencies            $  457     $105,589      $   --     $    --
Mortgage-backed securities                     4,641      359,352       3,405      99,699
Other                                             23       10,758          --          --
                                              ------     --------      ------     -------
                                              $5,121     $475,699      $3,405     $99,699
                                              ======     ========      ======     =======


Management evaluates securities for other-than-temporary impairment at least on
a quarterly basis, and more frequently when economic or market conditions
warrant such evaluation. Consideration is given to (1) the length of time and
the extent to which the fair value has been less than cost, (2) the financial
condition and near term prospects of the issuer, and (3) the intent and ability
of the Company to retain its investment in the issuer for a period of time
sufficient to allow for any anticipated recovery in fair value.

At December 31, 2005 and 2004, 125 and 94 debt securities, respectively, have
unrealized losses with aggregate depreciation of approximately 2.7% and 1.4%,
respectively, from the Company's amortized cost basis. These unrealized losses
relate primarily to fluctuations in the current interest rate environment. In
analyzing an issuer's financial condition, management considers whether the
securities are issued by the federal government or its agencies, whether
downgrades by bond rating agencies have occurred, and industry analysis reports.
Since no downgrades have occured and management has the ability and intent to
hold debt securities for the foreseeable future, no declines are deemed to be
other than temporary.


                                       73



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 4. SECURITIES (continued)

The amortized cost and fair value of securities as of December 31, 2005 by
contractual maturities are shown below. The actual maturities of the
mortgage-backed securities and Small Business Administration loan pools may
differ from their contractual maturities because the loans underlying the
securities may be repaid without any penalties. The constructive maturity of
auction rate securities is typically much earlier than the contractual maturity.
Therefore, these securities are listed separately in the maturity summary.
Expected maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.



                                           Amortized     Fair
                                             Cost        Value
                                           ---------   --------
                                                 
SECURITIES HELD TO MATURITY
Due in one year or less                     $  3,498   $  3,455
Due after one year through five years             --         --
Due after five years through ten years         1,686      1,751
Due after ten years                            5,442      5,652
Small Business Administration loan pools         426        424
Mortgage backed securities                   104,119    101,319
                                            --------   --------
                                            $115,171   $112,601
                                            ========   ========
SECURITIES AVAILABLE FOR SALE
Due in one year or less                     $ 69,390   $ 69,137
Due after one year through five years         32,400     31,936
Due after five years through ten years        28,938     28,578
Due after ten years                            8,059      7,927
Mortgage backed securities                   429,490    415,739
Auction rate securities                       67,999     67,999
Other                                         12,263     12,046
                                            --------   --------
                                            $648,539   $633,362
                                            ========   ========


Gross gains and losses from investment securities of $138 and $69 in 2005, $177
and $158 in 2004, and $0 and $265 in 2003, respectively, were recognized on the
sale of securities.

NOTE 5. LOANS

The components of the Company's loan portfolio as of December 31 are as follows:



                                       2005         2004
                                    ----------   ----------
                                           
Construction and land development   $  432,668   $  323,176
Commercial real estate                 727,210      491,949
Residential real estate                272,861      116,360
Commercial and industrial              342,452      241,292
Consumer                                20,434       17,682
Less: net deferred loan fees            (2,288)      (1,924)
                                    ----------   ----------
                                     1,793,337    1,188,535
Less: Allowance for loan losses        (21,192)     (15,271)
                                    ----------   ----------
                                    $1,772,145   $1,173,264
                                    ==========   ==========


Information about impaired and non-accrual loans as of and for the years ended
December 31 is as follows:



                                                              2005    2004
                                                              ----   ------
                                                               
Total impaired loans, all with an allowance for loan losses   $107   $1,718
                                                              ====   ======
Related allowance for loan losses on impaired loans           $ 26   $  498
                                                              ====   ======
Total non accrual loans                                       $107   $1,591
                                                              ====   ======
Loans past due 90 days or more and still accruing             $ 34   $    2
                                                              ====   ======



                                       74



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 5. LOANS (continued)



                                                    2005    2004    2003
                                                    ----   ------   ----
                                                           
Average balance during the year on impaired loans   $115   $1,553   $434
                                                    ====   ======   ====
Interest income recognized on impaired loans        $  1   $   61   $  6
                                                    ====   ======   ====


     The Company is not committed to lend significant additional funds on these
     impaired loans.

     Changes in the allowance for loan losses for the years ended December 31
     are as follows:



                                               2005      2004      2003
                                             -------   -------   -------
                                                        
Balance, beginning                           $15,271   $11,378   $ 6,449
   Provision charged to operating expense      6,179     3,914     5,145
   Recoveries of amounts charged off             196       157       420
   Less amounts charged off                     (454)     (178)   (1,373)
   Reclassification from other liabilities        --        --       737
                                             -------   -------   -------
Balance, ending                              $21,192   $15,271   $11,378
                                             =======   =======   =======


In accordance with regulatory reporting requirements and American Institute of
Certified Public Accountants' Statement of Position 01-06, Accounting by Certain
Entities that Lend to or Finance the Activities of Others, the Company has
reclassified the portion of its allowance for loan losses that relates to
off-balance sheet risk during the year ended December 31, 2002. During the year
ended December 31, 2003, management reevaluated its methodology for calculating
this amount and reclassified an amount from other liabilities to the allowance
for loan losses. The liability amount was approximately $455 and $307 as of
December 31, 2005 and 2004, respectively.

NOTE 6. PREMISES AND EQUIPMENT

The major classes of premises and equipment and the total accumulated
depreciation and amortization as of December 31 are as follows:



                                                   2005       2004
                                                 --------   --------
                                                      
Land                                             $ 20,505   $ 13,355
Bank premises                                      24,214      6,246
Equipment and furniture                            20,517     15,120
Leasehold improvements                              2,870      4,306
Construction in progress                            3,748         --
                                                 --------   --------
                                                   71,854     39,027
Less accumulated depreciation and amortization    (13,424)    (9,663)
                                                 --------   --------
   Net premises and equipment                    $ 58,430   $ 29,364
                                                 ========   ========


Our remaining commitment related to our construction in progress at December 31,
2005 is $16,166.

NOTE 7. INCOME TAX MATTERS

The cumulative tax effects of the primary temporary differences as of December
31 are shown in the following table:



                                                        2005      2004
                                                      -------   -------
                                                          
Deferred tax assets:
   Allowance for loan losses                          $ 7,800   $ 5,500
   Unrealized loss on available for sale securities     5,500     2,800
   Organizational costs                                   200       200
   Accrual to cash adjustment                              --       200
   Deferred compensation                                  200       100
   Other                                                  507        31
                                                      -------   -------
Total deferred tax assets                              14,207     8,831
                                                      -------   -------
Deferred tax liabilities:
   Deferred loan costs                                 (1,600)     (800)
   Premises and equipment                              (1,300)   (1,700)
   Federal Home Loan Bank dividend                       (500)     (300)
   Other                                                   --       (82)
                                                      -------   -------
   Total deferred tax liabilities                      (3,400)   (2,882)
                                                      -------   -------
      NET DEFERRED TAX ASSET                          $10,807   $ 5,949
                                                      =======   =======



                                       75



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 7. INCOME TAX MATTERS (continued)

As of December 31, 2005 and 2004, no valuation allowance was considered
necessary as management believes it is more likely than not that the deferred
tax assets will be realized due to taxes paid in prior years or future
operations. The provision for income taxes charged to operations consists of the
following for the years ended December 31:



                                        2005      2004      2003
                                      -------   -------   -------
                                                 
Current                               $17,530   $11,030   $ 5,641
Deferred                               (2,158)      (69)   (1,470)
                                      -------   -------   -------
   Total provision for income taxes   $15,372   $10,961   $ 4,171
                                      =======   =======   =======


The reasons for the differences between the statutorty federal income tax rate
and the effective tax rates are summarized as follows:



                                                       2005      2004     2003
                                                     -------   -------   ------
                                                                
