Western Alliance Bancorporation(WAL) - 2025 Q3 - Quarterly Results

Executive Summary Quarter Highlights Western Alliance reported solid third-quarter 2025 results with strong net income and EPS growth, supported by healthy balance sheet expansion, stable margins, and record PPNR, while maintaining asset quality Quarter Highlights | Metric | Value | | :--- | :--- | | Net income | $260.5 million | | Earnings per share | $2.28 | | PPNR | $393.8 million | | Net interest margin | 3.53% | | Efficiency ratio | 57.4% | | Efficiency ratio (adjusted for deposit costs) | 47.8% | | Book value per common share | $64.45 | | Book value per common share (excluding goodwill and intangibles) | $58.56 | CEO Commentary CEO Kenneth A. Vecchione highlighted strong Q3 2025 results with significant net income and PPNR growth, robust loan and deposit expansion, improved asset quality, and increased tangible book value per share - Net income of $261 million and earnings per share of $2.28, up 10.1% from last quarter and 26.7% year-over-year[2] - Record PPNR of $394 million, driven by healthy balance sheet growth, stable margins, and firming mortgage banking revenue[2] - Quarterly loan growth of $707 million and deposit growth of $6.1 billion, boosting total assets over $90 billion[2] - Asset quality performed in line with guidance, with total criticized assets declining $284 million quarterly and nonperforming loans to total assets ratio decreasing 2 basis points to 0.72%[2] - Tangible book value per share climbed 12.7% year-over-year to $58.56, with a CET 1 ratio of 11.3%[2] Financial Highlights (Linked-Quarter & Year-Over-Year) The company reported strong financial performance with significant increases in net income, net revenue, and PPNR, alongside growth in HFI loans, total deposits, and total equity, while asset quality metrics showed mixed changes Key Financial Highlights (QoQ vs. YoY) | Metric | Linked-Quarter Basis (Q3 2025 vs. Q2 2025) | Year-Over-Year (Q3 2025 vs. Q3 2024) | | :--- | :--- | :--- | | FINANCIAL HIGHLIGHTS: | | | | Net income | $260.5M, up 9.5% from $237.8M | $260.5M, up 30.4% from $199.8M | | Earnings per share | $2.28, up 10.1% from $2.07 | $2.28, up 26.7% from $1.80 | | Net revenue | $938.2M, up 10.9% ($92.3M) | $938.2M, up 14.0% ($115.1M) | | Non-interest expenses | Increase of 5.8% ($29.7M) | Increase of 1.3% ($7.0M) | | Pre-provision net revenue | $393.8M, up $62.6M from $331.2M | $393.8M, up $108.1M from $285.7M | | Effective tax rate | 17.0%, compared to 18.4% | 17.0%, compared to 20.7% | | FINANCIAL POSITION RESULTS: | | | | HFI loans | $56.6B, up $707M (1.3%) | Increase of $3.3B (6.2%) | | Total deposits | $77.2B, up $6.1B (8.6%) | Increase of $9.2B (13.5%) | | HFI loan-to-deposit ratio | 73.3%, down from 78.7% | 73.3%, down from 78.4% | | Total equity | $7.7B, up $283M (3.8%) | Increase of $1.0B (15.2%) | | LOANS AND ASSET QUALITY: | | | | Nonperforming (nonaccrual) loans to funded HFI loans | 0.92%, increased from 0.76% | 0.92%, increased from 0.65% | | Criticized loans | $1.3B, down $196M from $1.5B | $1.3B, down $40M from $1.3B | | Repossessed assets | $130M, down $88M from $218M | $130M, up $122M from $8M | | Annualized net loan charge-offs to average loans outstanding | 0.22%, flat from prior quarter | 0.22%, compared to 0.20% | | KEY PERFORMANCE METRICS: | | | | Net interest margin | 3.53%, flat from prior quarter | 3.53%, decreased from 3.61% | | Return on average assets | 1.13%, compared to 1.10% | 1.13%, compared to 0.96% | | Return on average tangible common equity | 15.6%, compared to 14.9% | 15.6%, compared to 13.8% | | Tangible common equity ratio | 7.1%, decreased from 7.2% | 7.1%, decreased from 7.2% | | CET 1 ratio | 11.3%, compared to 11.2% | 11.3%, compared to 11.2% | | Tangible book value per share | $58.56, an increase of 4.8% from $55.87 | $58.56, an increase of 12.7% from $51.98 | | Adjusted efficiency ratio | 47.8%, compared to 51.8% | 47.8%, compared to 52.7% | Financial Performance Analysis Net Interest Income and Margin Net interest income increased QoQ and YoY due to higher average interest-earning asset balances, with net interest margin remaining flat QoQ but decreasing YoY due to asset yields and liability rates Net Interest Income (NII) and Net Interest Margin (NIM) | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $750.4 | $697.6 | +7.6% ($52.8M) | $696.9 | +7.7% ($53.5M) | | Net Interest Margin | 3.53% | 3.53% | Flat | 3.61% | -0.08 pp | | Average Interest Earning Assets | $85,334 | $80,525 | +5.9% | $77,795 | +9.7% | - QoQ NII increase was primarily due to higher average interest earning asset balances, partially offset by an increase in average deposit balances[3] - YoY NII increase was driven by an increase in average interest earning asset balances and lower rates on deposits, partially offset by decreased yields on interest earning assets[3] - QoQ NIM was flat due to higher yields on HFI loans and lower rates on debt, offset by lower yields on investment securities[5] - YoY NIM decrease was primarily driven by the impact of a lower rate environment on interest earning asset yields, partially offset by lower rates on interest bearing liabilities[5] Provision for Credit Losses The provision for credit losses significantly increased QoQ and YoY, mainly reflecting net charge-offs, a specific reserve for the Cantor Group V loan, and qualitative overlays Provision for Credit Losses | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $80.0 | $39.9 | +$40.1 | $33.6 | +$46.4 | - The increase in provision was primarily reflective of net charge-offs of $31.1 million, establishment of an approximate $30 million reserve related to the Cantor Group V loan, and qualitative overlays[4] Non-Interest Income and Expense Non-interest income grew substantially QoQ and YoY, driven by mortgage activities and fair value adjustments, while non-interest expense also rose, but the adjusted efficiency ratio improved significantly Non-Interest Income and Expense | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Non-interest Income | $187.8 | $148.3 | +$39.5 | $126.2 | +$61.6 | | Non-interest Expense | $544.4 | $514.7 | +$29.7 | $537.4 | +$7.0 | | Adjusted Efficiency Ratio | 47.8% | 51.8% | -4.0 pp | 52.7% | -4.9 pp | - QoQ non-interest income increase was primarily due to increases in net gain on mortgage loan origination and sale activities ($36.1 million), fair value gain adjustments ($8.2 million), and other non-interest income ($13.1 million, mainly rental income from OREO properties), partially offset by a decrease in net loan servicing revenue ($19.2 million)[6] - QoQ non-interest expense increase was primarily due to an increase of $27.7 million in deposit costs and $13.6 million in salaries and employee benefits, partially offset by a decrease of $12.9 million in insurance costs[8] - YoY non-interest expense increase was primarily attributable to increased salaries and employee benefits ($35.7 million), data processing costs ($9.4 million), and other non-interest expense ($9.6 million), partially offset by decreased deposit costs ($32.9 million) and insurance costs ($10.9 million)[8] Net Income and Earnings Per Share The company reported strong growth in net income and diluted earnings per share, both quarter-over-quarter and year-over-year Net Income and EPS | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $260.5 | $237.8 | +$22.7 | $199.8 | +$60.7 | | Diluted EPS | $2.28 | $2.07 | +$0.21 | $1.80 | +$0.48 | Pre-Provision Net Revenue (PPNR) Pre-provision net revenue (PPNR), a key indicator of earnings power, showed significant increases both quarter-over-quarter and year-over-year Pre-Provision Net Revenue (PPNR) | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | PPNR | $393.8 | $331.2 | +$62.6 | $285.7 | +$108.1 | Financial Position Analysis Loans (HFI and HFS) Held-for-investment (HFI) and held-for-sale (HFS) loans both increased significantly, driven by growth in commercial and industrial, commercial real estate non-owner occupied, and residential real estate loans Loan Balances | Metric | Sep 30, 2025 (in billions) | Jun 30, 2025 (in billions) | Change (QoQ) | Sep 30, 2024 (in billions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | HFI loans, net of deferred fees | $56.6 | $55.9 | +$707 million | $53.3 | +$3.3 billion | | HFS loans | $3.5 | $3.0 | +$480 million | $2.3 | +$1.2 billion | - QoQ HFI loan increase was primarily driven by increases in commercial and industrial ($814 million), commercial real estate non-owner occupied ($232 million), and residential real estate