Western Alliance Bancorporation

Western Alliance reported Q2 net interest income of $797 million, up 4% sequentially and 14% year over year. EPS was $2.36, which was 6% above adjusted Q1 EPS of $2.22 and 14% above last year. Non-interest income was $199 million, and PP&R was $412 million, up 25% year over year. HFI loans grew $1.8 billion in the quarter, deposits declined by $849 million, NIM was relatively flat at 3.53%, and net charge-offs were 37 basis points. For 2026, management raised NII growth guidance to 12%-14% from 11%-14%, lowered total non-interest income growth guidance to 13%-17% from 20%-25%, kept deposit costs guidance at $650 million-$700 million, kept operating expense guidance at $1.6 billion-$1.65 billion, reaffirmed core NCO guidance at 25-35 bps, and set full-year tax rate guidance at 19%. It also revised loan growth to $5 billion, deposit growth to $6 billion, and said it plans $150 million of share repurchases in the back half of 2026.

Ken Vecchione framed the quarter as strong execution against Investor Day goals, emphasizing C&I-driven growth, stable margin performance, balance sheet strength, and improving credit trends. His tone was confident and explicit about a strategic shift: the company is deliberately slowing loan growth modestly and redirecting capital toward buybacks because he believes the stock trades at a meaningful discount to intrinsic value. He also said Western Alliance can still be one of the fastest growers in the peer set while increasing shareholder returns.

Vishal Idnani walked through the quarter’s financial drivers: NII of $797 million, non-interest income of $199 million, expense of $583 million, PP&R of $412 million, and EPS of $2.36. He highlighted that lower funding costs and a deposit remix helped keep NIM stable at 3.53%, while deposit optimization reduced higher-cost balances by over $1 billion near quarter end and another $1 billion early in Q3. He also noted tangible book value per share rose to $63.24, TCE/TA was 7%, CET1 stayed at 11%, and the allowance for loan losses increased to $487 million, or 80 bps of funded HFI loans.

Analysts focused heavily on the pivot from growth to buybacks, asking whether weaker loan/deposit opportunities or stock undervaluation drove the change. Management said it was a deliberate capital allocation choice: loan growth was reduced by $1 billion so more capital could be returned via repurchases, and they said they would keep reviewing the mix between growth and buybacks. Questions also centered on deposit costs and the ECR optimization program; management said roughly $3 billion of higher-cost deposits are targeted for remixing, costs should keep falling in Q3 and Q4, and the move will be gradual because client relationships must be managed carefully. Credit questions focused on the non-performing loan path and ACL build, and management said six credits are on track for resolution in the second half, non-accruals should decline, and the reserve should move up incrementally as the portfolio shifts more toward C&I.