Computed "expected" tax expense                      $15,203   $10,856   $4,501
Increase (decrease) resulting from:
   State income taxes, net of federal benefits and
      dividends received deductions                      670       580      145
   Bank-owned life insurance                            (582)     (420)    (338)
   Tax-exempt income                                    (133)     (116)    (116)
   Nondeductible expenses                                168       100       59
   Other                                                  46       (39)     (80)
                                                     -------   -------   ------
                                                     $15,372   $10,961   $4,171
                                                     =======   =======   ======


NOTE 8. DEPOSITS

At December, 31 2005, the scheduled maturities of all time deposits are as
follows:

    
2006   $331,735
2007      6,151
2008      1,168
2009      2,616
2010        289
       --------
       $341,959
       ========



As of December 31, 2005 and 2004, approximately $313,033 and $255,415,
respectively, of the Company's non-interest bearing demand deposits consisted of
demand accounts maintained by title insurance companies. The Company provides an
analysis earnings credit for certain title company depositors, which credit is
calculated by applying a variable crediting rate to such customers' average
monthly deposit balances, less any internal charges incurred, which are
comprised of common deposit service charges. We then purchase external services
on behalf of these customers based on the amount of the earnings credit. These
external services, which are commonly offered in the banking industry, include
courier, bookkeeping and data processing services. The expense of these external
services totaled $2,105, $701 and $95 for the years ended December 31, 2005,
2004 and 2003, respectively, and is included in customer service expense in the
accompanying statements of income.

NOTE 9. BORROWED FUNDS

The Company has a line of credit available from the Federal Home Loan Bank
(FHLB). Borrowing capacity is determined based on collateral pledged, generally
consisting of securities, at the time of the borrowing. The Company also has
borrowings from other sources pledged by securities. A summary of the Company's
borrowings as of December 31, 2005 and 2004 follows:



                                                                                   2005      2004
                                                                                 -------   --------
                                                                                     
SHORT TERM
FHLB Advances and other (weighted average rate is 2005: 4.00% and 2004: 2.21%)   $ 7,000   $159,900
Securities sold under agreement to repurchase (weighted average
   rate is 2005: 2.74% and 2004: 2.32%)                                           78,170     25,594
                                                                                 -------   --------
   Due in one year or less                                                       $85,170   $185,494
                                                                                 =======   ========

LONG TERM
FHLB Advances (weighted average rate is 2005 and 2004: 2.63%)                    $63,700   $ 63,700
Other long term debt (weighted average rate is 8.79%)                              9,812         --
                                                                                 -------   --------
   Due in over one year                                                          $73,512   $ 63,700
                                                                                 =======   ========


FHLB advances and other borrowings mature as of December 31, 2005 as follows:


                                       76



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 9. BORROWED FUNDS (continued)

                        
Year Ending December 31:
   2006                    $34,501
   2007                     29,410
   2008                        118
   2009                        131
   2010                      9,352
                           -------
                           $73,512
                           =======



On December 30, 2005, the Company purchased the corporate headquarters of
BankWest of Nevada. The location was previously leased by the Company. In
connection with this purchase, the Company assumed a note on the building. The
note amount at December 31, 2005 is $9,812, has a fixed interest rate of 8.79%,
and matures in 2010. The note is secured by the purchased building.

The Company's banks have entered into agreements under which they can borrow up
to $84,000 on an unsecured basis. The lending institutions will determine the
interest rate charged on borrowings at the time of the borrowing. The Company
has also entered into an agreement under which it can borrow up to $10,000. The
line of credit is secured by BankWest of Nevada stock and carries an interest
rate at the federal funds borrowing rate plus 1.50%. There were no borrowings
against these lines of credit at December 31, 2005 or 2004.

NOTE 10. JUNIOR SUBORDINATED DEBT

In December 2002, BankWest Nevada Capital Trust II was formed and issued
floating rate Cumulative Trust Preferred Securities, which are classified as
junior subordinated debt in the accompanying balance sheet in the amount of
$15,464. The rate is based on the three month London Interbank Offered Rate
(LIBOR) plus 3.35%. Three month LIBOR was 4.54% at December 31, 2005. The funds
raised from the capital trust's issuance of these securities were all passed to
the Company. The sole asset of the BankWest Nevada Capital Trust II is a note
receivable from the Company. These securities require quarterly interest
payments and mature in 2033. These securities may be redeemable at par beginning
in 2008.

In July 2001, BankWest Nevada Capital Trust I was formed and issued floating
rate Cumulative Trust Preferred Securities, which are classified as junior
subordinated debt in the accompanying balance sheet in the amount of $15,464.
The rate is based on the six month LIBOR plus 3.75%. Six month LIBOR was 4.70%
at December 31, 2005. The funds raised from the capital trust's issuance of
these securities were all passed to the Company. The sole asset of the BankWest
Nevada Capital Trust I is a note receivable from the Company. These securities
require semiannual interest payments and mature in 2031. These securities may be
redeemed in years 2006 through 2011 at a premium as outlined in the Indenture
Agreement.

In the event of certain changes or amendments to regulator y requirements or
federal tax rules, the preferred securities are redeemable. The Trusts are 100%
owned finance subsidiaries of the Company and the Trusts' obligations under the
preferred securities are fully and unconditionally guaranteed by the Company.

NOTE 11. COMMITMENTS AND CONTINGENCIES

Contingencies

In the normal course of business, the Company is involved in various legal
proceedings. In the opinion of management, any liability resulting from such
proceedings would not have a material adverse effect on the consolidated
financial statements.

Financial instruments with off-balance sheet risk

The Company is party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. They involve, to varying degrees, elements of credit risk in excess
of amounts recognized in the consolidated balance sheets.

The Company's exposure to credit loss in the event of nonperformance by the
other parties to the financial instrument for these commitments is represented
by the contractual amounts of those instruments. The Company uses the same
credit policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments. A summary of the contract amount of the Company's
exposure to off-balance sheet risk as of December 31 is as follows:



                                                           2005       2004
                                                         --------   --------
                                                              
Commitments to extend credit, including unsecured loan
   commitments of $111,522 in 2005 and $81,606 in 2004   $750,349   $423,767
Credit card guarantees                                      7,616      5,421
Standby letters of credit, including unsecured letters
   of credit of $4,550 in 2005 and $1,264 in 2004          28,720      5,978
                                                         --------   --------
                                                         $786,685   $435,166
                                                         ========   ========



                                       77



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 11. COMMITMENTS AND CONTINGENCIES (continued)

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (continued)

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Company evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Company upon extension of credit, is based on
management's credit evaluation of the party. Collateral held varies, but may
include accounts receivable, inventory, property and equipment, residential real
estate and income-producing commercial properties.

The Company guarantees certain customer credit card balances held by an
unrelated third party. These unsecured guarantees act to streamline the credit
underwriting process and are issued as a service to certain customers who wish
to obtain a credit card from the third party vendor. The Company recognizes
nominal fees from these arrangements and views them strictly as a means of
maintaining good customer relationships. The guarantee is offered to those
customers who, based solely upon management's evaluation, maintain a
relationship with the Company that justifies the inherent risk. All such
guarantees exist for the life of each respective credit card relationship. The
Company would be required to perform under the guarantee upon a customer's
default on the credit card relationship with the third party. Historical losses
under this program have been nominal. Upon entering into a credit card
guarantee, the Company records the related liability at fair value pursuant to
FASB Interpretation 45 (FIN 45), Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. Thereafter, the related liability is evaluated pursuant to FASB 5. The
total credit card balances outstanding at December 31, 2005 and 2004 were $1,566
and $1,109, respectively.

Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. Collateral held varies
as specified above and is required as the Company deems necessary. Essentially
all letters of credit issued have expiration dates within one year. Upon
entering into a letter of credit, the Company records the related liability at
fair value pursuant to FIN 45. Thereafter, the related liability is evaluated
pursuant to FASB 5.

The total liability for financial instruments with off-balance sheet risk as of
December 31, 2005 and 2004 was $455 and $307, respectively.

