Core Viewpoint - Western Alliance Bancorporation reported strong second quarter results, highlighting significant growth in net interest income, loan momentum, and deposit generation [3]. Financial Performance - The company achieved a net income of $193.6 million and earnings per share of $1.75 for Q2 2024, surpassing the analyst consensus estimate of $1.71 per share [4]. - Quarterly sales reached $771.80 million, exceeding the analyst consensus estimate of $737.64 million [4]. - The return on tangible common equity was reported at 14.3% [3]. - Pre-provision net revenue grew by 22% on a linked quarter annualized basis, excluding the impact of the FDIC special assessment [3]. - Tangible book value per share increased by 13.2% year-over-year to $48.79, with a CET1 ratio of 11.0% [3]. Market Reaction - Following the earnings announcement, Western Alliance shares rose by 7.9%, closing at $76.72 [5]. - Analysts from Piper Sandler and Barclays maintained an Overweight rating on the stock, with Piper Sandler raising the price target from $76 to $93 and Barclays increasing it from $86 to $92 [5].

Financial Data and Key Metrics Changes - The company reported a net interest income growth of 39% annualized, driven by higher average earning assets and an expanding net interest margin (NIM) [10] - The tangible book value per share increased to $48.79, reflecting a growth rate of 3% from the previous quarter [19] - The pre-provision net revenue adjusted for FDIC special assessments is 22% annualized, indicating a positive trend [10] Business Line Data and Key Metrics Changes - Mortgage loan production rose by 14%, while interest rate commitment volume increased by 24%, although the gain on sale margin compressed by 3 basis points [32] - Loans held-for-investment (HFI) grew by $1.7 billion to $52.4 billion, while deposits increased by $4 billion to $66.2 billion at quarter-end [19] - The cost of interest-bearing deposits increased by 6 basis points from the first quarter, while the total cost of funds declined by 3 basis points to 2.79% [33] Market Data and Key Metrics Changes - The yield on total securities increased by 21 basis points to 4.87%, recovering two-thirds of the prior quarter's decline [8] - The company experienced outsized core deposit growth of $4 billion, with HFI loan growth of $1.7 billion or 14% on an annualized basis from Q1 [16] - Non-ECR, non-interest-bearing deposits have shown three consecutive quarters of growth, indicating a positive trend in deposit channels [53] Company Strategy and Development Direction - The company aims to maintain a CET1 capital ratio at or above 11%, supporting forecasted increases in loan volume [24] - The strategy focuses on thoughtful balance sheet growth, enhancing liquidity profiles, and capital bases to drive earnings growth [29] - The company is positioned to proactively lower the effective cost of deposits as interest rate cuts approach, particularly in the warehouse lending segment [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quarter's performance and highlighted the importance of their proactive approach to risk management and liquidity [6] - The outlook for net interest income growth is projected at 9% to 14% from the Q4 2023 annualized jumping-off point, with expectations of two 25 basis-point cuts in the latter half of the year [24] - Management noted that asset quality is normalizing, with net charge-offs expected to remain low by industry standards at 15 to 20 basis points of average loans for the year [38] Other Important Information - The company has a strong focus on low-loss loan categories, which has resulted in a reserve level lower than some peers [21] - The company is actively working on initiatives to manage deposit costs and improve service levels in the warehouse lending space [80] - The Corporate Trust business is showing positive traction, with expectations for continued growth in deposits and services offered [133] Q&A Session Summary Question: What is the outlook for loan growth and deposit growth? - Management expects loan growth to continue at $1 billion per quarter, with total loans projected to grow by $4.5 billion for the year, and deposits expected to grow by $14 billion [37] Question: How does the company plan to manage deposit costs in a changing interest rate environment? - The company plans to leverage its strong balance sheet to lower effective costs of deposits as rates decline, particularly in the warehouse lending segment [80] Question: What is the company's strategy regarding the Corporate Trust business? - The Corporate Trust business is expected to grow significantly, with positive ratings actions from agencies and a strong pipeline of deals [133]

