Western Alliance Bancorporation (WAL) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $199.8 million, with EPS of $1.80, up sequentially but down year-over-year; tangible book value per share rose 6.5% sequentially and 19.1% year-over-year to $51.98.

• Loans grew $916 million quarter-over-quarter and $3.9 billion year-over-year; deposits increased $1.8 billion sequentially and $13.8 billion year-over-year.

• Asset quality remained stable, with non-performing assets to total assets at 0.45% and net charge-offs at 0.20%.

• The company remains well-capitalized, with a CET1 ratio of 11.2% and tangible common equity ratio of 7.2%.

• Book value per common share rose 9.8% to $57.97 since year-end 2023.

Financial highlights

• Net revenue for Q3 2024 was $823.1 million, up 6.6% sequentially and 14.9% year-over-year.

• Net interest income increased $40 million from Q2 to $697 million, up 18.7% year-over-year; net interest margin declined to 3.61%.

• Non-interest income rose $11 million quarter-over-quarter, aided by service charges, loan fees, and securities gains.

• Non-interest expense rose 10.4% sequentially and 26.1% year-over-year, mainly due to higher deposit costs and salaries.

• Efficiency ratio (adjusted) was 52.7%, up from 51.5% sequentially and 50.0% year-over-year.

Outlook and guidance

• Q4 2024 loan growth expected at $1.25 billion; deposits to decline $2 billion due to seasonal outflows.

• Net interest income projected to decline ~3% in Q4, but ECR-related deposit costs expected to drop 25%.

• Non-interest income forecasted to rise 8%-12% in Q4; non-interest expense to decline 5%-9%.

• Net charge-offs expected to remain steady at 20 basis points in Q4 and for full year 2024; effective tax rate for 2024 estimated at 20%-22%.

• FY2024 outlook projects loan growth of $4.5 billion and deposit growth of $11.0 billion over YE 2023.