LEASE COMMITMENTS

The Company leases certain premises and equipment under noncancelable operating
leases expiring through 2015. The following is a schedule of future minimum
rental payments under these leases at December 31, 2005:

                        
Year Ending December 31:
   2006                    $ 2,053
   2007                      2,168
   2008                      2,110
   2009                      1,999
   2010                      2,043
   Thereafter                6,034
                           -------
                           $16,407
                           =======



Rent expense of $3,902, $3,174 and $2,017 is included in occupancy expenses for
the years ended December 31, 2005, 2004 and 2003, respectively.

CONCENTRATIONS

The Company grants commercial, construction, real estate and consumer loans to
customers through branch offices located in the Company's primary markets. The
Company's business is concentrated in these areas and the loan portfolio
includes significant credit exposure to the commercial real estate industry of
these areas. As of December 31, 2005 and 2004, commercial real estate related
loans accounted for approximately 65% and 68% of total loans, respectively, and
approximately 7% of commercial real estate loans are secured by undeveloped
land. Substantially all of these loans are secured by first liens with an
initial loan to value ratio of generally not more than 80%. Approximately
one-half of these real estate loans are owner occupied. In addition,
approximately 5% and 7% of total loans are unsecured as of December 31, 2005 and
2004, respectively. Approximately 29% of our residential real estate loan
portfolio is comprised of interest only loans. These loans have an average
loan-to-value of less than 60%.

The loans are expected to be repaid from cash flows or proceeds from the sale of
selected assets of the borrowers. The Company's policy for requiring collateral
is to obtain collateral whenever it is available or desirable, depending upon
the degree of risk the Company is willing to take.


                                       78



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 12. STOCK OPTIONS, STOCK WARRANTS AND STOCK APPRECIATION RIGHTS

During 2005, the stockholders approved the 2005 Stock Incentive Plan (the Plan).
The Plan is an amendment and restatement of our prior stock compensation plans,
and therefore supersedes the prior plans while preserving the material terms of
the prior plan awards. The Plan gives the Board of Directors the authority to
grant up to 3,253,844 stock awards consisting of unrestricted stock, stock
units, dividend equivalent rights, stock options (incentive and non-qualified),
stock appreciation rights, restricted stock, and performance and annual
incentive awards.

The Plan contains certain individual limits on the maximum amount that can be
paid in cash under the plan and on the maximum number of shares of common stock
that may be issued under the Plan in a calendar year. The maximum number of
shares subject to options or stock appreciation rights that can be issued under
the Plan to any person is 150,000 shares in any calendar year. The maximum
number of shares that can be issued under the Plan to any person, other than
pursuant to an option or stock appreciation right, is 150,000 in any calendar
year. The maximum amount that may be earned as an annual incentive award or
other cash award in any fiscal year by any one person is $5.0 million and the
maximum amount that may be earned as a performance award or other cash award in
respect of a performance period by any one person is $15.0 million.

The number of awards available to grant as of December 31, 2005 is 960,700.

STOCK OPTIONS

A summary of stock option activity during the years ended December 31 follows:



                                              2005         2004         2003
                                           ----------   ----------   ----------
                                                            
Outstanding options, beginning of year      1,986,008    1,680,308    1,359,850
   Granted                                    406,500      439,500      442,000
   Exercised                                 (228,114)     (97,800)    (108,042)
   Forfeited                                  (39,600)     (36,000)     (13,500)
                                           ----------   ----------   ----------
Outstanding options, end of year            2,124,794    1,986,008    1,680,308
                                           ==========   ==========   ==========
Options exercisable, end of year              783,494      642,908      450,208
Weighted-average exercise price:
  Outstanding options, beginning of year   $     7.96   $     6.70   $     5.87
  Options granted, during the year         $    17.88   $    12.17   $     7.85
  Options exercised, during the year       $     5.30   $     4.24   $     1.64
  Options outstanding, end of year         $    10.10   $     7.96   $     6.70
  Options forfeited, during the year       $    10.92   $     3.79   $     7.03
  Options exercisable, end of year         $     7.43   $     6.04   $     4.90
Weighted-average expiration (in years)           7.63         8.03         8.43


A further summary of stock options outstanding at December 31, 2005 is as
follows:



                             Outstanding Options                                        Exercisable options
- -----------------------------------------------------------------------------   -----------------------------------
                                                           Weighted average
                                     Weighted average   remaining contractual                      Weighted average
Exercise price    Number of shares    exercise price         life (years)       Number of shares    exercise price
- --------------    ----------------   ----------------   ---------------------   ----------------   ----------------
                                                                                    
 $1.39 - $3.79           27,500           $ 3.01                 3.62                 27,500            $ 3.01
 $6.33 - $9.00        1,296,394             7.23                 6.97                690,294              7.10
$12.00 - $16.50         733,650            14.09                 8.80                 62,700             12.05
$22.00 - $26.74          38,000            22.00                 8.94                     --                --
$26.75 - $30.75          29,250            28.51                 9.28                  3,000             28.00


During 2005, the Company granted 406,500 incentive and nonqualifying stock
options. Substantially all of these options vest over five years at 20% upon
each anniversary date of the grant. These options expire ten years from the date
of grant, and their weighted average exercise price is $17.88. Also, the Company
granted 27,000 shares of restricted stock. The restricted stock vests at 20% per
year, starting one year from the date of grant. The expense recorded in 2005
related to these restricted shares was $82.

During 2004, the Company granted 439,500 incentive and nonqualifying stock
options. All of these options vest over five years at 20% upon each anniversary
date of the grant. These options expire ten years from the date of grant, and
their weighted average exercise price is $12.17.


                                       79



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 12. STOCK OPTIONS, STOCK WARRANTS AND STOCK APPRECIATION RIGHTS (continued)

STOCK OPTIONS (continued)

During 2003, the Company granted 442,000 incentive and nonqualifying stock
options. All of these options vest over five years at 20% upon each anniversary
date of the grant. These options expire ten years from the date of grant, and
their weighted average exercise price is $7.85.

STOCK APPRECIATION RIGHTS

On February 14, 2000, the Company's Board of Directors approved the 2000 Stock
Appreciation Rights Plan ("SAR Plan"). The SAR Plan authorized 150,000 rights to
be granted to certain directors, officers and key employees at the discretion of
the Board of Directors. Each right gave the grantee the right to receive cash
payment from the Company equal to the excess of (a) the exercise price of the
SAR over, (b) grant price of the SAR. Grantees may exercise their rights at any
time between the time a right vests and five years following the date of grant.
Rights granted under the SAR Plan vested in annual installments of 25% beginning
one year following the vesting commencement date. Pursuant to the plan, prior to
an initial public offering, the exercise price is equal to the book value. As
such, changes in the book value of the Company's common stock were reflected as
a charge to compensation expense for each period in which the rights are
outstanding pursuant to FASB Interpretation No. 28, Accounting for Stock
Appreciation Rights and Other Variable Stock Option or Award Plans. In 2003, the
Board of Directors approved an amendment to the plan that effectively tripled
the number of rights granted to each participating employee. In 2005, the SAR
Plan was superseded by the 2005 Stock Incentive Plan. The expense recorded in
2004 and 2003 was approximately $93 and $568, respectively. No SARs were
outstanding as of December 31, 2005 and no expense was recorded in 2005. All
outstanding rights were exercised in 2004 and total payments to the participants
in 2004 were approximately $820.

Information concerning stock appreciation rights for the year ended December 31
is as follows:



                                              2005     2004       2003
                                              ----   --------   -------
                                                       
Rights outstanding, beginning of year           --    216,000    72,000
   Granted                                      --         --        --
   Forfeited                                    --         --        --
   Exercised                                    --   (216,000)       --
   Shares granted through amendment of plan     --         --   144,000
                                               ---   --------   -------
Right outstanding, end of year                  --         --   216,000
                                               ===   ========   =======
Rights exercisable, end of year                 --         --   216,000


STOCK WARRANTS

In 2002, in connection with a common stock offering the Company entered into a
warrant purchase agreement in which the Company authorized the sale and issuance
of 1,502,049 stock warrants. The warrants are exercisable at $7.62 and expire in
2010. During the years ended December 31, 2005 and 2004, 105,823 and 20,481
warrants were exercised, respectively. 1,375,745 warrants are outstanding as of
December 31, 2005.

