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Western Alliance (WAL) to Report Q1 Results: Wall Street Expects Earnings Growth
ZACKS· 2025-04-10 15:06
Core Viewpoint - The market anticipates Western Alliance (WAL) to report a year-over-year increase in earnings driven by higher revenues for the quarter ended March 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The consensus estimate for quarterly earnings is $1.78 per share, reflecting a year-over-year increase of +3.5%, while revenues are expected to reach $794.4 million, up 7.6% from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 3.06%, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Western Alliance is higher than the consensus estimate, resulting in a positive Earnings ESP of +0.30% [10][11]. Historical Performance - In the last reported quarter, Western Alliance exceeded the expected earnings of $1.92 per share by delivering $1.95, achieving a surprise of +1.56%. The company has beaten consensus EPS estimates three times over the last four quarters [12][13]. Investment Considerations - Despite a positive Earnings ESP, Western Alliance carries a Zacks Rank of 4, complicating predictions of an earnings beat. Investors should consider additional factors beyond earnings results when evaluating the stock [11][16].
Western Alliance (WAL) Surges 12.4%: Is This an Indication of Further Gains?
ZACKS· 2025-04-10 14:15
Company Overview - Western Alliance (WAL) shares increased by 12.4% to close at $68.54, following a significant trading volume compared to normal sessions, despite a prior 17.2% loss over the past four weeks [1][2] - The stock's rally was influenced by a broader market surge, particularly due to President Donald Trump's announcement of a 90-day tariff pause for non-retaliating nations, which positively impacted investor sentiment [2] Earnings Expectations - Western Alliance is projected to report quarterly earnings of $1.78 per share, reflecting a year-over-year increase of 3.5% [2] - Revenue expectations stand at $794.4 million, indicating a 7.6% growth from the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Western Alliance has been revised down by 3.1% over the last 30 days, which typically does not correlate with price appreciation [4] - Monitoring the trend in earnings estimate revisions is crucial, as it is strongly linked to near-term stock price movements [3][4] Industry Context - Western Alliance operates within the Zacks Banks - West industry, which includes other companies like Plumas Bancorp (PLBC) [4] - Plumas Bancorp's consensus EPS estimate remains unchanged at $1.13, representing a 7.6% increase from the previous year, and it also holds a Zacks Rank of 3 (Hold) [5]
Western Alliance Bancorporation(WAL) - 2024 Q4 - Annual Report
2025-02-25 21:41
Financial Performance - As of December 31, 2024, total assets of Western Alliance Bank (WAB) reached $80.862 billion, with net loans amounting to $55.588 billion and total deposits of $66.760 billion[19]. - Net income available to common stockholders for 2024 was $774.9 million, up from $709.6 million in 2023, reflecting an increase of approximately 9.2%[402]. - Net income for the year ended December 31, 2024, was $787.7 million, an increase of 9.1% from $722.4 million in 2023[404]. - Earnings per share (EPS) for 2024 was $7.14, an increase from $6.55 in 2023, reflecting a growth of 9%[402]. - The company reported a total non-interest income of $543.2 million in 2024, significantly higher than $280.7 million in 2023, indicating a growth of 93.5%[402]. - Comprehensive income decreased to $766.9 million in 2024 from $870.5 million in 2023, reflecting a decline of 11.9%[404]. - The provision for credit losses increased significantly to $145.9 million in 2024, compared to $62.6 million in 2023, indicating a rise of 133.5%[411]. - Cash flows from operating activities showed a net cash outflow of $2,742.0 million in 2024, a substantial increase from an outflow of $328.6 million in 2023[411]. Loan Portfolio Composition - Commercial and industrial loans constituted 43% of the Company's held-for-investment (HFI) loan portfolio as of December 31, 2024, compared to 38% in 2023[24]. - Residential loans made up 27% of the loan portfolio as of December 31, 2024, down from 29% in 2023[25]. - Loans for commercial real estate (CRE) represented 22% of the loan portfolio as of December 31, 2024, slightly decreasing from 23% in 2023[26]. - Construction and land development loans accounted for 8% of the loan portfolio as of December 31, 2024, down from 10% in 2023[29]. - Approximately $2.3 billion, or 4.4% of total HFI loans, were CRE non-owner occupied office loans as of December 31, 2024, compared to $2.4 billion, or 4.7%, in 2023[26]. - The composition of the HFI loan portfolio includes $23.1 billion (43.1%) in commercial and industrial loans, $14.3 billion (26.7%) in residential real estate loans, and $9.9 billion (18.4%) in non-owner occupied commercial real estate loans[31]. - Approximately 57% of