On July 18, 2024, Western Alliance Bancorp (WAL, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance that exceeded analyst expectations. The Las Vegas-based holding company, which operates regional banks in Nevada, Arizona, and California, reported earnings per share (EPS) of $1.75, surpassing the analyst estimate of $1.70. The company also reported revenue of $771.8 million, exceeding the estimated $737.64 million.
Company Overview
Western Alliance Bancorporation is a diversified financial services company offering retail banking services, mortgages for retail customers, and commercial loans. The company operates through three segments: Commercial, Consumer Related, and Corporate & Other. The Commercial segment provides banking and treasury management services to small and middle-market businesses, while the Consumer Related segment offers commercial banking services to enterprises in consumer-related sectors and residential mortgage banking services.
Q2 2024 Financial Highlights
Western Alliance Bancorp (WAL, Financial) reported net income of $193.6 million for the second quarter of 2024, up 9.1% from $177.4 million in the previous quarter but down 10.2% from $215.7 million in the same quarter last year. The company's EPS of $1.75 represents a 9.4% increase from $1.60 in the previous quarter but a 10.7% decrease from $1.96 in the same quarter last year.
Income Statement and Key Metrics
Net interest income for the quarter totaled $656.6 million, a 9.6% increase from $598.9 million in the first quarter of 2024 and a 19.3% increase from $550.3 million in the second quarter of 2023. The company's net interest margin improved to 3.63%, up from 3.60% in the previous quarter and 3.42% in the same quarter last year.
Non-interest income was $115.2 million, down from $129.9 million in the previous quarter and $119.0 million in the same quarter last year. The decrease was primarily due to lower income from equity investments and net loan servicing revenue.
Net revenue for the quarter was $771.8 million, a 5.9% increase from $728.8 million in the previous quarter and a 15.3% increase from $669.3 million in the same quarter last year. Non-interest expense was $486.8 million, compared to $481.8 million in the previous quarter and $387.4 million in the same quarter last year.
Balance Sheet and Financial Position
As of June 30, 2024, Western Alliance Bancorp (WAL, Financial) reported total assets of $80.6 billion, up 4.7% from $77.0 billion at the end of the previous quarter and up 18.2% from $68.2 billion at the end of the same quarter last year. The company's HFI loans totaled $52.4 billion, a 3.4% increase from $50.7 billion in the previous quarter and a 9.5% increase from $47.9 billion in the same quarter last year.
Total deposits were $66.2 billion, up 6.5% from $62.2 billion in the previous quarter and up 29.8% from $51.0 billion in the same quarter last year. The company's HFI loan-to-deposit ratio was 79.1%, down from 81.5% in the previous quarter and 93.8% in the same quarter last year.
CEO Commentary
Western Alliance delivered strong second quarter results featuring robust net interest income growth, gathering loan momentum, and sustained deposit generation, said Kenneth A. Vecchione, President and Chief Executive Officer. With balance sheet repositioning actions completed, our focus is rededicated to generating safe, sound risk-adjusted growth supported by an enhanced liquidity profile and sturdy capital base.
Segment Performance
The Commercial segment reported an HFI loan balance of $31.0 billion, an increase of $1.4 billion during the quarter. Deposits for this segment totaled $25.3 billion, an increase of $180 million during the quarter. Pre-tax income for the Commercial segment was $128.4 million, a decrease of $15.2 million from the previous quarter.
The Consumer Related segment reported an HFI loan balance of $21.4 billion, an increase of $328 million during the quarter. Deposits for this segment totaled $34.5 billion, an increase of $4.0 billion during the quarter. Pre-tax income for the Consumer Related segment was $96.8 million, an increase of $4.0 million from the previous quarter.
Conclusion
Western Alliance Bancorp (WAL, Financial) has demonstrated strong financial performance in the second quarter of 2024, exceeding analyst estimates for both earnings and revenue. The company's robust net interest income growth, loan momentum, and deposit generation highlight its solid financial position and strategic focus on risk-adjusted growth. Investors and stakeholders will be keen to monitor how the company continues to navigate the evolving economic landscape.
Explore the complete 8-K earnings release (here) from Western Alliance Bancorp for further details.
