Core Viewpoint - Western Alliance Bank has promoted Craig Lee Huntington to Head of Association Banking, reflecting the bank's commitment to the community association management industry [1] Company Summary - Craig Lee Huntington was a founding member of Alliance Association Bank in 2009, which was the bank's first national business line [1] - The Association Banking group has expanded to serve over 1,500 clients and nearly 45,000 community associations nationwide, establishing Western Alliance as a leader in this sector [1]

Core Viewpoint - Western Alliance Bancorporation (NYSE: WAL) is identified as one of the 10 Best Bank Stocks to Buy in 2026, reflecting strong growth potential and positive investor sentiment [1]. Financial Performance - In Q4 2025, Western Alliance reported a 32.4% year-over-year increase in attributable net income, rising from $213.7 million to $282.9 million [3]. - Diluted earnings per share grew 32.8% year-over-year to $2.59, up from $1.95 [3]. - Return on average assets improved by 19 basis points to 1.23%, while return on average total common equity increased by 230 basis points to 16.9% [3]. Revenue Drivers - The growth in net interest income (NII) was 15.0% year-over-year, primarily driven by loan growth and a slight expansion in net interest margins (NIM) [4]. - Total loans held for investment increased by 9.3% year-over-year to $58.7 billion, with commercial and industrial loans growing 20.8% to $27.9 billion [4]. - Total deposits rose by $10.8 billion to $77.2 billion, fully funding the $5.0 billion increase in loan growth [4]. Interest Margins and Costs - Net interest margin expanded by 3 basis points year-over-year to 3.51%, while average funding costs decreased by 41 basis points to 2.11% [5]. - The bank estimates that a 100-basis-point change in overall interest rates will affect net interest income by 2.7% [5]. Asset Quality - Asset quality metrics remained stable, with special mention loans percentage improving by 18 basis points to 0.55% and non-performing loans percentage improving by 4 basis points to 0.85% [6]. Future Outlook - Management expects loan growth of $6 billion (10.2% year-over-year) in 2026, supported by an $8 billion increase in deposits (10.4% year-over-year) [7]. - Anticipated rate cuts by the US Federal Reserve are expected to drive 11%-14% year-over-year growth in net interest income [7]. - Asset quality is projected to slightly deteriorate, with net charge-off percentage expected to rise to 25-35 basis points [7].

Core Viewpoint - Western Alliance Bancorporation (NYSE:WAL) is identified as a mid-cap stock with strong investment potential, receiving a Buy rating and an increased price target from DA Davidson following positive quarterly results [1][2]. Financial Performance - The company reported an EPS of $2.59, exceeding the expected $2.39, resulting in an 8.37% surprise [2]. - Revenue reached $980.9 million, surpassing projections of $913.4 million [2]. Future Projections - DA Davidson highlighted Western Alliance's initial 2026 projections as favorable, driven by robust top-line revenue growth and strong year-over-year operating leverage [3]. - The firm noted the company's efforts to reduce non-performing asset (NPA) levels in the first half of the year, which are expected to be positively received by investors [3]. Company Overview - Western Alliance Bancorporation serves as a bank holding company for Western Alliance Bank, providing a variety of banking services for both businesses and individuals [4].

Group 1: Western Alliance Bank's Expansion and Leadership Changes - Western Alliance Bank has appointed Ian Hawk as the New York market manager for the Note Finance Group, enhancing its presence in a competitive private credit hub [1] - Hawk brings nearly a decade of experience in commercial real estate and private credit, focusing on providing differentiated leverage solutions to New York-based private credit platforms [1] - The bank aims to expand the availability of note finance and single note-on-note products in response to growing demand for tailored financing solutions in the region [1] Group 2: Recognition and Financial Support Initiatives - Western Alliance Bank has been named the Best Small and Medium-Sized Enterprises Bank in the Southwest U.S. by Global Finance, highlighting its commitment to supporting SMEs with innovative financial solutions [2] - The bank provided $35 million in financing for major capital improvements at Marina City Club, enabling structural repairs and new amenities without imposing special assessments on homeowners [2]

Core Viewpoint - Western Alliance Bancorporation (WAL) has been downgraded to Neutral from Overweight by J.P. Morgan due to an upside risk to earnings credit rate (ECR) deposit costs [1] Summary by Relevant Sections - **Earnings Credit Rate (ECR) Deposit Costs** - The outlook for 2026 ECR deposit costs is projected to be in the range of $535 million to $585 million [1]

Core Insights - The company reported record financial results for 2025, including net interest income of $2.9 billion, net revenue of $3.5 billion, and pre-provision net revenue (PP&R) of $1.4 billion, with net income available to common shareholders at $956 million and EPS at $8.73, reflecting a 12% increase in net revenue and a 26% increase in PP&R year-over-year [1][6][4] Financial Performance - For Q4, the company achieved an EPS of $2.59, a 33% increase from the same period last year, with a return on average assets of 1.23% and a return on average tangible common equity of 16.9% [2] - The company ended 2025 with strong momentum, citing robust loan growth, reduced seasonal deposit outflows, and stable net interest margin (NIM) [3][4] Balance Sheet and Growth - Total assets reached approximately $93 billion, with deposits increasing by 16% year-over-year, amounting to an additional $10.8 billion, and held-for-investment (HFI) loan growth of $5 billion for 2025 [5][7] - The company expects to achieve $6 billion in loan growth and $8 billion in deposit growth for 2026, with net interest income projected to rise by 11-14% [6][24] Income and Expense Trends - Non-interest income increased by 25%, primarily driven by commercial banking and disbursement fees, while non-interest expense growth moderated to 4% due to lower deposit costs [1][8] - In Q4, net interest income was $766 million, up from the previous quarter, while net interest margin slightly compressed to 3.51% [11] Credit Quality and Capital - Asset quality remained stable, with net charge-offs at $44.6 million, or 31 basis points of average loans, and the allowance for funded loans fully covering non-performing loans at 102% [14][17] - The company reported a tangible common equity to tangible assets ratio of 7.3% and a CET1 ratio of 11%, consistent with management's targets [17][19] Strategic Outlook - The company plans to de-emphasize certain areas, such as residential loan growth, while focusing on specialized commercial and lower-cost deposit initiatives [20] - Management expressed confidence in the bank's organic growth strategy and earnings momentum heading into 2026 [21]