the company's loan portfolio was secured by real estate as of December 31, 2024[106]. Credit Risk Management - The allowance for credit losses was $374 million as of December 31, 2024, compared to $337 million in the previous year[31]. - The Company's allowance for credit losses (ACL) on funded loans totaled $373.8 million as of December 31, 2024, with an additional $39.5 million for unfunded loan commitments and letters of credit[92]. - The Company uses an expected credit loss model to estimate life-of-loan losses for loans held for investment and unfunded loan commitments[389]. - The Company maintains a tiered loan approval process, with individual credit authorities and subcommittees for loans exceeding certain thresholds, ensuring rigorous credit risk management[34]. - The Company's credit culture emphasizes early identification of troubled credits, with increased frequency of meetings and engagement with the special assets group to address potential problem loans[35]. Deposits and Funding - The Company’s deposit portfolio as of December 31, 2024, totaled $66,341 million, up from $55,333 million in 2023, reflecting a growth of 19.9%[54]. - Non-interest-bearing demand deposits increased to $18,846 million (28.4% of total deposits) in 2024, compared to $14,520 million (26.2%) in 2023[54]. - Net increase in deposits for 2024 reached $11,002 million, a significant increase from $1,688.9 million in 2023[412]. - The company has $5.1 billion in borrowings from the FHLB of San Francisco as of December 31, 2024, which are used to satisfy short-term liquidity needs[124]. Investment Securities - The investment securities portfolio totaled $15.1 billion as of December 31, 2024, accounting for approximately 19% of total assets, with a significant portion invested in AAA/AA+ rated securities[47]. - The company's total debt securities increased to $14,994 million in 2024, up from $12,594 million in 2023, indicating a growth of 19.1%[49]. - The company purchased $16,789.7 million in AFS investment securities in 2024, an increase from $15,144.7 million in 2023[411]. - Gross unrealized losses on held-to-maturity (HTM) and available-for-sale (AFS) investment securities were $218 million and $729 million, respectively, as of December 31, 2024[83]. Interest Rate Risk - The Company actively manages interest rate risk through various asset/liability strategies and hedging techniques[369]. - The Company's net interest income is projected to change by 10.9% in response to a 200 basis points increase in market interest rates[375]. - The average interest-bearing deposit beta is 57%, with product-level deposit beta assumptions ranging from 46% to 92%[372]. - Interest rate risk exposure is reviewed at least quarterly by the Asset-Liability Committee (ALCO)[371]. Employee and Workforce - The employee turnover rate was 15% in 2024, consistent with the previous year, while the turnover rate for employees under 30 was 19%[68][69]. - The Company employed 3,524 full-time equivalent employees as of December 31, 2024, marking an 8% increase from the previous year[63]. - The Company’s female employees represented 50% of the workforce as of December 31, 2024, a slight decrease from 51% in 2023[65]. Regulatory and Market Risks - The company faces significant competition from various financial institutions, which may limit asset growth and financial results[110]. - Regulatory scrutiny regarding climate change may lead to increased compliance costs and capital requirements for the company[97]. - The company is exposed to risks associated with the ownership of real estate, including potential environmental liabilities and changes in foreclosure laws[107]. - The financial performance is highly dependent on economic conditions, with potential adverse effects from factors such as inflation, interest rate changes, and geopolitical events[78]. - The company may need to raise additional capital if actual credit losses exceed the ACL, which could materially affect its financial condition and results of operations[93]. Digital Initiatives - The Company provides specialized financial services, including mortgage banking through AmeriHome and digital payment services for the class action legal industry[17]. - The company is pursuing digital payments initiatives, which are subject to significant uncertainty and may adversely affect its business and financial results[116]. - Market acceptance of the company's digital payments products is uncertain, and there is no assurance that these products will be accepted by customers[117]. Capital and Dividends - The company's CET1 ratio was 11.3% as of December 31, 2024, exceeding the well-capitalized regulatory threshold of 6.5%[120]. - The company paid dividends of $164.0 million to common stockholders in 2024, up from $158.7 million in 2023[407]. - The company has paid regular quarterly dividends since Q3 2019, but future dividend payments are subject to capital availability and board discretion, which could affect stock price[154].