NOTE 13. REGULATORY CAPITAL

The Company and the Banks are subject to various regulatory capital requirements
administered by federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory -- and possibly additional
discretionary -- actions by regulators that, if undertaken, could have a direct
material effect on the Company's and the Bank's consolidated financial
statements. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Company and the Banks must meet specific capital
guidelines that involve qualitative measures of their assets, liabilities, and
certain off-balance sheet items as calculated under regulatory accounting
practices. The capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings, and
other factors. Prompt corrective action provisions are not applicable to bank
holding companies.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Banks to maintain minimum amounts and ratios (set
forth in the following table) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). Management believes, as of December 31,
2005, that the Company and the Banks meet all capital adequacy requirements to
which they are subject.

As of December 31, 2005, the most recent notification from federal banking
agencies categorized the Company, BankWest of Nevada, Alliance Bank of Arizona
and Torrey Pines Bank as well-capitalized as defined by the banking agencies. To
be categorized as well-capitalized, the Banks must maintain minimum total
risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the
table below.


                                       80



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 13. REGULATORY CAPITAL (continued)

The actual capital amounts and ratios for the Banks and Company as of December
31 are presented in the following table:



                                                                    For Capital            To Be
                                                   Actual        Adequacy Purposes   Well Capitalized
                                              ----------------   -----------------   ----------------
                                               Amount    Ratio     Amount    Ratio    Amount    Ratio
                                              --------   -----    --------   -----   --------   -----
                                                                              
AS OF DECEMBER 31, 2005:
   Total Capital (to Risk Weighted Assets)
      BankWest of Nevada                      $148,180   11.1%    $106,877    8.0%   $133,597   10.0%
      Alliance Bank of Arizona                  50,374   10.5%      38,371    8.0%     47,963   10.0%
      Torrey Pines Bank                         37,498   10.8%      27,673    8.0%     34,591   10.0%
      Company                                  300,198   13.8%     173,759    8.0%    217,198   10.0%
   Tier I Capital (to Risk Weighted Assets)
      BankWest of Nevada                       135,607   10.2%      53,439    4.0%     80,158    6.0%
      Alliance Bank of Arizona                  44,817    9.3%      19,185    4.0%     28,778    6.0%
      Torrey Pines Bank                         33,981    9.8%      13,836    4.0%     20,755    6.0%
      Company                                  278,550   12.8%      86,879    4.0%    130,319    6.0%
   Tier I Capital (to Average Assets)
      BankWest of Nevada                       135,607    7.4%      73,422    4.0%     91,777    5.0%
      Alliance Bank of Arizona                  44,817    8.8%      20,368    4.0%     25,460    5.0%
      Torrey Pines Bank                         33,981    8.7%      15,608    4.0%     19,510    5.0%
      Company                                  278,550   10.2%     109,727    4.0%    137,159    5.0%
As of December 31, 2004:
   Total Capital (to Risk Weighted Assets)
      BankWest of Nevada                      $105,544   10.4%    $ 80,968    8.0%   $101,210   10.0%
      Alliance Bank of Arizona                  35,258   12.6%      22,428    8.0%     28,035   10.0%
      Torrey Pines Bank                         28,809   14.4%      16,013    8.0%     20,016   10.0%
      Company                                  178,784   12.0%     119,632    8.0%    149,540   10.0%
   Tier I Capital (to Risk Weighted Assets)
      BankWest of Nevada                        95,449    9.4%      40,484    4.0%     60,726    6.0%
      Alliance Bank of Arizona                  31,810   11.3%      11,214    4.0%     16,821    6.0%
      Torrey Pines Bank                         26,774   13.4%       8,006    4.0%     12,010    6.0%
      Company                                  163,205   10.9%      59,816    4.0%     89,724    6.0%
   Tier I Capital (to Average Assets)
      BankWest of Nevada                        95,449    6.1%      62,970    4.0%     78,713    5.0%
      Alliance Bank of Arizona                  31,810   10.3%      12,394    4.0%     15,492    5.0%
      Torrey Pines Bank                         26,774   10.9%       9,830    4.0%     12,288    5.0%
      Company                                  163,205    7.7%      85,321    4.0%    106,651    5.0%


Additionally, State of Nevada banking regulations restrict distribution of the
net assets of BankWest of Nevada (BankWest) because such regulations require the
sum of BankWest's stockholders' equity and reserve for loan losses to be at
least 6% of the average of BankWest's total daily deposit liabilities for the
preceding 60 days. As a result of these regulations, approximately $94,584 and
$74,283 of BankWest's stockholders' equity was restricted at December 31, 2005
and 2004, respectively.

Alliance Bank of Arizona and Torrey Pines Bank have agreed to maintain a total
Tier 1 capital to total assets ratio of at least 8% for their first three years
of existence.

The States of Nevada and Arizona require that trust companies maintain capital
of at least $300 and $500, respectively. Premier Trust meets these capital
requirements as of December 31, 2005 and 2004.

NOTE 14. EMPLOYEE BENEFIT PLAN

The Company has a qualified 401(k) employee benefit plan for all eligible
employees. Participants are able to defer between 1% and 15% (up to a maximum of
$14 for those under 50 years of age) of their annual compensation. The Company
may elect to contribute a discretionary amount each year. The Company's total
contribution was $596, $385 and $230 for the years ended December 31, 2005, 2004
and 2003, respectively.


                                       81



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 15. TRANSACTIONS WITH RELATED PARTIES

Principal stockholders of the Company and officers and directors, including
their families and companies of which they are principal owners, are considered
to be related parties. These related parties were loan customers of, and had
other transactions with, the Company in the ordinary course of business. In
management's opinion, these loans and transactions were on the same terms as
those for comparable loans and transactions with unrelated parties.

LOAN TRANSACTIONS

The aggregate activity in such loans for the years ended December 31 was as
follows:



                       2005       2004
                     --------   --------
                          
Balance, beginning   $ 27,087   $ 18,222
   New loans           31,650     44,380
   Repayments         (31,129)   (35,515)
                     --------   --------
Balance, ending      $ 27,608   $ 27,087
                     ========   ========


None of these loans are past due, on nonaccrual or have been restructured to
provide a reduction or deferral of interest or principal because of
deterioration in the financial position of the borrower. There were no loans to
a related party that were considered classified loans at December 31, 2005 or
2004.

Total loan commitments outstanding with related parties total approximately
$25,824 and $35,418 at December 31, 2005 and 2004, respectively.

OTHER TRANSACTIONS

In 2003, the Company purchased land from a related party in the amount of
$1,165. In the fourth quarter of 2004, the Company began leasing office space to
a related party. Total rent income recognized under this lease during the years
ended December 31, 2005 and 2004 was $126 and $26, respectively.

NOTE 16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments at December 31
is as follows:



                                             2005                      2004
                                   -----------------------   -----------------------
                                    CARRYING       FAIR       Carrying       Fair
                                     AMOUNT        VALUE       Amount        Value
                                   ----------   ----------   ----------   ----------
                                                              
Financial assets:
   Cash and due from banks         $  111,150   $  111,150   $   92,282   $   92,282
   Federal funds sold                  63,186       63,186       23,115       23,115
   Securities held to maturity        115,171      112,601      129,549      128,984
   Securities available for sale      633,362      633,362      659,073      659,073
   Federal Home Loan Bank stock        14,456       14,456       15,097       15,097
   Loans, net                       1,772,145    1,759,336    1,173,264    1,170,202
   Accrued interest receivable         10,545       10,545        8,359        8,359
Financial liabilities:
   Deposits                         2,393,812    2,394,199    1,756,036    1,756,297
   Accrued interest payable             2,634        2,634        2,439        2,439
   Other borrowed funds               158,682      157,639      249,194      248,048
   Junior subordinated debt            30,928       30,928       30,928       30,928


INTEREST RATE RISK

The Company assumes interest rate risk (the risk to the Company's earnings and
capital from changes in interest rate levels) as a result of its normal
operations. As a result, the fair values of the Company's financial instruments
as well as its future net interest income will change when interest rate levels
change and that change may be either favorable or unfavorable to the Company.

