Western Alliance Rallies As Results Ease Investor Concerns

Western Alliance Bancorp (WAL:US) stock is trading sharply higher on Wednesday after the regional lender reported better-than-feared Q1 results.

The earnings report is likely to ease investor concerns after last month’s banking scare. Most notable, WAL said its deposits rose $2 billion in a month ending April 14, assuaging investor fears about the future of the Arizona-based bank.

For the first quarter, the company reported an EPS of $1.28, missing the $2.09 consensus. However, the market mostly played the big bottom-line miss and instead opted to focus on deposits, which were reported at $47.6 billion.

Net interest income (NII), a closely-watched financial metric for banks, came in at $609.9 million, ahead of the expected $592.8M. The common equity Tier ratio stood at 9.4%, slightly missing the 9.5% expectations.

The company said it expects its deposits to rise by $2 billion each quarter over 2023.

“While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized with end of quarter deposits of $47.6 billion,” the management said in a press release.

Speaking about the outlook, the company added:

“As we travel through the year and into 2024, capital expectations are targeted against a higher CET1 ratio at or above 11% with greater liquidity to be evidenced by a loan-to-deposit ratio in the mid-80% range. Balance sheet and earnings trajectory will be informed by these guideposts.”

Earlier this week, Congress member Daniel Goldman reported the sale of WAL shares in March.