The market expects Western Alliance (WAL) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 17, might help the stock move higher if these key numbers are bette ...

Financial Performance - Net income for the three months ended March 31, 2025, was $199.1 million, compared to $177.4 million for the same period in 2024, reflecting an increase of 12.8%[13] - Earnings per share (EPS) for Q1 2025 was $1.80, up from $1.61 in Q1 2024, indicating a year-over-year growth of 11.8%[13] - Comprehensive income attributable to controlling interest for Q1 2025 was $254.3 million, compared to $132.7 million in Q1 2024, reflecting a substantial increase of 91.8%[15] - Net income for the three months ended March 31, 2025, was $199.1 million, an increase from $177.4 million in the same period of 2024, representing a growth of 11.0%[21] - Revenue from contracts with customers for the three months ended March 31, 2025, was $23.0 million, up from $13.5 million in the same period of 2024[208] Asset and Liability Management - Total assets increased to $83,043 million as of March 31, 2025, up from $80,934 million at December 31, 2024, representing a growth of 2.75%[11] - The company’s total liabilities were reported at $75,828 million as of March 31, 2025[204] - Total deposits increased to $69,322 million as of March 31, 2025, compared to $66,341 million at December 31, 2024, representing a growth of 4.5%[11] - The allowance for credit losses was $389 million as of March 31, 2025, compared to $374 million at December 31, 2024, an increase of 4.0%[11] Income and Expense Analysis - Total interest income rose to $1,095.6 million in Q1 2025, compared to $1,055.0 million in Q1 2024, marking an increase of 3.8%[13] - Non-interest income totaled $127.4 million in Q1 2025, slightly down from $129.9 million in Q1 2024, a decrease of 1.9%[13] - Total non-interest expense for Q1 2025 was $500.4 million, up from $481.8 million in Q1 2024, indicating an increase of 3.3%[13] - The company’s interest expense for the same period was $445.0 million, leading to a net interest income after provision for credit losses of $619.4 million[204] Credit Quality and Loss Provisions - Provision for credit losses increased to $31.2 million in Q1 2025, up from $15.2 million in Q1 2024, reflecting a significant rise of 105.3%[13] - The total allowance for credit losses (ACL) on loans held for investment (HFI) increased from $373.8 million as of December 31, 2024, to $388.6 million as of March 31, 2025, reflecting a net increase of $14.8 million[83] - The provision for credit losses for the three months ended March 31, 2025, was $40.6 million, compared to $13.4 million for the same period in 2024, indicating a significant increase in provisions[85] Loan Portfolio and Performance - Total loans held for sale (HFS) increased to $3,238 million, up from $2,286 million as of December 31, 2024, representing a growth of approximately 42%[63] - The total loans held for investment (HFI) as of March 31, 2025, amounted to $54,761 million, an increase from $53,676 million as of December 31, 2024, reflecting a growth of approximately 2%[66] - Total loans as of March 31, 2025, amounted to $54.761 billion, with past due loans totaling $662 million[71] - Nonaccrual loans totaled $451 million as of March 31, 2025, with $319 million classified as past due 90 days or more and still accruing[67] Securities and Investments - The Company reported significant unrealized losses in available-for-sale debt securities, totaling $671 million as of March 31, 2025[46] - The Company reported a total of $1,536 million in held-to-maturity securities with a fair value of $1,359 million as of March 31, 2025, reflecting unrealized losses of $178 million[44] - The fair value of available-for-sale (AFS) debt securities was reported at $14,231 million as of March 31, 2025, with $4,046 million from quoted prices in active markets and $10,185 million from significant observable inputs[177] Capital Management - The company issued $1,200.0 million in long-term debt during Q1 2025, compared to no issuances in Q1 2024[22] - The company paid cash dividends of $45.0 million on common and preferred stock in Q1 2025, slightly up from $43.9 million in Q1 2024[22] - The Company declared and paid a quarterly cash dividend of $0.38 per share, totaling $41.8 million for the three months ended March 31, 2025, compared to $40.7 million in the same period of 2024[127] Tax and Regulatory Matters - The effective tax rate for the three months ended March 31, 2025, was 19.2%, down from 23.5% in the same period of 2024[152] - The net deferred tax asset (DTA) balance as of March 31, 2025, was $272 million, a decrease of $9 million from $281 million at December 31, 2024[153] Derivatives and Risk Management - The net loss on derivatives for the three months ended March 31, 2025, was $37.1 million, compared to a net gain of $7.1 million for the same period in 2024[149] - The Company utilized interest rate swaps to manage interest rate risk, converting fixed rates to variable rates and vice versa[133] - The Company had a notional amount of $28.268 billion in forward contracts as of March 31, 2025, with a fair value of $21 million[146]

