Western Alliance Bancorporation (WAL) Q1 2026 earnings summary

Executive summary

• Q1 2026 net income was $189.2 million ($251.3 million adjusted), with EPS of $1.65 ($2.22 adjusted), reflecting strong deposit and loan growth but impacted by significant fraud-related charge-offs and credit loss provisions, partially offset by security sale gains.

• Total deposits grew $5.6 billion sequentially and $13.4 billion year-over-year, reaching $82.7 billion; loans held for investment increased $465 million sequentially and $4.4 billion year-over-year.

• Tangible book value per share rose 13% year-over-year to $61.14, and CET1 ratio remained stable at 11.0%.

• Asset quality remained stable, with classified assets ratio down to 1.08% and adjusted net loan charge-offs at 0.39%, though nonperforming loans to funded loans improved to 0.83%.

Financial highlights

• Net interest income was $766.3 million, up 17.8% year-over-year and flat sequentially, with net interest margin rising to 3.54%.

• Non-interest income increased to $252.6 million, driven by higher service charges, mortgage banking, and $50.5 million in gains from securities sales.

• Non-interest expense rose to $574.4 million, mainly from higher deposit costs and salaries.

• Provision for credit losses surged to $213.2 million, reflecting $152.5 million in fraud-related charge-offs.

• Efficiency ratio improved to 55.8% (47.5% adjusted), down from 63.5% a year ago.

Outlook and guidance

• 2026 guidance reiterates $6 billion HFI loan growth and $8 billion deposit growth targets, with net interest income growth projected at 11%-14%, now expected toward the upper end of the range.

• Non-interest income (excluding securities gains) expected to grow 13%-17%, driven by Juris Banking and mortgage banking.

• Non-interest expense projected to rise 7%-11%, with operating expenses between $1.6-$1.65 billion, reflecting higher variable compensation and investments.

• Core net charge-off guidance reaffirmed at 25-35 basis points, excluding fraud-related items, with charge-offs expected to decline in H2.

• Effective tax rate outlook remains at 19%; CET1 ratio expected to remain around 11%.