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NEW YORK - Western Alliance Bancorporation (NYSE:WAL) shares rose 3% after the bank reported third-quarter earnings that surpassed analyst expectations, driven by strong balance sheet growth and improved mortgage banking revenue.
The Phoenix-based bank posted earnings per share of $2.28 for the third quarter, exceeding the analyst consensus estimate of $2.08. Net income reached $260.5 million, representing a 26.7% increase YoY and a 10.1% rise from the previous quarter. Total revenue climbed to $938.2 million, up 14% from the same period last year.
Western Alliance’s loan portfolio grew by $707 million during the quarter to $56.6 billion, a 6.2% increase YoY. Meanwhile, total deposits surged by $6.1 billion to $77.2 billion, representing a 13.5% jump from the year-ago period. The bank maintained a stable net interest margin of 3.53%, unchanged from the previous quarter but down from 3.61% a year earlier.
"Western Alliance achieved solid third quarter results with net income of $261 million and earnings per share of $2.28, up 10.1% from last quarter and 26.7% year-over-year," said Kenneth A. Vecchione, President and Chief Executive Officer. "Healthy balance sheet growth and stable margins supported continued expansion of net interest income, which, alongside firming mortgage banking revenue, generated record PPNR of $394 million."
The bank’s asset quality metrics showed mixed results, with nonperforming loans to funded loans increasing to 0.92% from 0.76% in the previous quarter. However, criticized loans decreased by $196 million to $1.3 billion. The bank maintained its net loan charge-offs at 0.22% of average loans, unchanged from the previous quarter.
Western Alliance established a $30 million reserve related to a non-accrual loan in its Cantor Group V portfolio, which contributed to an increase in its provision for credit losses to $80 million, up from $39.9 million in the previous quarter.
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