Western Alliance (WAL) Q2 Earnings: Taking a Look at Key Metrics Versus Estimates

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]