Zinger Key Points
- Western Alliance Q4 revenue grows 1.9% Y/Y to $838.4M, beating estimates; EPS hits $1.95 vs. $1.92 expected.
- Deposits down 2.5% Y/Y to $66.3B; non-interest income surges 90%, boosting diversified growth outlook.
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Western Alliance Bancorporation WAL shares are trading lower premarket on Tuesday. On Monday, the company reported fourth-quarter results, with sales rising 1.9% year-over-year (Y/Y) to $838.4 million, beating the consensus of $805.6 million.
Net interest income increased 12.6% Y/Y to $666.5 million in the fourth quarter 2024, led by higher average interest-earning asset balances and a decline in average short-term borrowings.
Net interest margin came in at 3.48%, a decline from 3.65% in the fourth quarter of 2023 owing to lower rate environment which led to lower yields on interest-earning assets.
Non-interest income surged to $171.9 million from $90.5 a year ago quarter, aided by higher net gain on loan origination and sale activities and net loan servicing revenue along with net gain on sales of investment securities and income from bank-owned life insurance.
EPS of $1.95 exceeded the street view of $1.92.
Total deposits declined 2.5% Y/Y to $66.3 billion, while HFI loans rose 0.6% Y/Y to $53.7 billion.
Provision for credit losses stood at $60.0 million in the fourth quarter of 2024 vs. $9.3 million in the fourth quarter of 2023, reflecting net charge-offs of $34.1 million and an incremental qualitative adjustment on the CRE portfolio.
Common equity tier 1 capital ratio stood at 11.3% as of December 31, 2024, compared to 11.2% and 10.8% as of September 30, 2024 and December 31, 2023, respectively.
Adjusted efficiency ratio came in at 51.1%, compared to 52.7% a year ago quarter.
”Western Alliance's diversified, national commercial business strategy continued to drive strong momentum in the fourth quarter with healthy earnings growth, sustained operating leverage, and resilient asset quality," said Dale Gibbons, interim CEO and CFO.
"Western Alliance's full year results are a direct reflection of the success of our credit and deposit platforms which position us for a sustained earnings trajectory into 2025, while continuing our focus on asset quality."
Investors can gain exposure to the stock via Invesco Dorsey Wright Financial Momentum ETF PFI and First Trust Dorsey Wright Momentum & Value ETF DVLU.
Price Action: WAL shares are down 3.20% at $90.99 premarket at the last check Tuesday.
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