Western Alliance Bancorp Draws Attention On Significant Jump In Q4 Profit: Retail’s Jubilant

The lender’s net interest income (NII) declined 4.4% sequentially, hurt by decreased yields on interest-earning assets.

Western Alliance Bancorp (WAL) stock gained retail attention on Tuesday after posting a 47.7% rise in quarterly profit.

On Monday, the Phoenix-based company reported a net income of $213.7 million, or $1.95 per share, for the fourth quarter, compared with $144.7 million, or $1.33 per share, in the year-ago quarter.

According to Koyfin data, the company’s net revenue of $838.4 million topped a Wall Street estimate of $803.9 million.

Its net interest income (NII) rose 12.6% to $666.5 million, backed by a rise in average interest-earning asset balances and a decrease in average short-term borrowings.

However, NII declined 4.4% sequentially, hurt by decreased yields on interest-earning assets.

The company’s provision for net losses during the fourth quarter jumped to $60 million from $9.3 million in the year-ago quarter due to an incremental qualitative adjustment to the commercial real estate portfolio.

Its net interest margin fell to 3.48% from 3.65% in the fourth quarter of 2023.

Western Alliance shares fell 5.5% on Tuesday.

Its loans held for investment (HFI) rose 0.6%, sequentially, while deposits fell 2.5%.

The company forecasted a 6% to 8% rise in NII in 2025.

Retail sentiment on Stocktwits jumped to ‘extremely bullish’ (89/100) territory from ‘neutral’(48/100) a day ago, while retail sentiment remained ‘extremely high,’ albeit with a higher score. 

Over the past year, the stock has gained 26.7%.

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