Core Insights - The article emphasizes the importance of key financial metrics in assessing a company's financial health, which can provide a clearer picture than just revenue and earnings changes year-over-year [1] Company Performance - Western Alliance reported revenue of $781.7 million for the quarter ended June 2024, reflecting a 15.3% increase compared to the same period last year [4] - The company achieved an EPS of $1.75, down from $1.96 in the year-ago quarter [4] - The reported revenue exceeded the Zacks Consensus Estimate of $736.28 million by 6.17%, and the EPS also surpassed the consensus estimate of $1.71 by 2.34% [2] Key Financial Metrics - Efficiency Ratio: 62.3%, slightly above the average estimate of 61.6% [3] - Net Interest Margin: 3.6%, compared to the average estimate of 3.4% [3] - Average Balance of Total Interest Earning Assets: $73.87 billion, exceeding the estimated $72.12 billion [3] - Net Charge-offs to Average Loans (annualized): 0.2%, higher than the estimated 0.1% [3] - Tier 1 Leverage Ratio: 8%, slightly below the average estimate of 8.1% [3] - Total Non-Interest Income: $115.20 million, above the estimated $112.09 million [3] - Net Interest Income: $656.60 million, surpassing the estimated $618.81 million [3] - Net Loan Servicing Revenue: $38.10 million, exceeding the estimated $33.23 million [3] - Net Gain on Loan Origination and Sale Activities: $46.80 million, below the estimated $48.83 million [3] - Service Charges and Fees: $10.80 million, above the estimated $9.92 million [3] - Commercial Banking Related Income: $6.70 million, slightly above the estimated $6.47 million [3] - Income from Equity Investments: $4.20 million, significantly lower than the estimated $9.52 million [3] Stock Performance - Shares of Western Alliance have returned +23.3% over the past month, significantly outperforming the Zacks S&P 500 composite's +2.1% change [5] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [5]

Core Viewpoint - Western Alliance (WAL) reported quarterly earnings of $1.75 per share, exceeding the Zacks Consensus Estimate of $1.71 per share, but down from $1.96 per share a year ago [1][6] Financial Performance - The company posted revenues of $781.7 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 6.17%, compared to $678 million in the same quarter last year [6] - The earnings surprise for the quarter was 2.34%, with a previous quarter's earnings of $1.72 per share exceeding expectations of $1.69 per share by 1.78% [5] Market Performance - Western Alliance shares have increased approximately 11.5% since the beginning of the year, while the S&P 500 has gained 17.2% [2] - The company has surpassed consensus EPS estimates three times over the last four quarters [6] Earnings Outlook - The estimate revisions trend for Western Alliance is currently unfavorable, leading to a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [4] - The current consensus EPS estimate for the upcoming quarter is $1.92 on revenues of $778.48 million, and for the current fiscal year, it is $7.41 on revenues of $3.05 billion [12] Industry Context - The Banks - West industry, to which Western Alliance belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [8]