Western Alliance Bancorporation(WAL) - 2024 Q4 - Earnings Call Transcript
2025-01-28 20:10
Financial Data and Key Metrics Changes - Western Alliance generated earnings of $1.95 per share for Q4 2024 and $7.09 for the full year, with net revenue of $3.2 billion and net income of $788 million, reflecting increases of 21% and 14% respectively from the prior year [9][11][12] - Pre-provision net revenue grew 12% linked-quarter unannualized, demonstrating the strength of the bank's credit and deposit platforms [10] - The net interest income decreased by $30 million in Q4 to $667 million, while non-interest income rose by $46 million to $172 million, driven by higher mortgage banking revenue [12][13] Business Line Data and Key Metrics Changes - Loan growth was back-weighted, with a total increase of $330 million, primarily in commercial and industrial (C&I) loans, which now account for 43% of the held-for-investment loan portfolio [30][31] - Mortgage banking revenue grew by $34 million to $93 million, with a 31% year-over-year increase in mortgage loan production [13][14] - Non-interest expense declined by $18 million to $519 million, as deposit costs fell by over $33 million [14][22] Market Data and Key Metrics Changes - Deposits grew by $11 billion in 2024, primarily in money market accounts and ECR-related non-interest bearing accounts, despite a decline of $1.7 billion in Q4 due to seasonal factors [26][32] - The bank's balance sheet ended the year at approximately $81 billion, with a significant liquidity build and a loan-to-deposit ratio targeted to remain in the low 80s [26][29] Company Strategy and Development Direction - The company aims for continued thoughtful balance sheet growth in 2025, with expectations of $5 billion in loan growth and $8 billion in deposit growth [46][47] - The strategy includes diversifying credit and deposit platforms to drive net interest income growth and margin expansion, while maintaining a low-risk profile [46][49] - The bank is preparing for a transition to a Category 4 bank, with significant investments in risk and treasury management [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality, expecting a decline in non-performing loans and charge-offs throughout 2025 [35][50] - The effective tax rate for the full year is expected to remain around 21%, similar to 2024 [50] - Management anticipates a renewed period of stronger profitability and robust earnings growth in 2025, with a target for return on tangible common equity to climb into the upper teens [50] Other Important Information - The company has identified 17 properties affected by Southern California wildfires, with a combined exposure of under $15 million, expecting negligible direct financial impact due to sufficient insurance coverage [7][8] - The tangible book value per share increased by 12% year-over-year to $52.27, despite a negative AOCI charge in Q4 [29][45] Q&A Session Summary Question: Capital deployment priorities and excess capital - Management indicated that while they expect to generate enough capital to support balance sheet growth, they may consider buybacks if market conditions allow [53][54] Question: Ideal rate backdrop for earnings growth - A gentle decline in rates is preferred, as it would ease credit concerns and improve debt service coverage [55][56] Question: ECR related cost outlook and deposit balances - Management expects broader growth in the deposit base in 2025, with less expansion in mortgage-related deposits [64][66] Question: Outlook for C&I loans and credit quality - C&I loans have remained stable, with no significant migration trends observed outside of the CRE office segment [78][80] Question: Fee income guidance and equity gains - Fee income growth is expected to come from regional banking and digital payment services, with no assumptions for equity gains included in the guidance [88][92] Question: Earnings at risk and interest rate sensitivity - Management confirmed that the bank is largely rate neutral, with strategies in place to manage earnings at risk in various interest rate scenarios [116][119]
Western Alliance Bancorporation(WAL) - 2024 Q4 - Earnings Call Presentation
2025-01-28 14:14
Q2 20241 EARNINGS CALL 4th Quarter 2024 January 28, 2025 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 perfo ...
