In This Article:
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Pre-Provision Net Revenue: $278 million, a $31 million or 12% year-over-year increase.
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Net Interest Income: Grew 9% year-over-year to $651 million, declined $16 million quarter-over-quarter.
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Net Interest Margin: Held steady at 3.47%, declining only one basis point from the prior quarter.
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Adjusted Net Interest Margin: Expanded 17 basis points to 2.75%.
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Noninterest Income: Stable year-over-year at $127 million.
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Noninterest Expense: Reduced $19 million to $500 million from the prior quarter.
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Provision Expense: $31 million, significantly below Q4 levels of $60 million.
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Net Charge-Offs: Declined 5 basis points in the quarter to 20 basis points.
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Nonaccrual Loans: Declined by $25 million quarter-over-quarter to $451 million.
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Loan Growth: Ending held for investment balances $1.1 billion higher quarter-over-quarter.
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Deposit Growth: Grew $3 billion in Q1, mostly in noninterest-bearing accounts.
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Tangible Book Value Per Share: Increased 14% year-over-year.
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Common Equity Tier 1 (CET1) Ratio: Decreased approximately 13 basis points to 11.1%.
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Effective Tax Rate for 2025: Expected to be approximately 20%.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Western Alliance Bancorp (NYSE:WAL) reported a solid pre-provision net revenue of $278 million, marking a 12% year-over-year increase.
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Net interest income grew by 9% year-over-year to $651 million, driven by effective cost management and loan growth.
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The company maintained a stable net interest margin at 3.47%, with an adjusted net interest margin increasing by 17 basis points to 2.75%.
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Deposits grew by $3 billion in the first quarter, with significant contributions from noninterest-bearing accounts and specialty escrow services.
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Western Alliance Bancorp (NYSE:WAL) achieved a 14% year-over-year increase in tangible book value per share, supported by organic profitability and improved AOCI positions.
Negative Points
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Noninterest income remained relatively stable year-over-year, with a decline in mortgage banking revenue due to lower gain on sale margins.
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The company experienced a $186 million increase in classified assets, indicating potential credit quality concerns.
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Provision expense was $31 million, reflecting the need to bolster reserves for commercial real estate amidst macroeconomic volatility.
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Loan yields decreased by 14 basis points, reflecting pricing pressures and the impact of rate cuts on variable rate loans.
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Western Alliance Bancorp (NYSE:WAL) faces ongoing challenges in managing interest rate sensitivity, with expectations of two rate cuts before the end of 2025 impacting net interest income.