Executive Summary

Mixed print vs consensus: EPS of $1.79 modestly exceeded S&P Global consensus of ~$1.78*, while net revenue of $778.0M trailed the ~$793.2M* consensus as non-interest income softened; management emphasized sequential PPNR growth ahead supported by loan/deposit momentum .
Core fundamentals steady: NIM held at 3.47% (down 1 bp q/q), adjusted NIM expanded 17 bps (inclusive of deposit costs) as ECR costs fell; loans +$1.1B and deposits +$3.0B q/q; NPAs declined to 0.60% of assets with NCOs at 20 bps .
Guidance largely unchanged; expense/ECR tweaks: FY25 loan (+$5B) and deposit (+$8B) growth, NII and fee growth (+6–8%) reiterated; ECR costs nudged higher to $485–$535M (from $475–$525M), Q2 ECR guided to $140–$150M; tax rate trimmed to ~20% (from ~21%) .
Capital/liquidity resilient: CET1 11.1% with REIT preferred issuance ($293M net) boosting Tier 1 leverage to 8.6%; TBVPS rose to $54.10 (+3.5% q/q, +14.4% y/y) .

What Went Well and What Went Wrong

What Went Well
- Loan/deposit growth and stable asset quality: “Quarterly loan and deposit growth of $1.1 billion and $3.0 billion… Asset quality remained stable… net loan charge-offs… 0.20%” (CEO) .
- Adjusted margin dynamics improved: Adjusted NIM (inclusive of deposit costs) expanded 17 bps to ~2.75% as ECR costs declined; NIM only -1 bp q/q (CFO) .
- Capital build and book value accretion: Tangible book value per share rose to $54.10; REIT preferred raised Tier 1 leverage to 8.6% while CET1 stayed >11% .
What Went Wrong
- Revenue shortfall vs Street: Net revenue of $778.0M missed S&P consensus ~$793.2M* on softer non-interest income (mortgage banking and equity investments) .
- Higher adjusted expense ratio q/q: Adjusted efficiency ratio rose to 55.8% from 51.1% on seasonal compensation and lower non-interest income .
- Classified assets ticked up: Classified assets increased to $1.2B (1.44% of assets) even as NPAs fell; investors continue to scrutinize office/CRE migration and modest ACL ratio .

Financial Results

Overall P&L and profitability (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Revenue ($M)	$823.1	$838.4	$778.0
Diluted EPS ($)	$1.80	$1.95	$1.79
Net Interest Margin (%)	3.61	3.48	3.47
Adjusted Efficiency Ratio (%)	52.7	51.1	55.8
PPNR ($M)	$285.7	$319.4	$277.6

Vs S&P Global consensus (Q1 2025)

Metric	Consensus	Actual	Surprise
EPS ($)	$1.78*	$1.79	+$0.01 (~+0.6%)*
Revenue ($M)	$793.2*	$778.0	-$15.2 (~-1.9%)*

Values marked with * are from S&P Global; Values retrieved from S&P Global.

Drivers and YoY/qoQ context:

NII $650.6M (-$15.9M q/q; +$51.7M y/y) with the q/q decline largely due to a shorter day count; NIM 3.47% (-1 bp q/q) .
Non-interest income $127.4M (vs $171.9M in Q4), driven by lower gain on origination/sales (-$18.4M), equity investments (-$15.9M), and other income (-$5.6M) .
Provision $31.2M (vs $60.0M in Q4) reflecting $25.8M NCOs (20 bps), loan growth, and incremental qualitative adjustments in CRE/construction .

Key balance sheet and credit KPIs (oldest → newest)

KPI	Q3 2024	Q4 2024	Q1 2025
Loans HFI ($B)	53.346	53.676	54.761
Deposits ($B)	68.040	66.341	69.322
NCOs / Avg Loans (%)	0.20	0.25	0.20
NPAs / Total Assets (%)	0.45	0.65	0.60
CET1 (%)	11.2	11.3	11.1
TCE / Tangible Assets (%)	7.2	7.2	7.2
TBVPS ($)	51.98	52.27	54.10

Additional details:

Deposits +$3.0B q/q to $69.3B; non-interest-bearing rose to $22.0B; loan-to-deposit ratio improved to 79% .
REIT preferred issuance ($293M net) recognized as noncontrolling interest; lifted Tier 1 leverage to 8.6% .