loans ($186 million), partially offset by a decrease in construction and land development loans ($461 million)[12] - YoY HFI loan increase was primarily driven by increases in commercial and industrial ($3.2 billion), commercial real estate non-owner occupied ($686 million), and residential real estate loans ($256 million), partially offset by decreases in construction and land development and commercial real estate owner occupied loans[12] - QoQ HFS loan increase was primarily driven by increases in government-insured or guaranteed ($359 million) and agency-conforming mortgage loans ($69 million)[12] Allowance for Credit Losses The allowance for loan losses and total allowance for credit losses as a percentage of funded HFI loans increased QoQ and YoY, reflecting a more conservative reserve methodology Allowance for Credit Losses Ratios | Metric | Sep 30, 2025 (%) | Jun 30, 2025 (%) | Sep 30, 2024 (%) | | :--- | :--- | :--- | :--- | | Allowance for loan losses to funded HFI loans | 0.78 | 0.71 | 0.67 | | Allowance for credit losses to funded HFI loans | 0.85 | 0.78 | 0.74 | | Allowance for credit losses to funded HFI loans (adjusted for covered reference pools) | 1.00 | 0.91 | 0.88 | - The company is protected from first credit losses on reference pools of loans totaling $8.2 billion as of September 30, 2025, through credit linked note transactions[13] Deposits Total deposits experienced substantial growth QoQ and YoY across various categories, leading to a decreased HFI loan-to-deposit ratio and improved liquidity Deposit Balances and Composition | Metric | Sep 30, 2025 (in billions) | Jun 30, 2025 (in billions) | Change (QoQ) | Sep 30, 2024 (in billions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Deposits | $77.2 | $71.1 | +$6.1 billion | $68.0 | +$9.2 billion | | Non-interest bearing deposits | $26.6 | $23.0 | +$3.6 billion | $25.0 | +$1.7 billion | | Savings and money market | +$2.4 billion (QoQ) | | +$5.1 billion (YoY) | | Interest-bearing demand | +$748 million (QoQ) | | +$2.6 billion (YoY) | | Certificates of deposit | -$635 million (QoQ) | | | | HFI loan-to-deposit ratio | 73.3% | 78.7% | -5.4 pp | 78.4% | -5.1 pp | Deposit Types as Percentage of Total Deposits | Deposit Type | Sep 30, 2025 (%) | Jun 30, 2025 (%) | Sep 30, 2024 (%) | | :--- | :--- | :--- | :--- | | Non-interest bearing | 34.5 | 32.3 | 36.7 | | Interest-bearing demand | 21.2 | 22.0 | 20.3 | | Savings and money market | 31.9 | 31.3 | 28.8 | | Certificates of deposit | 12.4 | 14.4 | 14.2 | Borrowings and Debt Total borrowings decreased QoQ due to reduced short-term borrowings but increased YoY from long-term borrowings, while qualifying debt decreased YoY due to subordinated debt repayment Borrowings and Qualifying Debt | Metric | Sep 30, 2025 (in billions) | Jun 30, 2025 (in billions) | Change (QoQ) | Sep 30, 2024 (in billions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings | $3.9 | $6.1 | -$2.2 billion | $3.0 | +$867 million | | Qualifying debt | $681 million | $678 million | +$3 million | $898 million | -$217 million | - QoQ decrease in borrowings was driven by a decrease in short-term borrowings[16] - YoY increase in borrowings reflected a $1.5 billion increase in long-term borrowings, partially offset by a $600 million decrease in short-term borrowings[16] - YoY decrease in qualifying debt was primarily due to the repayment of $225 million of subordinated debt during Q2 2025[17] Equity and Capital Ratios Total equity increased significantly, driven by net income and AOCI gains, partially offset by dividends and share repurchases, with strong capital ratios and robust tangible book value growth Equity and Capital Ratios | Metric | Sep 30, 2025 (in billions) | Jun 30, 2025 (in billions) | Change (QoQ) | Sep 30, 2024 (in billions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Equity | $7.7 | $7.4 | +$283 million | $6.7 | +$1.0 billion | | Common Equity Tier 1 (CET1) Ratio | 11.3% | 11.2% | +0.1 pp | 11.2% | +0.1 pp | | Tangible Common Equity (net of tax) | 7.1% | 7.2% | -0.1 pp | 7.2% | -0.1 pp | | Tangible Book Value Per Share | $58.56 | $55.87 | +4.8% | $51.98 | +12.7% | - QoQ increase in total equity was primarily due to net income of $260.5 million and net AOCI gains of $73 million, partially offset by cash