Western Alliance Bancorporation (WAL) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $199.1 million, up 12.2% year-over-year, with EPS of $1.79, but both declined sequentially from Q4 2024.

• Total loans grew to $54.8 billion, up $4.1 billion year-over-year and $1.1 billion sequentially; total deposits reached $69.3 billion, up $7.1 billion year-over-year and $3.0 billion sequentially.

• Tangible book value per share increased 14.4% year-over-year to $54.10; CET1 ratio at 11.1%.

• Asset quality remained stable, with nonperforming assets at 0.60% of total assets and net loan charge-offs at 0.20% of average loans.

• Management remains focused on risk-adjusted earnings, prudent balance sheet growth, and compounding tangible book value.

Financial highlights

• Net interest income was $650.6 million, up 8.6% year-over-year but down $15.9 million sequentially due to fewer days and lower yields.

• Net interest margin was 3.47%, down from 3.60% a year ago and 3.48% last quarter.

• Non-interest income was $127.4 million, down 1.9% year-over-year and 26% sequentially, mainly from lower mortgage and loan servicing revenue.

• Non-interest expense was $500.4 million, up 3.9% year-over-year but down 3.6% sequentially.

• Pre-provision net revenue reached $278 million, up 12% year-over-year.

Outlook and guidance

• 2025 outlook projects $5.0 billion loan growth and $8.0 billion deposit growth, with net interest and non-interest income expected to rise 6–8% year-over-year.

• Non-interest expense expected to decline 0–5%, aided by lower ECR costs.

• Net charge-offs projected at approximately 20 basis points for the year; asset quality expected to remain stable.

• CET1 capital ratio expected to remain above 11%; effective tax rate for 2025 expected at approximately 20%.

• Assumes two 25 bps rate cuts in 2025; management highlights proactive monitoring and reserve building for CRE exposures.