WAL - Western Alliance stock dips as NIM credit-loss provision weigh on Q2 results
2023-07-18 17:15:15 ET
Western Alliance Bancorporation ( NYSE: WAL ) stock gapped down 3.9% in Tuesday after-hours trading after the regional lender turned in lower net interest margin and a higher provision for credit losses for the second quarter, weighing on headline results.
Q2 EPS of $1.96 , matching Wall Street expectations, rose from $1.28 in the prior quarter and fell from $2.39 a year earlier.
Adjusted net revenue of $670.2M, exceeding the average analyst estimate of $655.5M, dipped from $712.2M in Q1 and advanced from $630.2M in Q2 of last year.
Net interest income was $550.3M, down from $609.9M in the previous quarter and up from $525.0M in the year-earlier quarter, reflecting an increase in average short-term borrowings, combined with higher interest rates, partially offset by higher yields on loans.
Net interest margin of 3.42% vs. 3.79% in Q1 and 3.54% in Q2 2022.
Amid heightened economic uncertainty, particularly in the commercial real estate market, WAL's provision for credit losses rose to $21.8M from $19.4M in Q1 and decreased from $27.5M a year before.
Noninterest expense of $387.4M compared with $347.9M in Q1 and $268.9M in the year-ago quarter. The Q/Q increase, Western Alliance ( WAL ) said, was mostly due to higher insurance costs in connection with elevated insured and brokered deposit levels. The Y/Y climb is attributable to higher deposit and insurance costs.
Total deposits of $51.0B rose from $47.6B at March 31, 2023. Held-for-investment loans, net of deferred fees, was $47.88B vs. $46.4B at the end of Q1.
Prior to selling off in extended trading, WAL had jumped nearly 8.1%.
More on Western Alliance Bancorporation:
- SA's Quant system rates WAL a Sell
- Western Alliance Bancorp: All Eyes On Q2 - Key Metrics To Watch
- Western Alliance: Excess Commercial Real Estate Exposure Should not Be Overlooked
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Western Alliance stock dips as NIM, credit-loss provision weigh on Q2 results