The following is a summary of the Western Alliance Bancorporation (WAL) Q1 2024 Earnings Call Transcript:
Financial Performance:
Western Alliance Bancorporation reported a net income of $177 million with an EPS of $1.60, increasing to $1.72 excluding a special FDIC assessment charge.
The bank generated $599 million in net interest income, up $7 million QoQ, due to higher average earning asset balances and lower average borrowings.
A substantial QoQ increase in non-interest income was seen, rising to $130 million, driven mainly by mortgage banking performance.
The bank also reported a decrease in the effective tax rate to 23.5%, down from a temporarily elevated rate in the previous quarter.
Notably, tangible book value per share increased to $47.30.
Business Progress:
Exceptional deposit growth was observed, with an increase of $6.9 billion, allowing the bank to achieve their CET1 capital target of 11% and lower their loan-to-deposit ratio to 81%.
Liquidity enhancement efforts led to a $6.5 billion increase in unencumbered securities and cash.
Notable growth was in the HOA and Juris Banking businesses, contributing to an increase in outstanding deposits to $62.2 billion by quarter's end.
The bank has started a substantial repositioning and fortification of its balance sheet and liquidity.
Plans for 2024 include growth in loans and deposits with a focus on sound, safe, and thoughtful loans and a target for CET1 ratio steady at or near 11%.
The strategy also includes development of organic growth avenues and a projected increase in non-interest income by 10% to 20% and non-interest expense by 6% to 9%.
Fee income saw strong quarterly performance primarily from mortgage operations. Finally, efforts to grow non-interest bearing deposits and a strategic focus on organic growth over M&A are underway.
More details: Western Alliance Bancorp IR
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