In This Article:
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Earnings Per Share (EPS): $1.80
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Deposit Growth: $1.8 billion or 11% annualized
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HFI Loan Growth: $916 million or 7% annualized
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Net Interest Income: $697 million, increased by $40 million from Q2
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Net Interest Margin: Compressed by 2 basis points to 3.61%
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Non-Interest Income: $126 million, increased by $11 million quarter-over-quarter
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Pre-Provision Net Revenue: $286 million
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Net Income: $200 million
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Non-Interest Expense: $537 million
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Provision Expense: $34 million
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Net Charge-Offs: $27 million or 20 basis points
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Tangible Book Value Per Share: Increased 6.5% quarter-over-quarter to $51.98
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Non-Performing Assets to Total Assets: Declined 6 basis points to 45 basis points
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CET1 Ratio: Increased approximately 20 basis points to 11.2%
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Total Assets: Approximately $80 billion
Release Date: October 18, 2024
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) delivered solid third-quarter results with earnings of $1.80 per share, demonstrating the bank's ability to sustain diversified loan and deposit momentum.
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The bank achieved healthy deposit growth of $1.8 billion or 11% annualized, and HFI loan growth of $916 million or 7% annualized, despite sluggish demand for overall credit in the economy.
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Net interest income grew 25% annualized due to higher average earning assets, showcasing the bank's ability to capitalize on a changing rate environment.
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Non-interest income increased by $11 million or 10% quarter-over-quarter, driven by higher service charges and loan fees, indicating strong performance in commercial banking fees.
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Asset quality remains stable with non-performing assets to total assets declining 6 basis points to 45 basis points, and net charge-offs of 20 basis points landing within guidance range.
Negative Points
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Net interest margin compressed by 2 basis points due to lower yields on variable rate loans, indicating pressure on profitability.
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Q3 earnings were modestly impacted by elevated deposit costs due to $4 billion of mortgage warehouse deposit growth, which could affect future earnings if not managed.
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Provision expense of $34 million was necessary due to sustained loan growth and $27 million of net charge-offs, reflecting ongoing credit risk management challenges.
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The bank anticipates a temporary decline of $2 billion in deposits in Q4 due to typical seasonal outflows, which could impact liquidity management.
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Non-interest income growth was tempered by a decline in mortgage banking income, highlighting potential vulnerabilities in revenue streams.