Western Alliance: Mortgage Exposure And Credit Concerns Dent The Bull Case (Downgrade)
Seeking Alpha· 2025-01-28 06:54
Group 1 - Western Alliance shares (NYSE: WAL) have rebounded strongly, sitting near a 52-week high, up 34% from last year after facing significant pressure during the regional banking crisis of 2022 [1] - Despite the strong rebound, shares experienced a slight decline after hours on Wednesday [1]
Here's What Key Metrics Tell Us About Western Alliance (WAL) Q4 Earnings
ZACKS· 2025-01-28 00:32
Core Insights - Western Alliance (WAL) reported revenue of $848.4 million for Q4 2024, a year-over-year increase of 22.7% and a surprise of +3.82% over the Zacks Consensus Estimate of $817.22 million [1] - The EPS for the same quarter was $1.95, compared to $1.91 a year ago, with an EPS surprise of +1.56% over the consensus estimate of $1.92 [1] Financial Performance Metrics - Efficiency Ratio was reported at 51.1%, significantly better than the estimated 59.2% by analysts [4] - Net Interest Margin stood at 3.5%, exceeding the average estimate of 3.3% [4] - Net charge-offs to average loans were annualized at 0.3%, slightly above the average estimate of 0.2% [4] - Average Balance of Total interest earning assets was $77.31 billion, higher than the estimated $76.07 billion [4] - Total non-interest income reached $171.90 million, surpassing the estimated $129.96 million [4] - Service charges and fees were $31.70 million, slightly above the average estimate of $31.32 million [4] - Net interest income was reported at $666.50 million, below the average estimate of $673.83 million [4] - Net gain on loan origination and sale activities was $67.90 million, compared to the average estimate of $46.99 million [4] - Other non-interest income was $14.80 million, below the average estimate of $19.77 million [4] - Income from equity investments was $11.10 million, exceeding the average estimate of $6.55 million [4] - Net loan servicing revenue was $24.70 million, below the average estimate of $27 million [4] Stock Performance - Shares of Western Alliance have returned +10.1% over the past month, outperforming the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]
Western Alliance (WAL) Surpasses Q4 Earnings and Revenue Estimates
ZACKS· 2025-01-28 00:01
Core Viewpoint - Western Alliance (WAL) reported quarterly earnings of $1.95 per share, exceeding the Zacks Consensus Estimate of $1.92 per share, and showing an increase from $1.91 per share a year ago, indicating a positive earnings surprise of 1.56% [1] Financial Performance - The company achieved revenues of $848.4 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.82%, and up from $691.3 million in the same quarter last year [2] - Over the last four quarters, Western Alliance has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Since the beginning of the year, Western Alliance shares have increased by approximately 10.3%, outperforming the S&P 500's gain of 3.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.92 on revenues of $803.92 million, while for the current fiscal year, the estimate is $8.87 on revenues of $3.4 billion [7] - The estimate revisions trend for Western Alliance is mixed, which may change following the recent earnings report [6] Industry Context - The Banks - West industry, to which Western Alliance belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]
Western Alliance Bancorporation(WAL) - 2024 Q4 - Annual Results
2025-01-27 21:25
Financial Performance - Net income for Q4 2024 was $216.9 million, an increase of 8.6% from $199.8 million in Q3 2024 and 46.6% higher than Q4 2023[10] - Earnings per share for Q4 2024 reached $1.95, up 8.3% from $1.80 in Q3 2024 and 46.6% from $1.33 in Q4 2023[10] - Non-interest income for Q4 2024 was $171.9 million, up 36.2% from $126.2 million in Q3 2024 and 90.1% from $90.5 million in Q4 2023[7] - The Company's net income for the fourth quarter 2024 was $216.9 million, a 46.7% increase from $147.9 million in the fourth quarter 2023[33] - Net income available to common stockholders reached $213.7 million in Q4 2024, compared to $144.7 million in Q4 2023, an increase of 47.7%[40] - Net interest income after provision for credit losses was $606.5 million for Q4 2024, compared to $582.4 million in Q4 2023, marking a 4.3% increase[40] - Net interest income for the year ended December 31, 2024, was $2,618.9 million, up from $2,338.9 million in 2023, representing a year-over-year increase of 