Guidance Changes

Metric	Period	Previous Guidance (Q4’24 Call)	Current Guidance (Q1’25)	Change
Loans (HFI) growth	FY 2025	~+$5B	~+$5B (unchanged)	Maintained
Deposits growth	FY 2025	~+$8B	~+$8B (unchanged)	Maintained
Net Interest Income	FY 2025	+6% to +8% y/y	+6% to +8% y/y (unchanged)	Maintained
Non-interest income	FY 2025	+6% to +8% y/y	+6% to +8% y/y (unchanged)	Maintained
Non-interest expense (ex-deposit costs)	FY 2025	-1% to -6% y/y	0% to -5% y/y	Slightly less improvement
ECR-related deposit costs	FY 2025	$475–$525M	$485–$535M; Q2: $140–$150M	Raised
CET1	FY 2025	~11.3%	>11%	Slightly lower point estimate, still >11%
Net charge-offs	FY 2025	~20 bps	~20 bps (unchanged)	Maintained
Effective tax rate	FY 2025	~21%	~20%	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
NII & margin trajectory	Q3: NII +$40M q/q; NIM 3.61% (-2 bps) . Q4: NIM 3.48% on rate cuts; adjusted margin +4 bps q/q (CFO) .	NIM 3.47% (-1 bp); adjusted NIM +17 bps on ECR cost declines (CFO) .	Improving adjusted profitability despite flat reported NIM.
ECR deposit costs	Q3: Deposit costs drove higher expenses . Q4: ECR costs -$33.5M q/q to $174.5M .	Q1: Deposit costs $136.8M; Q2 ECR guided $140–$150M; full-year ECR $485–$535M (raised) .	Downtrend with seasonality; outlook slightly higher.
Asset quality / CRE office	Q3 NPAs 0.45% (down); classified assets up to $0.84B . Q4 NPAs rose to 0.65%; classified to ~$1.01B .	NPAs eased to 0.60%; classified assets up to $1.20B; collateral “as-is” valuations cited .	Stable NPAs; elevated classified being worked down.
Capital & funding	Q3 CET1 11.2%, TCE 7.2% . Q4 CET1 11.3% .	CET1 11.1%; REIT preferred lifted Tier 1 leverage to 8.6% .	Solid capital; leverage strengthened.
Mortgage banking	Q3: Mixed; MSR FV volatility . Q4: Mortgage revenue strong; GOS margin 21 bps .	Q1: Mortgage revenue $71.3M (down q/q); GOS margin 19 bps .	Choppy; seasonality and spreads matter.
Deposit mix	Q3: NIBD 36.7% with seasonal MW impact . Q4: NIBD 28.4% .	Q1: NIBD 31.8%; improved mix; LDR 79% .	Normalizing noninterest-bearing mix and LDR.

Management Commentary

“Western Alliance delivered solid first quarter results led by continued loan and deposit growth… PPNR of $277.6 million… Asset quality remained stable… earnings per share of $1.79… Tangible book value per share… $54.10 with a CET1 ratio of 11.1%.” – Kenneth Vecchione, CEO .
“Adjusted NIM, inclusive of deposit costs, expanded 17 bps… Our cost of interest-bearing deposits declined 23 bps… We continue to sustain momentum in lowering the bank’s cost of funding.” – Dale Gibbons, CFO .
“Deposits grew $3 billion in Q1, mostly in noninterest-bearing… specialty escrow and HOA contributed… tangible book value per share climbed 14% year-over-year.” – Dale Gibbons .

Q&A Highlights

ACL adequacy and investor perception: Management defended ACL methodology and overlays (Moody’s S4 adverse scenario for office), arguing reserves are appropriate and not a precursor to charge builds .
Fee income trajectory: Expect fee income to rise in 2H, supported by seasonal mortgage and treasury management/service charges; still modeling flat mortgage revenue y/y .
Capital strategy: REIT preferred designed to enhance Tier 1 leverage at a lower after-tax cost; subordinated debt call contemplated to mitigate preferred cost; buybacks not prioritized given growth opportunities and competitive CET1 signaling .
NII/margin cadence: Sequential NII growth expected in Q2/Q3; adjusted NIM to strengthen as ECR costs flatten then decline into Q3/Q4; reported NIM up gradually .
Loan growth timing/yields: Q2 loan growth to exceed Q1, often back-half weighted; loan pricing under pressure and rate cuts limit yield uplift .
ECR balances/rates: Q2 ECR higher largely on average balance; spreads not expected to rise further; ECR betas around ~81% over time .

Estimates Context

EPS modest beat; revenue miss: Q1’25 EPS $1.79 vs S&P consensus ~$1.78*; net revenue $778.0M vs S&P consensus ~$793.2M* .
Street adjustments: Given raised ECR cost outlook and Q1 non-interest income softness, models may trim near-term revenue/expense assumptions while holding FY NII/fee growth ranges pending Q2 ECR and loan growth cadence .