Interest rate risk exposure is measured using interest rate sensitivity analysis
to determine our change in net portfolio value and net interest income resulting
from hypothetical changes in interest rates. If potential changes to net
portfolio value and net interest income resulting from hypothetical interest
rate changes are not within the limits established by the Board of Directors,
the Board of Directors may direct management to adjust the asset and liability
mix to bring interest rate risk within board-approved limits. As of December 31,
2005, the Company's interest rate risk profile was within all Board-prescribed
limits.


                                       82



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 16. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
INTEREST RATE RISK (continued)

The Company manages its interest rate risk through its investment and repurchase
activities. The Company seeks to maintain a moderately asset sensitive position
(i.e., interest income in a rising rate environment would rise more than the
Company's interest expense and conversely in a falling interest rate
environment).

FAIR VALUE OF COMMITMENTS

The estimated fair value of the standby letters of credit at December 31, 2005
and 2004 is insignificant. Loan commitments on which the committed interest rate
is less than the current market rate are also insignificant at December 31, 2005
and 2004.

NOTE 17. PARENT COMPANY FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004



                                                   2005       2004
                                                 --------   --------
                                                      
ASSETS
   Cash and cash equivalents                     $ 12,518   $  7,185
   Securities available for sale                   49,926         --
   Investment in subsidiaries                     212,970    156,826
   Other assets                                     1,201      1,221
                                                 --------   --------
                                                 $276,615   $165,232
                                                 ========   ========
LIABILITIES AND STOCKHOLDERS' EQUITY
   Accrued interest and other liabilities        $  1,464   $    733
   Junior subordinated debt                        30,928     30,928
                                                 --------   --------
      Total liabilities                            32,392     31,661
                                                 --------   --------
   Stockholders' equity:
      Common stock                                      2          2
      Additional paid-in capital                  167,996     80,459
      Retained earnings                            86,281     58,216
      Deferred compensation - restricted stock       (364)        --
      Accumulated other comprehensive loss         (9,692)    (5,106)
                                                 --------   --------
   Total stockholders' equity                     244,223    133,571
                                                 --------   --------
                                                 $276,615   $165,232
                                                 ========   ========


CONDENSED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003



                                                   2005      2004      2003
                                                 -------   -------   -------
                                                            
Interest income                                  $   929   $    97   $    --
Interest expense on borrowings                     2,112     1,539     1,494
                                                 -------   -------   -------
   Net interest expense                           (1,183)   (1,442)   (1,494)
                                                 -------   -------   -------
Other income:                                     30,629    22,096    10,102
Income from consolidated subsidiaries
Other income                                          77        --        --
                                                 -------   -------   -------
   Total other income                             30,706    22,096    10,102
Expenses:
   Salaries and employee benefits                  1,783       330       212
   Other                                             466       383       218
                                                 -------   -------   -------
                                                   2,249       713       430
                                                 -------   -------   -------
      Income before income tax benefit            27,274    19,941     8,178
      Income tax benefit                             791       116       511
                                                 -------   -------   -------
      Net income                                 $28,065   $20,057   $ 8,689
                                                 =======   =======   =======



                                       83



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 17. PARENT COMPANY FINANCIAL INFORMATION (continued)
CONDENSED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003



                                                                  2005       2004       2003
                                                                --------   --------   --------
                                                                             
Cash Flows from Operating Activities:
   Net income                                                   $ 28,065   $ 20,057   $  8,689
   Adjustments to reconcile net income to net cash
   used in operating activities:
      Equity in net undistributed earnings of consolidated       (30,629)   (22,096)   (10,102)
      subsidiaries
      Net accretion of securities discounts                         (877)        --         --
      (Increase) decrease in other assets                             44        (92)       336
      Increase in other liabilities                                  731        129        436
      Other, net                                                      26         --         --
                                                                --------   --------   --------
         Net cash used in operating activities                    (2,640)    (2,002)      (641)
                                                                --------   --------   --------
Cash Flows from Investing Activities:
   Purchases of securities available for sale                    (49,118)        --         --
   Investment in subisidiaries                                   (30,000)   (27,623)   (39,309)
                                                                --------   --------   --------
         Net cash used in investing activities                   (79,118)   (27,623)   (39,309)
                                                                --------   --------   --------
Cash Flows from Financing Activities:
   Proceeds from exercise of stock options and stock warrants      2,028        571        178
   Proceeds from stock issuance, net                              85,063     14,955     25,507
   Repurchase of Treasury stock                                       --         --       (678)
                                                                --------   --------   --------
   Net cash provided by financing activities                      87,091     15,526     25,007
                                                                --------   --------   --------
Increase (decrease) in cash and cash equivalents                   5,333    (14,099)   (14,943)
Cash and Cash Equivalents, beginning of year                       7,185     21,284     36,227
                                                                --------   --------   --------
Cash and Cash Equivalents, end of year                          $ 12,518   $  7,185   $ 21,284
                                                                ========   ========   ========


NOTE 18. SEGMENT INFORMATION

The Company manages its core bank operations and prepares management reports
with a primary focus on each banking subsidiary. The operating segment
identified as "Other" includes Western Alliance Bancorporation and its non-bank
subsidiaries, Miller/Russell & Associates, Inc., and Premier Trust, Inc. These
non-bank operations are not significant relative to the entity as a whole, and
are therefore not disclosed separately. Non-interest income reflected for the
"Other" category relates to Western Alliance Bancorporation's income from
consolidated subsidiaries, and for 2005 and 2004 includes asset management fees
earned by the non-bank subsidiaries.

The accounting policies of the individual segments are the same as those of the
Company described in Note 1. Transactions between operating segments are
primarily conducted at fair value, resulting in profits that are eliminated for
reporting consolidated results of operations. The Company allocates centrally
provided services to the business segments based upon estimated usage of those
services.

The following is a summary of selected operating segment information as of and
for the years ended December 31, 2005, 2004 and 2003:


                                       84



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 18. SEGMENT INFORMATION (continued)



                                       BankWest    Alliance Bank   Torrey Pines              Intersegment   Consolidated
                                       of Nevada     of Arizona        Bank         Other    Eliminations      Company
                                      ----------   -------------   ------------   --------   ------------   ------------
                                                                                          
2005:
   Assets                             $1,886,742     $519,961        $405,011     $284,370    $(238,813)     $2,857,271
   Gross loans and deferred fees       1,083,599      404,644         305,094           --           --       1,793,337
   Less: Allowance for loan losses       (12,291)      (5,456)         (3,445)          --           --         (21,192)
                                      ----------     --------        --------     --------    ---------      ----------
   Net loans                           1,071,308      399,188         301,649           --           --       1,772,145
                                      ----------     --------        --------     --------    ---------      ----------
   Deposits                            1,606,750      457,177         335,292           --       (5,407)      2,393,812
   Stockholders' equity                  127,969       43,627          33,386      251,283     (212,042)        244,223
   Number of branch locations                  5            7               4           --           --              16
   Full-time equivalent employees            299          122              77           39           --             537
   Net interest income (loss)         $   70,004     $ 18,878        $ 14,646     $ (1,168)   $     (18)     $  102,342
   Provision for loan losses               2,692        2,040           1,447           --           --           6,179
                                      ----------     --------        --------     --------    ---------      ----------
   Net interest income (loss) after
      provision for loan losses           67,312       16,838          13,199       (1,168)         (18)         96,163
   Noninterest income                      5,335        1,359             738       36,377      (31,671)         12,138
   Noninterest expense                   (34,669)     (13,298)        (10,234)      (7,719)       1,056         (64,864)
                                      ----------     --------        --------     --------    ---------      ----------
   Income before income taxes             37,978        4,899           3,703       27,490      (30,633)         43,437
   Income tax expense (benefit)           12,636        1,874           1,497         (635)          --          15,372
                                      ----------     --------        --------     --------    ---------      ----------
   Net income                         $   25,342     $  3,025        $  2,206     $ 28,125    $ (30,633)     $   28,065
                                      ==========     ========        ========     ========    =========      ==========




                                       BankWest    Alliance Bank   Torrey Pines              Intersegment   Consolidated
                                       of Nevada     of Arizona        Bank         Other    Eliminations      Company
                                      ----------   -------------   ------------   --------   ------------   ------------
                                                                                          