12.0%[53] Asset and Deposit Management - Total assets increased by $854 million, or 1.1%, to $80.9 billion at December 31, 2024, compared to $80.1 billion at September 30, 2024, and increased by 14.2% from $70.9 billion at December 31, 2023[19] - Total deposits decreased by $1.7 billion, or 2.5%, to $66.3 billion in Q4 2024, but increased by $11.0 billion, or 19.9%, year-over-year[15] - The Company's total assets of the company were $82.688 billion, reflecting a strong balance sheet position[51] Loan Performance - HFI loans totaled $53.7 billion, an increase of $330 million, or 0.6%, from Q3 2024 and up $3.4 billion, or 6.7%, year-over-year[13] - Loans held for investment increased to $53.676 million in Q4 2024, compared to $53.346 million in Q3 2024, an increase of 0.6%[42] - The allowance for loan losses was $374 million as of December 31, 2024, up from $357 million in Q3 2024, indicating a rise of 4.8%[42] - Nonaccrual loans rose to $476 million, representing 0.89% of funded HFI loans, compared to 0.65% in the prior quarter[46] - Loans past due 30 to 89 days, still accruing, amounted to $92 million, which is 0.17% of funded HFI loans[46] Credit Quality and Provisions - The provision for credit losses increased to $60.0 million in Q4 2024, up from $33.6 million in Q3 2024 and $9.3 million in Q4 2023[5] - The provision for credit losses totaled $60.0 million for the fourth quarter 2024, compared to $33.6 million for the third quarter 2024, and $9.3 million for the fourth quarter 2023[21] - The company reported a provision for credit losses of $60.0 million in Q4 2024, up from $9.3 million in Q4 2023, reflecting a more cautious outlook on credit quality[55] Efficiency and Ratios - The efficiency ratio, adjusted for deposit costs, improved to 51.1% in Q4 2024 from 52.7% in Q3 2024 and 59.1% in Q4 2023[9] - The efficiency ratio improved to 61.2% in Q4 2024 from 66.8% in Q4 2023, demonstrating enhanced operational efficiency[56] - The Company's common equity tier 1 capital ratio was 11.3% at December 31, 2024, up from 10.8% at December 31, 2023[19] - The tangible common equity ratio remained stable at 7.2% as of December 31, 2024, consistent with the previous quarter[37] Investment and Interest Income - Total interest income rose to $1,138.6 million in Q4 2024, up from $1,039.0 million in Q4 2023, reflecting a year-over-year increase of 9.6%[40] - Total interest earning assets decreased to $77.306 billion with net interest income of $666.5 million, resulting in a net interest margin of 3.48% for the three months ended December 31, 2024[51] - Average yield on loans held for investment (HFI) was 6.63% in 2024, compared to 6.53% in 2023, indicating a slight improvement in loan profitability[53]
Curious about Western Alliance (WAL) Q4 Performance? Explore Wall Street Estimates for Key Metrics
ZACKS· 2025-01-22 15:20
Core Viewpoint - Analysts forecast that Western Alliance (WAL) will report quarterly earnings of $1.92 per share, reflecting a year-over-year increase of 0.5%, with revenues expected to reach $817.22 million, an 18.2% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised down by 0.1% in the past 30 days, indicating a reassessment by covering analysts [2]. - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Key Metrics Projections - Analysts predict an 'Efficiency Ratio' of 59.2%, down from 66.8% a year ago [4]. - The 'Net Interest Margin' is estimated at 3.3%, compared to 3.7% in the previous year [5]. - The average prediction for 'Total interest earning assets' is $76.07 billion, up from $65.33 billion in the same quarter last year [5]. - 'Total non-interest income' is expected to be $129.96 million, an increase from $90.50 million year-over-year [5]. - 'Net gain on loan origination and sale activities' is forecasted at $46.99 million, slightly down from $47.80 million a year ago [6]. - 'Net interest income' is estimated at $673.83 million, up from $591.70 million in the same quarter last year [6]. - 'Service charges and fees' are expected to reach $31.32 million, compared to $22.70 million in the previous year [7]. - 'Net loan servicing revenue' is projected at $27.00 million, significantly up from $9.10 million year-over-year [7]. - 'Other non-interest income' is anticipated to be $19.77 million, compared to $8.10 million a year ago [8]. Stock Performance - Over the past month, shares of Western Alliance have returned +8.9%, outperforming the Zacks S&P 500 composite's +2.1% change [8].