Financial Data and Key Metrics Changes - Western Alliance Bancorporation reported a pre-provision net revenue of $278 million, reflecting a year-over-year increase of $31 million or 12% [10] - Net interest income grew by $52 million year-over-year, representing a 9% increase, totaling $651 million [13][20] - The net interest margin remained stable at 3.47%, with a slight decline of 1 basis point from the previous quarter [11][20] - Total equity increased by $508 million, including $293 million from the issuance of REIT preferred equity [24] Business Line Data and Key Metrics Changes - Noninterest income remained stable year-over-year at $127 million, with mortgage loan production volume increasing by 25% annually [15] - Commercial and Industrial (C&I) loans drove most of the growth, now accounting for 44% of the held-for-investment loan portfolio, up from 39% a year ago [25] - Residential loans decreased by $63 million, now making up 26% of the portfolio compared to 29% previously [25] Market Data and Key Metrics Changes - The balance sheet expanded by $2.1 billion from year-end to $83 billion in total assets, driven by held-for-investment loan and deposit growth of $1.1 billion and $3 billion, respectively [23] - Deposits grew by $3 billion in Q1, primarily in noninterest-bearing accounts [27] Company Strategy and Development Direction - The company aims for $5 billion in loan growth and $8 billion in deposit growth for the full year, with healthy client engagement [41] - The focus remains on maintaining a strong capital position with a CET1 ratio above 11% [42] - The company emphasizes its diversified business model to navigate economic cycles effectively [8][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality stability, with full-year net charge-offs expected to hover around 20 basis points [44] - The company anticipates two rate cuts before the end of 2025, which will impact net interest income and margin positively [43][75] - Management is mindful of recent rate volatility affecting consumer behavior but expects noninterest income to follow the trajectory of net interest income [53] Other Important Information - The company has significantly increased its capital and liquidity over the past two years to prepare for potential market fluctuations [9] - The Corporate Trust business saw deposits grow by $270 million, now exceeding $800 million in total deposits [150] Q&A Session Summary Question: Concerns about the adequacy of the allowance for credit losses (ACL) - Management reassured that the reserve is adequate and based on a rigorous methodology, with no expected charge to increase reserves [49][50] Question: Guidance for 2025 and fee income expectations - Management expects fee income to rise in the second half of the year, supported by seasonal increases in mortgage income [52] Question: Insights on C&I growth dynamics - Management noted strong momentum in loan pipelines, expecting Q2 loan growth to surpass Q1 [56] Question: Capital raise structure and future capital moves - The capital raise aimed to enhance the Tier 1 leverage ratio, with management satisfied with the current levels [58][59] Question: Increase in service charges and deposit insurance costs - Management attributed the increase in service charges to improved treasury management services and outreach to clients [67] Question: Outlook on net interest income and margin trajectory - Management anticipates sequential growth in net interest income, with gradual increases in net interest margin throughout the year [74][75] Question: Loan yield dynamics and pricing pressures - Management acknowledged pricing pressures in the market but expects loan yields to increase in Q2 despite anticipated rate cuts [112][113] Question: Corporate Trust business traction post-rating upgrades - Management highlighted the positive impact of recent rating upgrades on confidence and growth in the Corporate Trust business [148][151]

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, future economic performance and dividends, including our statements on the sli ...