Financial Performance - Net income for Q2 2024 was $193.6 million, up $16.2 million from Q1 2024, but down $22.1 million from Q2 2023[19]. - Net income for the three months ended June 30, 2024, was $193.6 million, an increase from $177.4 million in the previous quarter[32]. - Net income available to common stockholders was $190.4 million in Q2 2024, a decrease of 10.4% from $212.5 million in Q2 2023[55]. - Net income for the six months ended June 30, 2024, was $371.0 million, compared to $210.4 million in the same period last year, showing a significant increase of approximately 76.5%[67]. - Net income for the quarter was $357.9 million, an increase from $299.0 million year-over-year[69]. Asset Growth - Total assets increased to $80,581 million as of June 30, 2024, up 18.2% from $68,160 million in June 30, 2023[1]. - Total assets rose by 4.7% to $80.6 billion at June 30, 2024, from $77.0 billion at March 31, 2024, and increased by 18.2% from $68.2 billion at June 30, 2023[44]. - Total assets grew to $78.55 billion, up from $72.68 billion in the prior period[78]. Loan and Deposit Metrics - HFI loans, net of deferred fees, rose to $52,430 million, reflecting a 9.5% increase from $47,875 million year-over-year[1]. - Total deposits reached $66,244 million, marking a 29.8% increase from $51,041 million in June 30, 2023[1]. - HFI loans totaled $52.4 billion, an increase of $1.7 billion or 3.4% from the previous quarter[13]. - Total deposits reached $66.2 billion, up $4.0 billion or 6.5% compared to the previous quarter[13]. - Total loans held for investment (HFI) amounted to $50,251 million, with a yield of 6.78%, compared to $49,351 million and a yield of 6.38% in the previous year[64]. Income and Expense Analysis - The net interest income for the three months ended June 30, 2024, was $656.6 million, with a net interest margin of 3.63%[6]. - Total interest income was $1,147.5 million for the three months ended June 30, 2024, an increase from $1,055.0 million in the previous quarter[32]. - Total non-interest income was $115.2 million for the three months ended June 30, 2024, a decrease from $129.9 million in the previous quarter[32]. - Total non-interest expense was $486.8 million for the three months ended June 30, 2024, an increase from $481.8 million in the previous quarter[32]. - Non-interest expenses rose to $735.3 million, up 27.3% from $283.6 million in the previous year[69]. Capital and Equity - Common Equity Tier 1 capital stood at 11.0% as of June 30, 2024, compared to 10.1% a year earlier[7]. - Stockholders' equity rose to $6,334 million, an 11.4% increase from $5,685 million in June 30, 2023[1]. - Stockholders' equity increased to $6.3 billion at June 30, 2024, compared to $6.2 billion at March 31, 2024, and $5.7 billion at June 30, 2023, driven by net income[44]. - Total tangible common equity rose to $5,375 million, compared to $5,211 million in the previous quarter[86]. Credit Quality - Nonaccrual loans amounted to $401 million, with a ratio of nonaccrual loans to funded HFI loans at 0.76%[8]. - The provision for credit losses was $37.1 million, up $21.9 million from the previous quarter, primarily due to loan growth and net charge-offs of $22.8 million[40]. - Annualized net loan charge-offs to average loans outstanding was 0.18%, compared to 0.06% in the previous quarter[13]. - The allowance for credit losses stood at $349 million, compared to $314 million in the previous year, indicating a strengthening of reserves[64]. Operational Efficiency - The efficiency ratio, adjusted for deposit costs, improved to 51.5% in Q2 2024 from 57.3% in Q1 2024[19]. - The company's ratio of HFI loans to deposits was 79.1% at June 30, 2024, down from 81.5% in the previous quarter[43]. - Non-interest income reached $245.1 million, up from $234.8 million, indicating a growth of approximately 4.0% year-over-year[67]. Market Position and Recognition - The company received top rankings in 2023 for Best CEO, Best CFO, and Best Investor Relations Team, highlighting its strong market position[6]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[80].

For the quarterly period ended March 31, 2024 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from__________ to __________ Commission file number: 001-32550 WESTERN ALLIANCE BANCORPORATION (Exact name of registrant as specified in its chart ...

Gary Yeowell Western Alliance Bancorporation (NYSE:WAL) reported better than expected earnings for the first fiscal quarter on April 19, 2024. The regional bank posted almost flat net interest income year over year for Q1'24 due to a rapid repayment of outstanding borrowings that Western Alliance took on during last year's crisis in the regional banking market. The bank's deposits are also showing healthy growth, and the bank's latest consolidation provides a new entry opportunity for investors. With shares ...