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 a return on average tangible common equity of 16.9% [5] - 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 [10][11] - Non-interest income rose 25%, primarily driven by stronger commercial banking and disbursement fees [10] Business Line Data and Key Metrics Changes - HFI loan growth was $5 billion, or 9%, across regional banking and specialized C&I verticals, with deposits increasing by $10.8 billion, or 16% [6][14] - Mortgage banking revenues were relatively stable, only down $5 million compared to the prior quarter, with expectations for stronger results in 2026 due to favorable regulatory changes and mortgage rate reductions [7] - Operating leverage was significant, with net revenue growth outpacing non-interest expense growth by four times [8] Market Data and Key Metrics Changes - Total deposits were essentially flat for Q4, but exceeded expectations for the full year, increasing by $10.8 billion, which was nearly $2.5 billion above revised guidance [13] - Regional Banking deposits grew by $1.4 billion in Q4, with notable contributions from Innovation Banking and Specialty Escrow Services [15] Company Strategy and Development Direction - The company is focused on organic growth, with expectations for loan growth of $6 billion and deposit growth of $8 billion in 2026, supported by a healthier macro backdrop and accommodative regulatory environment [24] - Continued investments in preparing for large financial institution status are expected to yield benefits without a notable increase in expenses [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong earnings momentum for 2026, citing macroeconomic tailwinds and a constructive sentiment among commercial clients [24] - The company anticipates net charge-offs to remain elevated in the first half of the year as it works through non-accrual loans, with a proactive approach to managing asset quality [8][26] Other Important Information - The company issued $400 million of subordinated debt to bolster its total capital ratio, which now stands at 14.5% [21] - Tangible book value per share increased by 17.3% year-over-year to $61.29, reflecting strong growth in organic retained earnings [21] 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, with adjustments possible if projections prove conservative [31] Question: Charge-off expectations - Charge-offs are expected to be slightly higher in the first half of the year as the company addresses non-accrual loans, with a target midpoint for modeling purposes set at 30 basis points [34] Question: Non-interest income sustainability - The strength in non-interest income is attributed to treasury management and digital disbursements, with expectations for continued growth in these areas [39] Question: ECR deposit expectations - ECR deposits currently make up about 37% of total deposits, with expectations for the mix to hold constant while aiming to push more towards non-ECR deposits [52] Question: Provisioning and allowance updates - The allowance for funded loans is expected to drift up into the low 80s basis points, driven by C&I loan growth and non-accrual loan management [65]

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% [5] - 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 [10] - Non-interest income rose 25%, primarily driven by stronger commercial banking and disbursement fees [10] Business Line Data and Key Metrics Changes - HFI loan growth for the full year was $5 billion, or 9%, with deposits increasing by $10.8 billion, or 16% [6] - Mortgage banking revenues were relatively stable, only down $5 million compared to the prior quarter, with expectations for stronger results in 2026 due to favorable regulatory changes and mortgage rate reductions [7] - Regional Banking posted about $1 billion of loan growth, with significant contributions from Innovation Banking and hotel franchise finance [14] Market Data and Key Metrics Changes - Total deposits were essentially flat for the quarter, with notable growth in Regional Banking deposits, which increased by $1.4 billion [15] - The mix of ECR deposits is expected to hold constant, with around 37% of total deposits being ECR on an average basis [52] - The bank's total assets expanded to approximately $93 billion, with total equity ending the year at $8 billion [14] Company Strategy and Development Direction - The company aims to cross $100 billion in assets by year-end 2026 while maintaining steady expense growth [8] - The focus is on organic growth, with loan growth projected at $6 billion and deposit growth at $8 billion for 2026 [24] - The company is investing in new business lines and technology to support future growth, with a strong emphasis on operational efficiency [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong earnings momentum for 2026, supported by a healthier macro backdrop and accommodative regulatory environment [24] - The outlook includes expectations for net interest income growth of 11%-14% and non-interest income growth of 2%-4% [25] - Management anticipates net charge-offs to be between 25 and 35 basis points as they work through non-accrual balances [26] Other Important Information - The company issued $400 million of subordinated debt to bolster its total capital ratio [21] - Tangible book value per share increased by 17.3% year-over-year to $61.29, reflecting strong organic earnings [21] - The efficiency ratio improved, with a Q4 efficiency ratio of 55.7% [11] 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 leads the peer group and reflects organic growth [31] Question: Charge-off expectations - Charge-offs are expected to be slightly higher in the first half of the year as the company works to reduce non-accrual loans [34] Question: Non-interest income sustainability - The strength in non-interest income is driven by treasury management and digital disbursements, with expectations for continued growth [39] Question: ECR deposit expectations - ECR deposits are expected to hold constant in mix, with a beta of 65%-70% on ECR deposits [54] Question: Loan origination spreads - The company is experiencing competitive pressures but maintains a focus on quality and operational efficiency [57]

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 ...