Group 1 - Western Alliance (NYSE: WAL) shares have experienced a challenging 2025, declining approximately 35% from their peak, although they remain higher than a year ago [1] - The company reported mixed earnings results after the market closed on Monday, leading to shares trading slightly [1]

Core Insights - Western Alliance (WAL) reported revenue of $788.2 million for the quarter ended March 2025, reflecting a 6.7% increase year-over-year, while EPS rose to $1.79 from $1.72 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $794.4 million, resulting in a surprise of -0.78%, whereas the EPS exceeded the consensus estimate of $1.78 by +0.56% [1] Financial Performance Metrics - Efficiency Ratio stood at 63.5%, higher than the three-analyst average estimate of 60.3% [4] - Net Interest Margin was reported at 3.5%, surpassing the three-analyst average estimate of 3.2% [4] - Average Balance of Total Interest Earning Assets was $77.18 billion, slightly below the two-analyst average estimate of $77.62 billion [4] - Net charge-offs to average loans (annualized) were 0.2%, better than the 0.3% estimated by two analysts [4] - Total Non-Interest Income reached $127.40 million, lower than the three-analyst average estimate of $134.90 million [4] - Net Interest Income was reported at $650.60 million, compared to the two-analyst average estimate of $660.53 million [4] - Service Charges and Fees amounted to $37.20 million, exceeding the two-analyst average estimate of $31.20 million [4] - Net Gain on Loan Origination and Sale Activities was $49.50 million, compared to the $51.51 million average estimate based on two analysts [4] Stock Performance - Shares of Western Alliance have declined by -14.4% over the past month, in contrast to the Zacks S&P 500 composite's decline of -5.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Western Alliance (WAL) reported quarterly earnings of $1.79 per share, exceeding the Zacks Consensus Estimate of $1.78 per share, and up from $1.72 per share a year ago, representing an earnings surprise of 0.56% [1] - The company posted revenues of $788.2 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 0.78%, but increased from $738.4 million year-over-year [2] - The stock has underperformed, losing about 20.6% since the beginning of the year compared to the S&P 500's decline of 10.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2 on revenues of $838.84 million, and for the current fiscal year, it is $8.67 on revenues of $3.41 billion [7] - The estimate revisions trend for Western Alliance is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Zacks Industry Rank for Banks - West is in the top 36% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - First Northwest Bancorp (FNWB), another company in the same industry, is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year change of +200% [9]