2004:
   Assets                             $1,578,332     $332,805        $257,516     $173,748    $(165,552)     $2,176,849
   Gross loans and deferred fees         790,312      234,141         164,082           --           --       1,188,535
   Less: Allowance for loan losses        (9,857)      (3,416)         (1,998)          --           --         (15,271)
                                      ----------     --------        --------     --------    ---------      ----------
   Net loans                             780,455      230,725         162,084           --           --       1,173,264
                                      ----------     --------        --------     --------    ---------      ----------
   Deposits                            1,287,615      277,231         199,382           --       (8,192)      1,756,036
   Stockholders' equity                   91,361       31,189          26,405      140,634     (156,018)        133,571
   Number of branch locations                  5            5               3           --           --              13
   Full-time equivalent employees            260           79              56           29           --             424
   Net interest income (loss)         $   54,215     $ 10,225        $  8,141     $ (1,444)   $      (2)     $   71,135
   Provision for loan losses               1,417        1,657             840           --           --           3,914
                                      ----------     --------        --------     --------    ---------      ----------
   Net interest income (loss) after
      provision for loan losses           52,798        8,568           7,301       (1,444)          (2)         67,221
   Noninterest income                      4,851          774             604       25,149      (22,652)          8,726
   Noninterest expense                   (27,286)      (8,074)         (6,301)      (3,705)         437         (44,929)
                                      ----------     --------        --------     --------    ---------      ----------
   Income before income taxes             30,363        1,268           1,604       20,000      (22,217)         31,018
   Income tax expense (benefit)           10,033          422             584          (78)          --          10,961
                                      ----------     --------        --------     --------    ---------      ----------
   Net income                         $   20,330     $    846        $  1,020     $ 20,078    $ (22,217)     $   20,057
                                      ==========     ========        ========     ========    =========      ==========



                                       85



2005 ANNUAL REPORT

WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

NOTE 18. SEGMENT INFORMATION (continued)



                                       BankWest    Alliance Bank   Torrey Pines              Intersegment   Consolidated
                                       of Nevada     of Arizona        Bank         Other    Eliminations      Company
                                      ----------   -------------   ------------   --------   ------------   ------------
                                                                                          
2003:
   Assets                             $1,244,549     $187,314        $157,156     $130,953    $(143,199)     $1,576,773
   Gross loans and deferred fees         557,868      106,239          68,971           --           --         733,078
   Less: Allowance for loan losses        (8,460)      (1,759)         (1,159)          --           --         (11,378)
                                      ----------     --------        --------     --------    ---------      ----------
   Net loans                             549,408      104,480          67,812           --           --         721,700
                                      ----------     --------        --------     --------    ---------      ----------
   Deposits                              917,983      115,726          82,265           --      (21,328)      1,094,646
   Stockholders' equity                   69,114       17,117          18,394       98,353     (105,527)         97,451
   Number of branch locations                  5            3               2           --           --              10
   Full-time equivalent employees            207           60              37            7           --             311
   Net interest income (loss)         $   37,615     $  3,137        $  1,768     $ (1,494)   $      (1)     $   41,025
   Provision for loan losses               2,227        1,759           1,159           --           --           5,145
                                      ----------     --------        --------     --------    ---------      ----------
   Net interest income (loss) after
      provision for loan losses           35,388        1,378             609       (1,494)          (1)         35,880
   Noninterest income                      4,043          245             102       10,102      (10,222)          4,270
   Noninterest expense                   (20,016)      (4,319)         (2,645)        (430)         120         (27,290)
                                      ----------     --------        --------     --------    ---------      ----------
   Income (loss) before income
      taxes                               19,415       (2,696)         (1,934)       8,178      (10,103)         12,860
   Income tax expense (benefit)            6,352         (981)           (689)        (511)          --           4,171
                                      ----------     --------        --------     --------    ---------      ----------
   Net income (loss)                  $   13,063     $ (1,715)       $ (1,245)    $  8,689    $ (10,103)     $    8,689
                                      ==========     ========        ========     ========    =========      ==========


NOTE 19. QUARTERLY DATA (UNAUDITED)



                                                             Years Ended December 31,
                               ------------------------------------------------------------------------------------
                                                          2005                                       2004
                               -----------------------------------------   ----------------------------------------
                                Fourth      Third     Second      First     Fourth      Third     Second     First
                                Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter   Quarter
                               --------   --------   --------   --------   --------   --------   --------   -------
                                                                                    
Interest and dividend income   $ 38,975   $ 35,700   $ 31,812   $ 28,423   $ 27,075   $ 24,145   $ 20,758   $18,877
Interest expense                 10,360      8,369      7,430      6,409      5,936      5,148      4,458     4,178
                               --------   --------   --------   --------   --------   --------   --------   -------
Net interest income              28,615     27,331     24,382     22,014     21,139     18,997     16,300    14,699
Provision for loan losses         1,962      1,283      1,187      1,747        751      1,256        415     1,492
                               --------   --------   --------   --------   --------   --------   --------   -------
Net interest income, after
   provision for loan losses     26,653     26,048     23,195     20,267     20,388     17,741     15,885    13,207
Noninterest income                3,403      3,233      2,918      2,584      2,552      2,619      1,991     1,564
Noninterest expenses            (17,050)   (17,274)   (15,967)   (14,573    (12,873)   (11,740)   (10,624)   (9,692)
                               --------   --------   --------   --------   --------   --------   --------   -------
Income before income taxes       13,006     12,007     10,146      8,278     10,067      8,620      7,252     5,079
Income tax expense                4,564      4,258      3,593      2,957      3,638      3,071      2,602     1,650
                               --------   --------   --------   --------   --------   --------   --------   -------
Net income                     $  8,442   $  7,749   $  6,553   $  5,321   $  6,429   $  5,549   $  4,650   $ 3,429
                               ========   ========   ========   ========   ========   ========   ========   =======
Earnings per share:
   Basic                       $   0.37   $   0.34   $   0.35   $   0.29   $   0.35   $   0.33   $   0.28   $  0.21
                               ========   ========   ========   ========   ========   ========   ========   =======
   Diluted                     $   0.34   $   0.31   $   0.32   $   0.27   $   0.33   $   0.31   $   0.26   $  0.19
                               ========   ========   ========   ========   ========   ========   ========   =======



                                       86



WESTERN ALLIANCE BANCORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
2005, 2004 AND 2003

NOTE 20. INITIAL PUBLIC OFFERING

On June 29, 2005, the Company's registration statement on Form S-1 related to
the initial public offering of shares of the Company's common stock was declared
effective. The Company signed an underwriting agreement on June 29, 2005, which
was on a firm commitment basis, pursuant to which the underwriters agreed to
purchase 3,750,000 shares of common stock. On July 1, 2005, the principal
underwriter exercised the over-allotment to purchase an additional 450,000
shares of the Company's common stock.

The total price to the public for the shares offered and sold by the Company,
including the over-allotment, was $92.4 million. The amount of expenses incurred
by the Company in connection with the offering includes approximately $6.0
million of underwriting discounts and commission and offering expenses of
approximately $1.3 million.

NOTE 21. SUBSEQUENT EVENTS

On January 17, 2006, the Board of Directors approved and granted 132,500
nonqualified stock options and 116,250 shares of restricted stock to various
employees. The options have an exercise price of $29.00, vest over four years at
25% per year, and expire in 7 years, and the shares of restricted stock vest 50%
on the second anniversary of the grant date and 50% on the third anniversary of
the grant date. We estimate the total tax deductible compensation expense we
will incur in 2006 related to these stock options and shares of restricted stock
is $1.4 million.

On January 3, 2006, the Company announced a definitive agreement to acquire
Intermountain First Bancorp (Intermountain), the parent company of Nevada First
Bank. At December 31, 2005, Intermountain had approximately $459.4 million in
assets, $374.2 million in total loans, $395.5 million in deposits and $31.7
million in stockholders' equity. Under the terms of the agreement, Intermountain
shareholders may elect to receive either 2.44 shares of the Company's common
stock or $71.30 in cash for each Intermountain share, subject to proration and
allocation procedures to ensure that at least 60% of the outstanding shares of
Intermountain common stock will be exchanged for shares of the Company's common
stock. The total value of the transaction is estimated to be approximately $110
million.

