Western Alliance Bancorp. said its planned sale of at least 7 million shares were priced at an 8.5% discount to Wednesday's close.

The company is raising capital for its banking units, which are located in the hard-hit real-estate locales of Nevada, Arizona and California.

Shares were up 3.5% premarket at $7.07 even though the offering, priced at $6.25, will boost the stock count some 10%. The stock had surged 81% this year through Wednesday.

Western Alliance last month reported it swung to a second-quarter profit as interest income grew and its provision for credit losses fell. Chairman and Chief Executive Robert Sarver said then as Western Alliance increased its local market share and improved asset quality, nearly all its business and financial metrics posted considerable improvement.

However, he warned the company was expecting volatility in the near term because of the fitful pace of recovery in each region.

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