Western Alliance Bancorporation (WAL) was cut to Neutral from Overweight at J.P. Morgan on an upside risk to ECR (earnings credit rate) deposit costs. "For 2026, although the newly provided outlook for 2026 ECR deposit costs calls for a range of $535M-$585M, we ...

New CFO Vishal Idnani said 2025 results included record net interest income of $2.9 billion, net revenue of $3.5 billion, and PP&R of $1.4 billion. Net income available to common shareholders was $956 million and EPS was $8.73. Idnani noted that net revenue and PP&R rose 12% and 26%, respectively, from the prior year. Non-interest income increased 25%, driven primarily by commercial banking and disbursement fees, while mortgage banking was “essentially flat” versus expectations. Non-interest expense growth ...

Western Alliance Bancorporation (NYSE:WAL) Q4 2025 Earnings call January 27, 2026 12:00 PM ET Company ParticipantsDale Gibbons - Vice Chairman and CFOKen Vecchione - President and CEOMiles Pondelik - Director of Investor Relations and Corporate DevelopmentTim Bruckner - Chief Banking OfficerVishal Idnani - CFOConference Call ParticipantsAndrew Terrell - AnalystAnthony Elian - AnalystBernard Von Gizycki - AnalystCasey Haire - AnalystChris McGratty - AnalystDavid Chiaverini - AnalystDavid Smith - AnalystEbrah ...

Western Alliance Bancorporation (NYSE:WAL) Q4 2025 Earnings call January 27, 2026 12:00 PM ET Company ParticipantsDale Gibbons - Vice Chairman and CFOKen Vecchione - President and CEOMiles Pondelik - Director of Investor Relations and Corporate DevelopmentTim Bruckner - Chief Banking OfficerVishal Idnani - CFOConference Call ParticipantsAndrew Terrell - AnalystAnthony Elian - AnalystBernard Von Gizycki - AnalystCasey Haire - AnalystChris McGratty - AnalystDavid Chiaverini - AnalystDavid Smith - AnalystEbrah ...

Financial Data and Key Metrics Changes - In Q4 2025, EPS was $2.59, up 33% year-over-year, with a return on average assets of 1.23% and return on average tangible common equity at 16.9% [4] - For the full year, net interest income reached a record $2.9 billion, net revenue was $3.5 billion, and pre-provision net revenue was $1.4 billion, with net revenue and pre-provision net revenue increasing 12% and 26% respectively from the prior year [8] - Non-interest income rose 25%, primarily driven by stronger commercial banking and disbursement fees, while non-interest expense growth slowed to 4% [8][9] Business Line Data and Key Metrics Changes - HFI loan growth for the full year was $5 billion, or 9%, with regional banking and specialized C&I verticals contributing significantly [4][10] - In Q4, mortgage banking revenues only declined by $5 million compared to the prior quarter, indicating stability despite seasonal trends [5] - The Juris Banking team completed over 17 million digital payments related to a major settlement, showcasing the effectiveness of the disbursement platform [5] Market Data and Key Metrics Changes - Total deposits increased by $10.8 billion, or 16%, driven by strong inflows in regional banking and a 40% growth in specialty escrow businesses [4][10] - Regional Banking deposits grew by $1.4 billion in Q4, with notable contributions from Innovation Banking and Specialty Escrow Services [12] - The mix of ECR deposits is expected to remain consistent, with around 37% of total deposits being ECR on an average basis [33] Company Strategy and Development Direction - The company aims to cross $100 billion in assets by year-end 2026 while maintaining a stable expense structure [6] - There is a focus on organic growth opportunities, with expectations of $6 billion in loan growth and $8 billion in deposit growth for 2026 [19][20] - The company is emphasizing the growth of lower-cost deposit channels and higher-yielding C&I loans to enhance net interest margin [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong earnings momentum for 2026, supported by a pro-growth regulatory environment and improving visibility on rate normalization [19] - The outlook for net interest income growth is projected at 11%-14%, assuming two rate cuts during the year [20] - Asset quality remains stable, with expectations for net charge-offs to be between 25 and 35 basis points as non-accrual balances are proactively reduced [21] Other Important Information - The company issued $400 million of subordinated debt to bolster its capital ratio, and tangible book value per share rose 17% year-over-year to $61.29 [11][17] - The efficiency ratio improved, with a Q4 efficiency ratio of 55.7% and an adjusted efficiency ratio of 46.5% [14] - The company has been a leader in creating shareholder value, with EPS growth and tangible book value accumulation ranking in the top quartile relative to peers over the last decade [18] Q&A Session Summary Question: Balance sheet growth guidance - Management indicated that the projected loan growth of $6 billion and deposit growth of $8 billion is leading the peer group and reflects organic growth [23] Question: Charge-off expectations - Charge-offs are expected to be higher in the first half of the year as the company works through non-accrual loans, with a normalization expected in the latter half [25] Question: Non-interest income sustainability - The strength in non-interest income is driven by treasury management and digital disbursements, with expectations for continued growth in these areas [27] Question: ECR deposit expectations - ECR deposits are expected to maintain a consistent mix, with a beta of 65%-70% on ECR deposits, and efforts are being made to shift towards lower-cost deposits [33][34]

