Western Alliance Bancorporation (WAL) Status update summary

Background and breach details

• A loan to a Point Bonita Capital fund managed by Leucadia Asset Management (Jefferies subsidiary) was performing and paid down from $337M to $126M before Jefferies directed cessation of payments.

• A forbearance agreement was in place since October 2025, with accelerated repayment terms after LAM TFG allowed UCC filings to lapse.

• Jefferies and Leucadia provided explicit assurances of repayment and acknowledged Point Bonita's ability to pay.

• The breach led to Western Alliance filing a formal complaint in NY Supreme Court against Jefferies, Leucadia Asset Management, and affiliates, asserting claims including fraud and breach of contract related to a commercial loan collateralized by accounts receivable from First Brands Group.

• The bank seeks to pierce the corporate veil and recover all damages, including clawbacks of payments and fees.

Legal and financial actions

• Filed a complaint in New York Supreme Court against Jefferies, Leucadia Asset Management, and affiliates for breach of contract and fraud.

• Charged off the remaining $126.4 million LAM I loan balance after Defendants failed to make agreed payments under a forbearance agreement.

• The charge-off will be matched by a provision of the same amount, with management pursuing legal remedies and evaluating other recovery pathways.

Financial impact and mitigation

• The $126.4M charge-off will be largely offset by $50M in securities gains (with $45M already booked), $50M in expense reductions, and $26M under review.

• Expense reductions include operational efficiencies, moderating LFI readiness, delaying expansion projects, and optimizing technology/vendor programs.

• No impact expected on full-year balance sheet targets or growth guidance; expense savings will build through the year.

• The CET1 ratio is expected to remain around 11% after mitigation actions, with after-tax impact projected to reduce CET1 by only 7 basis points.

• The remaining $26M shortfall is expected to be addressed through growth, pricing, stock repurchases, and other initiatives.