dividends paid ($41.9 million common, $3.2 million depositary, $7.1 million preferred) and $25.0 million in share repurchases[18] - YoY increase in equity was primarily driven by net income and the issuance of preferred stock from the Company's REIT subsidiary, partially offset by dividends to stockholders[18] - Total capital was 14.2% of risk-weighted assets at September 30, 2025[19] Total Assets Total assets surpassed $90 billion, showing strong growth QoQ and YoY, primarily driven by deposit growth and increases in HFI and HFS loans Total Assets | Metric | Sep 30, 2025 (in billions) | Jun 30, 2025 (in billions) | Change (QoQ) | Sep 30, 2024 (in billions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | $91.0 | $86.7 | +$4.2 billion (+4.9%) | $80.1 | +13.6% | - QoQ increase in total assets was primarily driven by deposit growth, which contributed to increases in cash and HFI and HFS loans[19] - YoY increase in total assets was primarily driven by increases in HFI and HFS loans, cash, and investment securities[19] Asset Quality Provision and Net Charge-offs The provision for credit losses increased significantly, while net loan charge-offs remained stable QoQ but increased year-over-year Provision for Credit Losses and Net Charge-offs | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | Change (QoQ) | Q3 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $80.0 | $39.9 | +$40.1 | $33.6 | +$46.4 | | Net Loan Charge-offs | $31.1 | $29.6 | +$1.5 | $26.6 | +$4.5 | | Net Loan Charge-offs to Average Loans (annualized) | 0.22% | 0.22% | Flat | 0.20% | +0.02 pp | Nonaccrual and Past Due Loans Nonaccrual loans increased significantly, primarily due to the Cantor Group V loan, with loans past due 30-89 days also rising, while 90-day past due loans remained stable QoQ Nonaccrual and Past Due Loan Metrics | Metric | Sep 30, 2025 (in millions) | Jun 30, 2025 (in millions) | Change (QoQ) | Sep 30, 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Nonaccrual Loans | $522 | $427 | +$95 | $349 | +$173 | | Nonaccrual Loans to Funded HFI Loans | 0.92% | 0.76% | +0.16 pp | 0.65% | +0.27 pp | | Loans Past Due 90 Days (still accruing) | $49 | $51 | -$2 | $4 | +$45 | | Loans Past Due 30-89 Days (still accruing) | $196 | $175 | +$21 | $110 | +$86 | - The increase in nonaccrual loans was primarily driven by the migration of the Cantor Group V loan[22] Repossessed and Classified Assets Repossessed assets decreased QoQ but increased significantly YoY, while classified assets decreased QoQ but rose YoY, with the classified assets to Tier 1 capital plus ACL ratio improving QoQ Repossessed and Classified Assets | Metric | Sep 30, 2025 (in millions) | Jun 30, 2025 (in millions) | Change (QoQ) | Sep 30, 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Repossessed Assets | $130 | $218 | -$88 | $8 | +$122 | | Classified Assets | $1.1 billion | $1.3 billion | -$132 million | $838 million | +$291 million | | Classified Assets to Tier 1 Capital + ACL | 14.3% | 16.4% | -2.1 pp | 12.2% | +2.1 pp | Company Information & Disclosures Conference Call and Webcast Western Alliance Bancorporation will host a conference call and live webcast on October 22, 2025, at 12:00 p.m. ET to discuss its third-quarter 2025 financial results, with replay available until October 29, 2025 - Conference call and live webcast to discuss Q3 2025 financial results on Wednesday, October 22, 2025, at 12:00 p.m. ET[25] - Access via dialing 1-833-470-1428 (access code 834092) or live audio webcast at **https://events.q4inc.com/attendee/887299674**[25](index=25&type=chunk) - Replay available from October 22nd to October 29th by dialing 1-866-813-9403 (access code 978496)[25] Reclassifications Certain amounts in prior period Consolidated Income Statements have been reclassified to conform to the current presentation, with no effect on net income or stockholders' equity - Certain amounts in prior period Consolidated Income Statements reclassified to conform to current presentation[26] - Reclassifications have no effect on net income or stockholders' equity as previously reported[26] Use of Non-GAAP Financial Information The press release includes both GAAP and non-GAAP financial measures, which management uses to better understand the company's results, with reconciliations