WAL - Western Alliance stock gains after deposit growth exceeds $2B QTD

2023-05-16 17:04:17 ET

Western Alliance Bancorporation ( NYSE: WAL ) stock climbed 8.3% in Tuesday after-hours trading after the regional bank said its quarter-to-date deposit growth exeeded $2B as of May 12, adding ~$200K since its May 11 update .

The Phoenix-based bank that has seen its stock sink 46% YTD , mostly since the failures of Silicon Valley Bank and Signature Bank, provided a QTD update and mapped out its plans to bolster its balance sheet and enhance its capital base.

Insured deposits increased to more than 79% of its deposits as of May 12, up from 68% as of March 31.

It expects the "imminent completion" of ~50% in sales of $6B of loans reclassified to held-for-sale in Q1 2023,

Held-for-investment loan/deposit ratio improved to ~94% as of May 12 vs. ~98% as of March 31.

Q2 asset sales have increased its CET1 ratio to 9.7% and TCE/TA to 6.7% as of April 30.

WAL plans to improve its loan/deposit ratio to the mid-80s, and seeks to push its CET1 ratio above 10% by June 30 through organic balance sheet repositioning and surgical asset sales.

Western Alliance ( WAL ) also emphasized its plans to reduce reliance on non-core funding by lowering Federal Home Loan Bank borrowings to a more normal level and repay the Bank Term Funding Program loan from the Federal Reserve.

In addition, it plans to prioritize integrated customer relationships to foster increased deposit "stickiness" and diversify deposits from Corporate Trust and indirecto consumer channel.

More on Western Alliance:

• BofA reinstates Western Alliance at Buy on strong business model, stock gains
• Relief rally for regional bank shares - Will it continue?
• Michael Burry's Scion buys bank and energy stocks in Q1, sells MGM, Skywest

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