EARNINGS CALL 4th Quarter 2025 January 27, 2026 Forward-Looking Statements This presentation contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding our expectations with regard to our business, financial and operating results, including our deposits, liquid ...

Shares of Western Alliance Bancorporation ( WAL ) have been a poor performer over the past year, losing 7% and missing out on a market rally. While the company has generated strong deposit growth, investors have been cautious about potential credit losses, given its fairly lightOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a ...

Core Insights - Western Alliance Bancorporation reported strong financial results for Q4 and full year 2025, with record net interest income, revenues, and pre-provision net revenue (PPNR) [1][2] - The company achieved a net income of $293.2 million for Q4 2025, a 12.6% increase from Q3 2025, and a 32.8% increase year-over-year [1][2] - Full year net income reached $990.6 million, up 25.8% from the previous year, with earnings per share increasing by 23.1% to $8.73 [1][2] Financial Highlights - Q4 2025 net income was $293.2 million, with earnings per share of $2.59, compared to $260.5 million and $2.28 in Q3 2025 [1][2] - Full year net revenue was $3.5 billion, a 12.0% increase from the previous year, while non-interest expenses rose by 4.3% [1][2] - The efficiency ratio for Q4 2025 was 55.7%, improved from 58.9% in Q4 2024 [1][2] Loan and Deposit Growth - HFI loans increased by $2.0 billion in Q4 2025, totaling $58.7 billion, with a loan-to-deposit ratio of 76.0% [1][3] - Total deposits were $77.2 billion, a decrease of $88 million from Q3 2025, but an increase of $10.8 billion year-over-year [1][3] - The company reported impressive quarterly loan growth, contributing to a total asset increase to approximately $93 billion [1][2] Asset Quality - Nonperforming loans to funded HFI loans decreased to 0.85% in Q4 2025 from 0.92% in Q3 2025 [1][3] - The provision for credit losses was $73.0 million for Q4 2025, down from $80.0 million in Q3 2025 [2][3] - Criticized loans decreased by $15 million during the quarter, totaling $1.3 billion [4] Capital Position - Total equity increased to $7.9 billion at December 31, 2025, up from $7.7 billion at September 30, 2025 [3][4] - The common equity tier 1 capital ratio was 11.0% at December 31, 2025, compared to 11.3% at September 30, 2025 [3][4] - Tangible book value per share rose to $61.29, a 17.3% increase year-over-year [1][3] Performance Metrics - The net interest margin for Q4 2025 was 3.51%, slightly down from 3.53% in Q3 2025 [2][3] - Return on average assets was 1.23% for Q4 2025, compared to 1.12% in Q4 2024 [1][2] - The company repurchased 0.7 million shares for $57.5 million during Q4 2025 [3][4]