provided and non-GAAP measures not substituting GAAP results - Press release contains both GAAP and non-GAAP financial measures, used by management for understanding results[27] - Comparable GAAP financial measures and reconciliations are provided[27] - Non-GAAP disclosures should not be viewed as a substitute for GAAP operating results nor are they necessarily comparable to other companies' non-GAAP measures[27] Cautionary Note Regarding Forward-Looking Statements This section warns that the release contains forward-looking statements subject to risks, uncertainties, and changes that could cause actual results to differ materially from expectations, disclaiming any obligation to update these statements - The release contains forward-looking statements subject to risks, uncertainties, assumptions, and changes in circumstances[28] - Factors that could cause actual results to differ include adverse developments in the financial services industry, liquidity sufficiency, changes in economic conditions, geopolitical conflicts, inflation, interest rate fluctuations, increased competition, higher loan defaults, and regulatory changes[28] - The company disclaims any duty or obligation to update or revise any forward-looking statements, except as required by federal securities laws[29] About Western Alliance Bancorporation Western Alliance Bancorporation (NYSE:WAL) is a top-performing banking company with over $90 billion in assets, offering tailored commercial banking solutions and consumer products, recognized for its service and leadership - Western Alliance Bancorporation (NYSE:WAL) has over $90 billion in assets and is recognized as one of the country's top-performing banking companies[30] - Through Western Alliance Bank, it provides tailored commercial banking solutions and consumer products[30] - Accolades include being ranked a top U.S. bank in 2024 by American Banker and Bank Director, and 1 rankings on Extel's All-America Executive Team Midcap Banks 2024 for Best CEO, Best CFO, and Best Company Board of Directors[30] Contacts Contact information for investor relations (Miles Pondelik) and media relations (Stephanie Whitlow) is provided - Investors contact: Miles Pondelik, 602-346-7462, MPondelik@westernalliancebank.com[31] - Media contact: Stephanie Whitlow, 480-998-6547, SWhitlow@westernalliancebank.com[31] Consolidated Financial Data Selected Balance Sheet Data The company's balance sheet shows significant year-over-year growth in total assets, loans held for sale, HFI loans, investment securities, total deposits, borrowings, and total equity Selected Balance Sheet Data (As of September 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change % | | :--- | :--- | :--- | :--- | | Total assets | $90,970 | $80,080 | 13.6 % | | Loans held for sale | 3,502 | 2,327 | 50.5 | | HFI loans, net of deferred fees | 56,646 | 53,346 | 6.2 | | Investment securities | 18,841 | 16,382 | 15.0 | | Total deposits | 77,247 | 68,040 | 13.5 | | Borrowings | 3,862 | 2,995 | 28.9 | | Qualifying debt | 681 | 898 | (24.2) | | Total equity | 7,690 | 6,677 | 15.2 | | Tangible common equity, net of tax (1) | 6,453 | 5,723 | 12.8 | | Common equity Tier 1 capital | 6,736 | 6,126 | 10.0 | Selected Income Statement Data The income statement reflects strong year-over-year growth in net interest income, non-interest income, and net income for both the three and nine months ended September 30, 2025, with provision for credit losses also increasing significantly Selected Income Statement Data (Three and Nine Months Ended September 30, in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Change % (3M) | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | Change % (9M) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Interest income | $1,225.5 | $1,200.0 | 2.1 % | $3,475.5 | $3,402.5 | 2.1 % | | Interest expense | 475.1 | 503.1 | (5.6) | 1,376.9 | 1,450.1 | (5.0) | | Net interest income | 750.4 | 696.9 | 7.7 | 2,098.6 | 1,952.4 | 7.5 | | Provision for credit losses | 80.0 | 33.6 | NM | 151.1 | 85.9 | 75.9 | | Non-interest income | 187.8 | 126.2 | 48.8 | 463.5 | 371.3 | 24.8 | | Non-interest expense | 544.4 | 537.4 | 1.3 | 1,559.5 | 1,506.0 | 3.6 | | Income before income taxes | 313.8 | 252.1 | 24.5 | 851.5 | 731.8 | 16.4 | | Income tax expense | 53.3 | 52.3 | 1.9 | 154.1 | 161.0 | (4.3) | | Net income | 260.5 | 199.8 | 30.4 | 697.4 | 570.8 | 22.2 | | Net income available to common stockholders | $250.2 | $196.6 | 27.3 | $673.3 | $561.2 | 20.0 | | Diluted earnings per common share | $2.28 | $1.80 | 26.7 | $6.14 | $5.14 | 19.5 | Common Share Data and Performance Ratios Common share data shows increases in diluted EPS, book value per common share, and tangible book value per common share, with performance ratios indicating improved return on average assets and tangible common equity, and a lower efficiency ratio, while net interest margin slightly decreased YoY Common Share Data and Selected Performance Ratios (At or For the Three Months Ended September 30) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Diluted earnings per common share | $2.28 | $1.80 | 26.7 % | | Book value per common share | $64.45 | $57.97 | 11.2 | | Tangible book value per common share, net of tax (1) | $58.56 | $51.98 | 12.7 | | Return on average assets (2) | 1.13 % | 0.96 % | 17.7 % | | Return on average tangible common equity (1, 2) | 15.6 | 13.8 | 13.0 | | Net interest margin (2) | 3.53 | 3.61 | (2.2) | | Efficiency ratio | 57.4 | 64.5 | (11.0) | | Efficiency ratio, adjusted for deposit costs (1) | 47.8 | 52.7 | (9.3) | | HFI loan to deposit ratio | 73.3 | 78.4 | (6.5) | | Net charge-offs to average loans outstanding (2) | 0.22 % | 0.20 % | 10.0% | | Nonaccrual loans to funded HFI loans | 0.92 | 0.65 | 41.5 | | Nonaccrual loans and repossessed assets to total assets | 0.72 | 0.45 | 60.0 | | Allowance for loan losses to funded HFI loans | 0.78 | 0.67 | 16.4 | | Allowance for loan losses to nonaccrual HFI loans | 84 | 102 | (17.6) | Capital Ratios Capital ratios remained strong, with Common Equity Tier 1 (CET1) and Tier 1 Capital ratios showing slight improvements year-over-year, while the Tangible Common Equity ratio saw a minor decrease Capital Ratios (As of September 30) | Metric | Sep 30, 2025 (%) | Jun 30, 2025 (%) | Sep 30, 2024 (%) | | :--- | :--- | :--- | :--- | | Tangible common equity (1) | 7.1 | 7.2 | 7.2 | | Common Equity Tier 1 (3) | 11.3 | 11.2 | 11.2 | | Tier 1 Leverage ratio (3) | 8.1 | 8.4 | 7.8 | | Tier 1 Capital (3) | 12.4 | 12.3 | 11.9 | | Total Capital (3) | 14.2 | 14.1 | 14.1 | - Capital ratios for September 30, 2025, are preliminary[37] Detailed Financial Statements Condensed Consolidated Income Statements (Quarterly & YTD) This section presents the condensed consolidated income statements for the three and nine months ended September 30, 2025, and 2024, detailing interest income and expense, non-interest income and expense, provision for credit losses, and net income Condensed Consolidated Income Statements (Three and Nine Months Ended September 30, in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest income | $1,225.5 | $1,200.0 | $3,475.5 | $3,402.5 | | Interest expense | 475.1 | 503.1 | 1,376.9 | 1,450.1 | | Net interest income | 750.4 | 696.9 | 2,098.6 | 1,952.4 | | Provision for credit losses | 80.0 | 33.6 | 151.1 | 85.9 | | Non-interest income | 187.8 | 126.2 | 463.5 | 371.3 | | Non-interest expenses | 544.4 | 537.4 | 1,559.5 | 1,506.0 | | Net income | 260.5 | 199.8 | 697.4 | 570.8 | | Diluted earnings per share | $2.28 | $1.80 | $6.14 | $5.14 | Five Quarter Condensed Consolidated Income Statements This table provides a five-quarter trend of the condensed consolidated income statements, showing quarterly performance from September 30, 2024, to September 30, 2025, for key revenue, expense, and net income figures Five Quarter Condensed Consolidated Income Statements (in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total interest income | $1,225.5 | $1,154.4 | $1,095.6 | $1,138.6 | $1,200.0 | | Total interest expense | 475.1 | 456.8 | 445.0 | 472.1 | 503.1 | | Net interest income | 750.4 | 697.6 | 650.6 | 666.5 | 696.9 | | Provision for credit losses | 80.0 | 39.9 | 31.2 | 60.0 | 33.6 | | Total non-interest income | 187.8 | 148.3 | 127.4 | 171.9 | 126.2 | | Total non-interest expense | 544.4 | 514.7 | 500.4 | 519.0 | 537.4 | | Net income | 260.5 | 237.8 | 199.1 | 216.9 | 199.8 | | Diluted earnings per share | $2.28 | $2.07 | $1.79 | $1.95 | $1.80 | Five Quarter Condensed Consolidated Balance Sheets This table presents the condensed consolidated