Financial Performance - Net income for Q1 2025 was $199.1 million, a decrease of 8.2% from $216.9 million in Q4 2024, but an increase of 11.9% from $177.4 million in Q1 2024[9] - Earnings per share for Q1 2025 was $1.79, down from $1.95 in Q4 2024, but up from $1.60 in Q1 2024[9] - Pre-provision net revenue (PPNR) was $277.6 million, down $41.8 million from $319.4 million in Q4 2024, but up $30.6 million from $247.0 million in Q1 2024[10] - Non-interest income for Q1 2025 was $127.4 million, a decrease of $44.5 million from $171.9 million in Q4 2024, and a slight decrease from $129.9 million in Q1 2024[6] - The net interest margin for Q1 2025 was 3.47%, a decrease from 3.48% in Q4 2024 and from 3.60% in Q1 2024[5] - Net income available to common stockholders for Q1 2025 was $195.9 million, compared to $174.2 million in Q1 2024, marking an increase of 12.9%[37] - Diluted earnings per share increased to $1.79 in Q1 2025, up from $1.60 in Q1 2024, a growth of 11.9%[37] Asset and Deposit Growth - Total deposits increased by $3.0 billion, or 4.5%, to $69.3 billion compared to Q4 2024, and increased by $7.1 billion, or 11.4%, compared to Q1 2024[13] - Total assets rose by $2.1 billion, or 2.6%, to $83.0 billion at March 31, 2025, from $80.9 billion at December 31, 2024, and increased by 7.9% from $77.0 billion at March 31, 2024[17] - Total deposits increased to $69.3 billion at March 31, 2025, an 11.4% increase from $62.2 billion at March 31, 2024[30] - Total assets reached $83,043 million as of March 31, 2025, compared to $76,989 million a year earlier, indicating a growth of 8.0%[39] Loan and Credit Quality - HFI loans totaled $54.8 billion, an increase of $1.1 billion, or 2.0%, from Q4 2024, and an increase of $4.1 billion, or 8.0%, from Q1 2024[11] - The provision for credit losses was $31.2 million, a decrease from $60.0 million in Q4 2024, but an increase from $15.2 million in Q1 2024[4] - Nonaccrual loans decreased by $25 million to $451 million during the quarter, but increased by $52 million from March 31, 2024[20] - The ratio of classified assets to Tier 1 capital plus the allowance for credit losses was 15.9% at March 31, 2025, up from 14.2% at December 31, 2024, and 12.0% at March 31, 2024[22] - Special mention loans rose to $460 million, up from $392 million in the previous quarter, with a ratio of 0.84% to funded HFI loans[43] - Loans past due 30 to 89 days increased to $182 million, compared to $92 million in the previous quarter, reflecting a rise in early-stage delinquencies[43] Equity and Capital Ratios - The tangible book value per share increased by 14.4% year-over-year to $54.10, with a CET 1 ratio of 11.1%[2] - Total equity increased to $7.2 billion at March 31, 2025, compared to $6.7 billion at December 31, 2024, and $6.2 billion at March 31, 2024, marking a 16.9% increase[16] - The common equity tier 1 capital ratio was 11.1% at March 31, 2025, slightly down from 11.3% at December 31, 2024, and up from 11.0% at March 31, 2024[17] - Tangible common equity ratio increased to 7.2% as of March 31, 2025, compared to 6.8% a year earlier[34] Expense Management - Non-interest expenses totaled $500.4 million in Q1 2025, compared to $481.8 million in Q1 2024, representing an increase of 3.8%[37] - Total non-interest expense for Q1 2025 was $500.4 million, a decrease from $519.0 million in Q4 2024[51] - Deposit costs for Q1 2025 were $136.8 million, down from $174.5 million in Q4 2024[51] - The efficiency ratio, adjusted for deposit costs, was 55.8% in Q1 2025, compared to 51.1% in Q4 2024 and 57.3% in Q1 2024[8]

Group 1 - Western Alliance Bank announced a cybersecurity incident affecting the personal information of thousands of individuals, including names, Social Security Numbers, and potentially other sensitive data [1] - The data breach may have included dates of birth, financial account numbers, driver's license numbers, tax identification numbers, and passport information [1] Group 2 - Lynch Carpenter, LLP is investigating claims against Western Alliance related to the data breach and is offering potential compensation to affected individuals [2] - Lynch Carpenter is a national class action law firm with a decade of experience in data privacy matters, representing millions of clients [3]

Core Insights - Albert Anthony is a Croatian-American media personality who has gained over 1,000 followers on investor platforms since 2023, focusing on markets and stocks [1] - He is set to launch a new book titled "Financial Markets: Growing A Dividend Income Portfolio" in 2025, which aligns with his ongoing article series on the same topic [1] - Albert Anthony has a background in management and information systems, having worked in the IT department of a top-10 financial firm [1] Company Overview - Albert Anthony & Co. is a sole proprietorship registered in Austin, Texas, and is wholly owned by Albert Anthony [1] - The company does not provide personalized financial advisory services but offers general market commentary based on publicly available data [1] Investment Focus - Albert Anthony has launched the Future Investor Fund, which aims to build a dividend portfolio [1] - The company emphasizes the importance of due diligence for investors, indicating that all investments carry risk [1]