Financial Performance - Net income for Q4 2025 was $293.2 million, up 12.6% from $260.5 million in Q3 2025, and up 35.2% from $216.9 million in Q4 2024[10] - Earnings per share for Q4 2025 reached $2.59, a 13.6% increase from $2.28 in Q3 2025 and a 32.8% increase from $1.95 in Q4 2024[10] - Net income for the year ended December 31, 2025, was $990.6 million, a 25.8% increase from $787.7 million in 2024[34] - Net income attributable to Western Alliance was $286.1 million in Q4 2025, compared to $253.4 million in Q3 2025, reflecting a 12.5% increase[40] Revenue and Income - Pre-provision net revenue (PPNR) for Q4 2025 was $428.7 million, up 8.9% from $393.8 million in Q3 2025 and up 33.2% from $319.4 million in Q4 2024[11] - Non-interest income for Q4 2025 was $214.7 million, an increase of 14.3% from $187.8 million in Q3 2025 and up 24.9% from $171.9 million in Q4 2024[7] - Interest income for Q4 2025 reached $1,217.4 million, a 6.9% increase from $1,138.6 million in Q4 2024[34] - Net interest income after provision for credit losses was $693.2 million for Q4 2025, up 14.3% from $606.5 million in Q4 2024[34] Asset and Deposit Management - Total deposits decreased by $88 million to $77.2 billion in Q4 2025, while total deposits increased by $10.8 billion, or 16.3%, year-over-year[2] - Total assets rose by $1.8 billion, or 2.0%, to $92.8 billion at December 31, 2025, compared to $91.0 billion at September 30, 2025, and increased 14.6% from $80.9 billion at December 31, 2024[21] - Total deposits amounted to $77.2 billion as of December 31, 2025, reflecting a decrease of $88 million from the previous quarter but an increase of $10.8 billion from $66.3 billion at December 31, 2024[15] Loan Performance - HFI loans totaled $58.7 billion in Q4 2025, an increase of $2.0 billion, or 3.6%, from Q3 2025, and up $5.0 billion, or 9.3%, year-over-year[13] - The ratio of HFI loans to deposits was 76.0% at December 31, 2025, up from 73.3% at September 30, 2025, but down from 80.9% at December 31, 2024[16] - Nonaccrual loans decreased by $22 million to $500 million during the quarter, but increased by $24 million from December 31, 2024[23] Efficiency and Ratios - The efficiency ratio, adjusted for deposit costs, improved to 46.5% in Q4 2025 from 47.8% in Q3 2025 and 51.1% in Q4 2024[9] - The common equity tier 1 capital ratio was 11.0% at December 31, 2025, down from 11.3% at September 30, 2025, and December 31, 2024[20] - The tangible common equity ratio improved to 7.3% as of December 31, 2025, compared to 7.2% in the previous year[37] Credit Losses and Provisions - The company recorded a provision for credit losses of $73.0 million in Q4 2025, a decrease from $80.0 million in Q3 2025 but an increase from $60.0 million in Q4 2024[5] - The provision for credit losses increased by 21.7% to $73.0 million in Q4 2025, up from $60.0 million in Q4 2024[34] - Total allowance for credit losses on loans reached $510.2 million, compared to $482.7 million in the previous quarter[42] Equity and Capital - Total equity increased by $256 million, or 3.3%, to $7.9 billion in Q4 2025, with a year-over-year increase of $1.2 billion, or 18.5%[2] - Total tangible common equity increased to $6,709 million as of December 31, 2025, up from $6,451 million in September 2025, representing a growth of 4.0%[57] - Tangible book value per share was $61.29 at December 31, 2025, an increase of 4.7% from $58.56 at September 30, 2025, and 17.3% from $52.27 at December 31, 2024[20] Other Financial Metrics - The average cost of interest-bearing liabilities decreased to 3.34% in 2025 from 3.90% in 2024, reflecting a reduction in funding costs[52] - Total non-interest expense increased to $552.2 million in Q4 2025, compared to $544.4 million in Q3 2025[40] - Loans charged-off totaled $48.3 million for the quarter ended December 31, 2025, an increase from $31.8 million in the prior quarter[42]

Looking back on the first quarter, we are pleased with our execution that delivered financial results in line with expectations as we continue to prudently grow the balance sheet and maintain asset quality. Western Alliance's balance sheet growth supported solid pre-provision net revenue of $278 million, which equates to a $31 million or 12% year-over-year increase. Driving this increase was net interest income, which grew $52 million year-over-year or 9%. Net interest income, inclusive of deposit costs, al ...