balance sheets for the past five quarters, from September 30, 2024, to September 30, 2025, showing trends in assets, liabilities, and equity Five Quarter Condensed Consolidated Balance Sheets (in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | $90,970 | $86,725 | $83,043 | $80,934 | $80,080 | | Loans held for sale | 3,502 | 3,022 | 3,238 | 2,286 | 2,327 | | Loans HFI, net of deferred fees | 56,646 | 55,939 | 54,761 | 53,676 | 53,346 | | Investment securities | 18,841 | 18,601 | 15,868 | 15,095 | 16,382 | | Total deposits | 77,247 | 71,107 | 69,322 | 66,341 | 68,040 | | Borrowings | 3,862 | 6,052 | 4,151 | 5,573 | 2,995 | | Total equity | 7,690 | 7,407 | 7,215 | 6,707 | 6,677 | Changes in the Allowance For Credit Losses on Loans This table details the changes in the allowance for loan losses and allowance for unfunded loan commitments over the past five quarters, including provisions, recoveries, and charge-offs, and presents key allowance ratios Changes in the Allowance For Credit Losses on Loans (Five Quarters, in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Allowance for loan losses, beginning of period | $394.7 | $388.6 | $373.8 | $356.6 | $351.8 | | Provision for credit losses (1) | 76.8 | 35.7 | 40.6 | 51.3 | 31.4 | | Total recoveries | 0.7 | 5.7 | 1.7 | 0.3 | 1.2 | | Total loans charged-off | 31.8 | 35.3 | 27.5 | 34.4 | 27.8 | | Net loan charge-offs | 31.1 | 29.6 | 25.8 | 34.1 | 26.6 | | Allowance for loan losses, end of period | $440.4 | $394.7 | $388.6 | $373.8 | $356.6 | | Allowance for unfunded loan commitments, end of period | $42.3 | $39.2 | $35.1 | $39.5 | $37.6 | | Total allowance for credit losses on loans | $482.7 | $433.9 | $423.7 | $413.3 | $394.2 | | Net charge-offs to average loans - annualized (%) | 0.22 | 0.22 | 0.20 | 0.25 | 0.20 | | Allowance for loan losses to funded HFI loans (3) (%) | 0.78 | 0.71 | 0.71 | 0.70 | 0.67 | | Allowance for credit losses to funded HFI loans (3) (%) | 0.85 | 0.78 | 0.77 | 0.77 | 0.74 | | Allowance for loan losses to nonaccrual HFI loans (%) | 84 | 92 | 86 | 79 | 102 | Asset Quality Metrics (Five Quarter) This table provides a five-quarter overview of key asset quality metrics, including nonaccrual loans, repossessed assets, past due loans, special mention loans, and classified assets, along with their respective ratios Asset Quality Metrics (Five Quarters, in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Nonaccrual loans | $522 | $427 | $451 | $476 | $349 | | Nonaccrual loans to funded HFI loans (%) | 0.92 | 0.76 | 0.82 | 0.89 | 0.65 | | Repossessed assets | $130 | $218 | $51 | $52 | $8 | | Nonaccrual loans and repossessed assets to total assets (%) | 0.72 | 0.74 | 0.60 | 0.65 | 0.45 | | Loans past due 90 days, still accruing (1) | $49 | $51 | $44 | $— | $4 | | Loans past due 30 to 89 days, still accruing (2) | $196 | $175 | $182 | $92 | $110 | | Special mention loans | $292 | $444 | $460 | $392 | $502 | | Classified loans on accrual | $476 | $615 | $693 | $480 | $479 | | Classified assets | $1,129 | $1,261 | $1,195 | $1,009 | $838 | | Classified assets to total assets (%) | 1.24 | 1.45 | 1.44 | 1.25 | 1.05 | Analysis of Average Balances, Yields and Rates (Quarterly & YTD) This section provides detailed tables analyzing average balances, yields, and rates for interest-earning assets and interest-bearing liabilities for the three and nine months ended September 30, 2025, compared to prior periods, illustrating the components of net interest income and margin Analysis of Average Balances, Yields and Rates (Three Months Ended September 30, 2025 vs. June 30, 2025) | Metric | Sep 30, 2025 Average Balance (in millions) | Sep 30, 2025 Average Yield / Cost (%) | Jun 30, 2025 Average Balance (in millions) | Jun 30, 2025 Average Yield / Cost (%) | | :--- | :--- | :--- | :--- | :--- | | Total interest earning assets | $85,334 | 5.74 | $80,525 | 5.80 | | Total HFI loans | $56,191 | 6.18 | $54,856 | 6.17 | | Total investment securities | $19,987 | 4.72 | $17,314 | 4.81 | | Total interest-bearing deposits | $49,568 | 3.19 | $47,527 | 3.19 | | Total interest-bearing liabilities | $55,728 | 3.38 | $53,899 | 3.40 | | Net interest income and margin | | 3.53 | | 3.53 | Analysis of Average Balances, Yields and Rates (Three Months Ended September 30, 2025 