On January 17, 2006, the Company announced a definitive agreement to acquire
Bank of Nevada. At December 31, 2005, Bank of Nevada had approximately $283.0
million in assets, $217.4 million in total loans, $254.4 million on deposits and
$25.6 million in stockholders' equity. Under the terms of the Agreement, Bank of
Nevada shareholders will receive $80.187 in cash for each share of Bank of
Nevada common stock. The total value of the transaction is estimated to be
approximately $74 million.


                                       87



WESTERN ALLIANCE BANCORPORATION

                                      (MAP)

STOCK LISTING
     Western Alliance Bancorporation is listed and trades on the New York Stock
     Exchange. Our trading symbol is WAL

STOCKHOLDERS
     12/31/05: 22,810,491 common shares outstanding.

FORM 10-K
     The Company will send the Western Alliance Bancorporation Form 10-K for
     2005 (including the financial statements filed with the Securities and
     Exchange Commission) without charge to any stockholder who asks for a copy
     in writing. Stockholders also can ask for copies of any exhibit to the Form
     10-K. The Company will charge a fee to cover expenses to prepare and send
     any exhibits. Please send requests to: Corporate Secretary, Western
     Alliance Bancorporation, 2700 W. Sahara Avenue, Las Vegas, Nevada 89102.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     McGladrey & Pullen, LLP
     300 S. 4th Street, Suite 600
     Las Vegas, Nevada 89101
     (702) 759-4100

STOCKHOLDER COMMUNICATIONS
     American Stock Transfer
     59 Maiden Lane, Plaza Level
     New York, New York 10038
     (800) 937-5449

CORPORATE INFORMATION ANNUAL STOCKHOLDERS' MEETING
     8:00 a.m., Tuesday, April 18, 2006
     The Ritz Carlton
     2401 E. Camelback Road
     Phoenix, Arizona 85016

     Proxy statement and form of proxy will be mailed to stockholders beginning
     on or about March 20, 2006.

CONTACT INFORMATION
     Western Alliance Bancorporation
     2700 W. Sahara Avenue
     Las Vegas, Nevada 89102
     (800) 764-7619

ONLINE
     westernalliancebancorp.com



                        (WESTERN ALLIANCE BANCORPORATION LOGO)

                        2700 West Sahara Avenue   www.westernalliancebancorp.com
                        Las Vegas, Nevada 89102   www.bankwestofnevada.com
                        (800) 764-7619            www.alliancebankofarizona.com
                                                  www.torreypinesbank.com
                                                  www.miller-russell.com
                                                  www.premiertrust.com

EX-14.1

EXHIBIT 14.1
WESTERN ALLIANCE BANCORPORATION
and its subsidiaries and affiliates
(collectively, the “Corporation”)

CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

     This Code of Business Conduct and Ethics covers a wide range of business practices and procedures and serves as a guide to ethical decision-making. The Corporation is committed to uncompromising integrity in all that we do and how we relate to each other and to persons outside of the Corporation. This Code does not cover every issue that may arise, but it sets out basic policies to guide all directors, officers and employees of the Corporation and its subsidiaries and affiliates in their business conduct and ethical decision-making. In particular, this Code covers policies designed to deter wrongdoing and to promote (1) honest and ethical conduct, (2) avoidance of conflicts of interests, (3) full, fair, accurate, timely, and understandable disclosure, and (4) compliance with applicable governmental laws, rules and regulations. All directors, officers and employees must conduct themselves in accordance with these policies and seek to avoid even the appearance of improper behavior. The Corporation’s directors, officers and employees should also direct themselves to the Corporation’s human resources materials and bribery policy, as well as employee manuals of our various subsidiaries for further guidance and discussion of many of the topics addressed herein. The Corporation’s agents and representatives, including consultants, should also be provided with a copy of this Code.

     This Code is not an expressed or implied contract of employment and does not create any contractual rights of any kind between the Corporation and its employees. In addition, all employees should understand that the Code does not modify their employment relationship, whether at will or governed by contract.

     If a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or policy conflicts with this Code, you must comply with the Code. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.

     Each director, officer and employee will be held accountable for his/her adherence to this Code. For the purpose of complying with this Code, officers and employees are hereinafter referred to as “employees.” Those who violate the policies in this Code will be subject to disciplinary action, up to and including discharge from the Corporation and, where appropriate, civil liability and criminal prosecution. If you are in a situation that you believe may violate or lead to a violation of this Code, you must report the situation as described in Sections 16 and 17 of this Code.

1. Compliance with Laws, Rules and Regulations

     Obeying the law, both in letter and in spirit, is one of the foundations on which the Corporation’s ethical policies are built. All directors, officers and employees must respect and obey all applicable governmental laws, rules and regulations (including insider trading laws). Although not all directors, officers and employees are expected to know the details of these laws, rules and regulations, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

     The Corporation holds information and training sessions to promote compliance with laws, rules and regulations, including insider trading laws.

2. Honest and Ethical Conduct

     Each director, officer and employee must always conduct him/herself in an honest and ethical manner. Each director, officer and employee must act with the highest standards of personal and professional integrity and not tolerate others who attempt to deceive or evade responsibility for actions. All actual or apparent conflicts of interest between personal and professional relationships must be handled honestly, ethically and in accordance with the policies specified in this Code.

3. Conflicts of Interest

     A “conflict of interest” occurs when a person’s private interest interferes in any way (or even appears to interfere) with the interests of the Corporation as a whole. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Corporation work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or a member of his or her family, receives improper personal benefits as a result of his or her position at the Corporation. Loans to, other than those made in the ordinary course of business, or guarantees of obligations of, employees or directors or their family members may also create a conflict of interest.

     It is almost always a conflict of interest for an employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for, or serve as a consultant to, a competitor, customer or supplier.

     The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf. If asked to serve as a director of another corporation or governmental agency, you must seek advance approval from the Chief Administrative Officer. Situations may arise where relationships with family members and friends create conflicts of interest. Generally, employees are prohibited from being in the position of supervising, reviewing or having any influence on the job evaluation or salary of their close relatives. Directors and employees who have family members or friends that work for businesses seeking to provide goods or services to the Corporation may not use their personal influence to affect negotiations. Employees who have relatives or friends that work for competitors, and where such relationships might result in a conflict of interest, should bring this fact to the attention of their immediate supervisors.

     Conflicts of interest are prohibited as a matter of Corporation policy, except under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with your supervisor, manager or other appropriate personnel or the Human Resources Department. Any employee or director who becomes aware of a conflict or potential conflict, or knows of any material transaction or relationship that reasonably could be expected to give rise to such a conflict, should promptly bring it to the attention of a supervisor, manager or other appropriate personnel who is not involved in the matter giving rise to such conflict, or potential conflict or consult the procedures described in Sections 16 and 17 of this Code.

4. Insider Trading

     Employees, officers and directors who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All non-public information about the Corporation should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal. If you have any questions, please consult or the Senior Compliance Officer.

5. Personal Finances

     Employees should manage their personal financial affairs so as not to reflect negatively on the Corporation. Employees are encouraged to meet their financial obligations on time and to maintain a good credit rating. Employees may not borrow from nor lend personal funds to other employees, customers or suppliers.

6. Corporate Opportunities

     Employees and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position. No employee or director may use corporate property, information, or position for personal gain, and no employee or director may compete with the Corporation directly or indirectly. Employees and directors owe a duty to the Corporation to advance its legitimate interests when the opportunity to do so arises.

7. Competition and Fair Dealing

     We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each employee and director should endeavor to respect the rights of, and to deal fairly with, the Corporation’s customers, suppliers, competitors and employees. No employee or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair dealing practice.

     The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any Corporation director or employee, family member of a director or employee or agent unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. There are also special rules relating to gifts applicable to certain employees of our broker-dealer subsidiary, which are discussed in detail in the compliance manuals of such subsidiary. Please discuss with your supervisor any gifts or proposed gifts which you are not certain are appropriate.