Financial Data and Key Metrics - The company reported pre-provision net revenue (PPNR) of $247 million, net income of $177 million, and earnings per share (EPS) of $1.60 for Q1 2024. Excluding the $18 million FDIC special assessment charge, PPNR was $265 million, net income was $191 million, and EPS was $1.72 [14] - Net interest income increased by $7 million from Q4 2023 to $599 million, driven by higher average earning asset balances and lower average borrowings [14] - Non-interest income rose by $39 million quarter-over-quarter to $130 million, primarily due to improved mortgage servicing rights (MSR) valuation [15] - Tangible book value per share increased by $0.58 to $47.30, driven by retained earnings growth [16] - The CET1 capital ratio reached 11%, and the loan-to-deposit ratio decreased by 10 points to 81% [10] Business Line Performance - Held-for-investment (HFI) loan growth was $403 million, predominantly in commercial and industrial (C&I) categories, with C&I growth of $646 million [16] - Deposit growth was $6.9 billion, driven by regional commercial banking, mortgage warehouse, and digital consumer channels [17] - Mortgage warehouse deposits rebounded by $3.5 billion, fully replacing Q4 outflows [21] Market Performance - The company experienced broad-based deposit growth across regions, with HOA and digital consumer channels contributing over $800 million each, and Juris Banking adding over $400 million [21] - The yield on total securities decreased by 33 basis points to 4.66%, reflecting efforts to enhance liquidity [22] Strategy and Industry Competition - The company has repositioned its balance sheet to optimize funding structure, increase capital, and enhance liquidity, aiming to mitigate future industry volatility [8][9] - The company plans to focus on deploying incremental liquidity into safe and thoughtful loans, with expected loan growth of $4 billion for the full year, up from the previous $2 billion guidance [35] - The company expects to maintain a CET1 ratio of around 11% and anticipates net interest income growth of 5% to 10% for 2024 [36] Management Commentary on Operating Environment and Future Outlook - Management highlighted the completion of the balance sheet repositioning, which has fortified the company's liquidity and capital position, enabling stronger loan growth starting in Q2 [10][12] - The company expects net interest margin (NIM) to trough in Q2 but anticipates NIM expansion in the second half of the year due to loan repricing and new originations [37] - Management remains cautious about the economic environment but is optimistic about the resilience of the mortgage banking business and the potential for growth in non-interest income [37] Other Important Information - Asset quality remained steady, with special mention loans and classified assets declining by $139 million from Q4 2023 [11] - Net charge-offs were $9.8 million, or 8 basis points of average loans, with provision expense of $15.2 million covering net charge-offs and supporting loan growth [27] - The company's effective tax rate decreased to 23.5% from a temporarily elevated rate in the previous quarter [19] Q&A Session Summary Question: Expense growth and NII expectations - The expense growth is primarily driven by ECR-related deposit costs, but it will also help drive net interest income (NII) as the company deploys additional funds into higher-yielding assets [45] - The company revised its loan growth guidance from $500 million per quarter to $1 billion per quarter, which will support NII growth throughout the year [46] Question: Capital and credit-linked notes (CLNs) - The company expects to maintain a CET1 ratio at or above 11% for the remainder of the year, with excess capital absorbed by increasing loan growth [47] - The runoff of CLNs is expected to contribute 40 to 50 basis points to the CET1 ratio [48] Question: Loan and deposit growth guidance - The company expects to grow deposits by $2 billion per quarter, with total deposit growth of $11 billion for the year, driven by strong performance in HOA, corporate trust, and regional banking [51][52] - Loan growth is expected to be $1 billion per quarter, with a focus on C&I, warehouse lending, and tech and innovation sectors [54][55] Question: Expense guidance and efficiency ratio - The expense guidance includes ECR-related deposit costs but excludes the $17 million FDIC special assessment. The company expects the efficiency ratio to trend towards the mid-50s [56][58] Question: Asset quality and non-performing loans (NPLs) - The increase in NPLs is primarily due to the company's strategy to accelerate resolution for certain loans. Two-thirds of NPLs are paying as agreed, and the company maintains a strong collateral position [96][97] Question: Deposit mix and cost outlook - The company expects minimal deposit mix shift, with growth primarily in money market accounts and a tapering off of higher-cost CDs [90] - Deposit costs increased by 11 basis points in Q1, but the overall cost of funds remained flat at 2.82% [23] Question: Net interest margin (NIM) outlook - NIM is expected to trough in Q2, with mid-single-digit basis points expansion in the second half of the year due to loan repricing and new originations [125][126] Question: M&A and capital deployment - The company is focused on organic growth and does not currently have plans for M&A, preferring to deploy excess capital into internal growth opportunities [101] Question: Asset sensitivity and NII impact - The company is asset-sensitive, with a 100 basis point rate increase expected to boost NII by 3%. The NII guide remains at the upper end of the range despite fewer rate cuts due to better loan growth [122][129]

For the quarter ended March 2024, Western Alliance (WAL) reported revenue of $738.4 million, up 31.7% over the same period last year. EPS came in at $1.72, compared to $2.30 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $711.34 million, representing a surprise of +3.80%. The company delivered an EPS surprise of +1.78%, with the consensus EPS estimate being $1.69.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall St ...

Western Alliance (WAL) came out with quarterly earnings of $1.72 per share, beating the Zacks Consensus Estimate of $1.69 per share. This compares to earnings of $2.30 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.78%. A quarter ago, it was expected that this bank holding company would post earnings of $1.93 per share when it actually produced earnings of $1.91, delivering a surprise of -1.04%.Over the last four quarters, ...