vs. September 30, 2024) | Metric | Sep 30, 2025 Average Balance (in millions) | Sep 30, 2025 Average Yield / Cost (%) | Sep 30, 2024 Average Balance (in millions) | Sep 30, 2024 Average Yield / Cost (%) | | :--- | :--- | :--- | :--- | :--- | | Total interest earning assets | $85,334 | 5.74 | $77,795 | 6.19 | | Total HFI loans | $56,191 | 6.18 | $52,755 | 6.65 | | Total investment securities | $19,987 | 4.72 | $16,546 | 4.89 | | Total interest-bearing deposits | $49,568 | 3.19 | $44,682 | 3.76 | | Total interest-bearing liabilities | $55,728 | 3.38 | $50,362 | 3.97 | | Net interest income and margin | | 3.53 | | 3.61 | Analysis of Average Balances, Yields and Rates (Nine Months Ended September 30, 2025 vs. September 30, 2024) | Metric | Sep 30, 2025 Average Balance (in millions) | Sep 30, 2025 Average Yield / Cost (%) | Sep 30, 2024 Average Balance (in millions) | Sep 30, 2024 Average Yield / Cost (%) | | :--- | :--- | :--- | :--- | :--- | | Total interest earning assets | $81,043 | 5.78 | $73,245 | 6.26 | | Total HFI loans | $54,866 | 6.18 | $51,093 | 6.74 | | Total investment securities | $17,543 | 4.72 | $15,244 | 4.82 | | Total interest-bearing deposits | $48,072 | 3.21 | $43,567 | 3.72 | | Total interest-bearing liabilities | $54,010 | 3.41 | $48,978 | 3.95 | | Net interest income and margin | | 3.51 | | 3.61 | Non-GAAP Financial Measures Reconciliation Pre-Provision Net Revenue (PPNR) Reconciliation This table reconciles net income to pre-provision net revenue (PPNR), a non-GAAP measure considered a key indicator of the company's earnings power, across five quarters Pre-Provision Net Revenue (PPNR) by Quarter (in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net interest income | $750.4 | $697.6 | $650.6 | $666.5 | $696.9 | | Total non-interest income | 187.8 | 148.3 | 127.4 | 171.9 | 126.2 | | Net revenue | $938.2 | $845.9 | $778.0 | $838.4 | $823.1 | | Total non-interest expense | 544.4 | 514.7 | 500.4 | 519.0 | 537.4 | | Pre-provision net revenue (1) | $393.8 | $331.2 | $277.6 | $319.4 | $285.7 | | Net income | $260.5 | $237.8 | $199.1 | $216.9 | $199.8 | Efficiency Ratio Reconciliation This table reconciles the GAAP efficiency ratio to the adjusted efficiency ratio (excluding deposit costs), a non-GAAP metric used to measure the company's efficiency, over five quarters Efficiency Ratio (Tax Equivalent Basis) by Quarter (in millions, except percentages) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total non-interest expense | $544.4 | $514.7 | $500.4 | $519.0 | $537.4 | | Less: Deposit costs | 175.1 | 147.4 | 136.8 | 174.5 | 208.0 | | Total non-interest expense, excluding deposit costs | 369.3 | 367.3 | 363.6 | 344.5 | 329.4 | | Total net interest income | 750.4 | 697.6 | 650.6 | 666.5 | 696.9 | | Tax equivalent interest adjustment | 9.7 | 10.2 | 10.2 | 10.0 | 10.0 | | Total non-interest income | 187.8 | 148.3 | 127.4 | 171.9 | 126.2 | | Less: Deposit costs | 175.1 | 147.4 | 136.8 | 174.5 | 208.0 | | Efficiency ratio (2) (%) | 57.4 | 60.1 | 63.5 | 61.2 | 64.5 | | Efficiency ratio, adjusted for deposit costs (2) (%) | 47.8 | 51.8 | 55.8 | 51.1 | 52.7 | Tangible Common Equity Reconciliation This table reconciles total equity to tangible common equity and tangible assets, providing a non-GAAP metric important for analyzing the company's financial condition and capital strength over five quarters Tangible Common Equity (in millions, except percentages and per share data) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total equity | $7,690 | $7,407 | $7,215 | $6,707 | $6,677 | | Less: Goodwill and intangible assets | 651 | 653 | 656 | 659 | 661 | | Preferred stock | 295 | 295 | 295 | 295 | 295 | | Noncontrolling interest in subsidiary | 293 | 293 | 293 | — | — | | Total tangible common equity | 6,451 | 6,166 | 5,971 | 5,753 | 5,721 | | Total tangible common equity, net of tax | $6,453 | $6,168 | $5,973 | $5,755 | $5,723 | | Total assets | $90,970 | $86,725 | $83,043 | $80,934 | $80,080 | | Tangible assets | 90,319 | 86,072 | 82,387 | 80,275 | 79,419 | | Total tangible assets, net of tax | $90,321 | $86,074 | $82,389 | $80,277 | $79,421 | | Tangible common equity ratio (3) (%) | 7.1 | 7.2 | 7.2 | 7.2 | 7.2 | | Tangible book value per share, net of tax (3) | $58.56 | $55.87 | $54.10 | $52.27 | $51.98 |