Western Alliance Bancorp. in Phoenix is the latest regional bank to disclose an issue tied to alleged borrower fraud.
The company disclosed in a regulatory filing that it has a note finance revolving credit facility to Cantor Group V LLC secured by pledged commercial real estate loans and cash proceeds. In August, Western Alliance filed a lawsuit alleging fraud by the borrower, claiming it failed to provide collateral loans in first position.
“We have evaluated the existing collateral and believe it covers the obligation, based on ‘as-is’ appraisals,” the filing said. “The bank has a limited guaranty and full guaranty from two ultra-high net worth individuals under certain circumstances, such as fraud.”
Western Alliance, which said it made the disclosure “in response to investor inquiries about a recent peer bank 8-K filing,” noted that its total criticized assets are lower than they were at mid-year. The company also affirmed its guidance and 2025 outlook.