8. Discrimination and Harassment

     The diversity of the Corporation’s employees is a tremendous asset. We are firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

9. Health and Safety

     The Corporation strives to provide each employee with a safe and healthful work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions. Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. Te use of illegal drugs in the workplace will not be tolerated.

10. Record-Keeping

The Corporation requires honest and accurate recording and reporting of information in order to make responsible business decisions.

     Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether reimbursement for a certain expense is permissible, ask your supervisor or the Finance Department.

     Rules and guidelines are available from the Finance Department. All of the Corporation’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Corporation’s transactions and must conform both to applicable legal requirements and to the Corporation’s system of internal controls.

     All employees are responsible to report to the Corporation any questionable accounting or auditing matters that may come to their attention. Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Records should always be retained or destroyed according to the Corporation’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult the Risk Management Officer.

11. Confidentiality

     Employees and directors must maintain the confidentiality of confidential information entrusted to them by the Corporation or its customers, except when the Corporation’s legal counsel authorizes

disclosure or such disclosure is required by law. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Corporation or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment with the Corporation ends.

12. Protection and Proper Use of Corporation Assets

     All employees and directors should protect the Corporation’s assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Corporation’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. All of the Corporation assets should be used for legitimate business purposes and should not be used for non-Corporation business, though incidental personal use may be permitted with the permission of your supervisor.

     The obligation of employees and directors to protect the Corporation’s assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and product ideas, designs, databases, records, customer lists, customer trade data, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Corporation policy. It could also be illegal and result in civil or even criminal penalties.

13. Payments to Government Personnel

     The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

     In addition, the U.S. government has a number of laws and regulations regarding business gratuities which may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Corporation policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.

14. Rules for Principal Executive Officer and Senior Financial Officers

     In addition to complying with all other parts of this Code, if you are the Corporation’s principal executive officer, principal financial officer, principal accounting officer or controller, or any person performing similar functions (each referred to in this Code as a “Principal Officer”), you must take the following steps to ensure full, fair, accurate, timely and understandable disclosure in reports and documents that the Corporation files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Corporation:

(a) carefully review drafts of reports and documents the Corporation is required to file with the SEC before they are filed and Corporation press releases or other public communications before they are released to the public, with particular focus on disclosures each Principal Officer does not understand or agree with and on information known to the Principal Officer that is not reflected in the report, document, press release or public communication;

(b) meet with members of senior management, division heads, accounting staff and others involved in the disclosure process to discuss their comments on the draft report, document, press release or public communication;

(c) establish and maintain disclosure controls and procedures that ensure that material information is included in each report, document, press release or public communication in a timely fashion;

(d) consult with the Audit Committee on a regular basis to determine whether it has identified any weaknesses or concerns with respect to internal controls;

(e) when relevant, confirm that neither the Corporation’s internal auditors nor its outside accountants are aware of any material misstatements or omissions in the draft report or document, or have any concerns about the “Management’s Discussion and Analysis of Financial Condition” section of a report or document; and

(f) bring to the attention of the Audit Committee matters that you feel could compromise the integrity of the Corporation’s financial reports, disagreements on accounting matters and violations of any part of this Code.

15. Waivers of or Changes in the Code of Business Conduct and Ethics

     Any waiver of this Code for or changes to this Code that apply to executive officers, including Principal Officers, or directors may be made only by the Corporation’s Board or a Board committee and will be promptly disclosed to the Corporation’s shareholders and otherwise as required by law, regulation or rule of the SEC or of the New York Stock Exchange.

16. Reporting any Illegal or Unethical Behavior

     Employees are encouraged to talk promptly to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and any violations of law, rules, regulations or this Code, and otherwise when in doubt about the best course of action in a particular situation. The supervisor, manager or other appropriate personnel to whom such matters are reported should not be involved in the reported illegal or unethical behavior or violation of law, rules, regulations or this Code. Any supervisor or manager who receives a report of violation or potential violation of this Code must report it immediately to the designated Human Resources representative. It is the policy of the Corporation not to allow retaliation for reports of misconduct by others made in good faith by employees.

     Employees are expected to cooperate in internal investigations of misconduct. Any person involved in an investigation of possible misconduct in any capacity must not discuss or disclose any information to anyone outside of the investigation unless required by law or when seeking his or her own legal advice.

     Any use of these reporting procedures in bad faith or in a false or frivolous manner will be considered a violation of this Code.

17. Compliance Standards and Procedures

     We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know right from wrong. Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are some steps to keep in mind:

· Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.

· Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.

· Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.

· Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems.

· Seek help from Corporation resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it with the Corporation’s Chief Administrative Officer.

· Your report of violations of this Code may be made in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Corporation does not permit retaliation of any kind against employees for good faith reports of violations of this Code or

questionable accounting or auditing matters. “Good faith” does not mean that you have to be right — but it does mean that you believe that you are providing truthful information. The important thing is that you bring your question or concern to our attention through one of the available channels. · Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.

18. Administration

     Board of Directors. The Board of Directors, through the Audit Committee, will help ensure that this Code is properly administered. The Audit Committee will be responsible for the annual review of the compliance procedures in place to implement this Code and will recommend clarifications or necessary changes to this Code to the full Board for approval.

     Officers, Managers and Supervisors. All officers, managers and supervisors are responsible for reviewing this Code with their employees. Officers, managers and supervisors are also responsible for the diligent review of practices and procedures in place to help ensure compliance with this Code.

19. Complaints on Accounting and Audit Matters

     The Corporation has established a confidential procedure for employees to file complaints regarding accounting and auditing matters, in the rare cases that it would not be appropriate to discuss their concerns directly with their supervisors, managers, the Corporation’s internal auditor or the Corporation’s outside accountants. All such communications from employees should be addressed to:

     EthicsPoint at www.ethicspoint.com or 866-297-0224

     The Audit Committee chairperson is the only individual with access to information provided to EthicsPoint. Any other complaints regarding accounting, internal accounting controls or auditing matters also should be communicated to the Audit Committee chairperson. The Audit Committee chairperson will report regularly to the Audit Committee on complaints received and the results of any investigations.

20. Stockholder Communications with the Board of Directors

     The Board of Directors has established a process for stockholders to communicate with the Board. Any stockholder who wishes to communicate with the Board should be addressed to:

Chief Financial Officer, 2700 W. Sahara, Las Vegas, NV 89102

21. Where to Turn for Advice

     Employees who have questions about this Code of Business Conduct and Ethics should turn to their immediate supervisors in the first instance and then to a Human Resources representative or the Chief Administrative Officer. The Corporation’s “open door” policy gives employees the freedom to approach any member of management with ethical questions or concerns without fear of retaliation.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement (No. 333-127032) on Form S-8 of Western Alliance Bancorporation of our report dated February 10, 2006 relating to our audit of the consolidated financial statements included in the Annual Report to shareholders, which is incorporated in this Annual Report on Form 10-K of Western Alliance Bancorporation for the year ended December 31, 2005.

McGLADREY & PULLEN, LLP

Las Vegas, Nevada
March 17, 2006

EX-31.1

EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert Sarver, certify that:

1. I have reviewed this annual report on Form 10-K of Western Alliance Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

			/s/Robert Sarver
			Robert Sarver
		Chief Executive Officer
Date: March 17, 2006	Western Alliance Bancorporation

EX-31.2

EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dale Gibbons, certify that:

1. I have reviewed this annual report on Form 10-K of Western Alliance Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

			/s/ Dale Gibbons
			Dale Gibbons
		Chief Financial Officer
Date: March 17, 2006	Western Alliance Bancorporation

EX-32

EXHIBIT 32
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

This certification is given by the undersigned Chief Executive Officer and Chief Financial Officer of Western Alliance Bancorporation (“the Registrant”) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Each of the undersigned hereby certifies, with respect to the Registrant’s annual report of Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission of the date hereof (the “Report”), that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert Sarver Robert Sarver	/s/ Dale Gibbons Dale Gibbons
Chief Executive Officer	Chief Financial Officer
Western Alliance Bancorporation	Western Alliance Bancorporation

Date: March 17, 2006