Executive Summary

Record net revenue and PPNR; EPS rose sharply. Net revenue was $938.2M and PPNR $393.8M; diluted EPS was $2.28, up 10.1% QoQ and 26.7% YoY, with NIM stable at 3.53% .
Versus S&P Global consensus, EPS beat by $0.08 (actual $2.15 vs $2.07), while revenue missed by $29.4M (actual $858.2M vs $887.6M). Values retrieved from S&P Global.*
Deposits surged $6.1B to $77.2B, driving the loan-to-deposit ratio down to 73.3%; management guided Q4 ECR deposit costs to $140–$150M and raised FY deposit growth outlook to ~$8.5B .
Asset quality largely in line: NCOs at 0.22% annualized; criticized loans fell $196M, though nonaccruals rose $95M due to the Cantor Group V matter and a $30M specific reserve on a $98M note-financed loan .
Capital/corporate actions: CET1 was 11.3%; WAL repurchased $25.0M of shares through Oct. 17 under its $300M authorization; management discussed potential subordinated debt issuance to support buybacks .

What Went Well and What Went Wrong

What Went Well

Record operating performance: Net revenue rose 10.9% QoQ to $938.2M and PPNR hit a record $393.8M; CEO highlighted “solid third quarter results” and “record PPNR” .
Broad-based balance sheet growth: Deposits +$6.1B QoQ to $77.2B; HFI loans +$707M QoQ; L/D ratio improved to 73.3% .
Mortgage banking tailwinds: Non-interest income increased $39.5M QoQ, driven by a $36.1M increase in mortgage gain-on-sale; Q3 mortgage revenue ramped with lower rates .

Quote: “Healthy balance sheet growth and stable margins supported continued expansion of net interest income, which… generated record PPNR…” – Ken Vecchione .

What Went Wrong

Provision and NPLs increased: Provision rose to $80.0M (from $39.9M in Q2), with nonaccruals +$95M to $522M, reflecting Cantor Group V loan migration; allowance to loans increased to 0.85% .
Deposit costs elevated: Non-interest expense rose $29.7M QoQ, primarily from a $27.7M increase in deposit (ECR) costs tied to higher average ECR balances .
S&P revenue miss: S&P Global “Revenue” actual ($858.2M) fell short of consensus ($887.6M), despite company net revenue of $938.2M, highlighting a reporting basis discrepancy. Values retrieved from S&P Global.*

Financial Results

P&L summary (USD Millions) – periods ordered oldest → newest

Metric	Q1 2025	Q2 2025	Q3 2025
Net Revenue	$778.0	$845.9	$938.2
Net Interest Income	$650.6	$697.6	$750.4
Non-Interest Income	$127.4	$148.3	$187.8
Non-Interest Expense	$500.4	$514.7	$544.4
PPNR	$277.6	$331.2	$393.8
Provision for Credit Losses	$31.2	$39.9	$80.0
Net Income	$199.1	$237.8	$260.5
Diluted EPS	$1.79	$2.07	$2.28

Margins & Profitability

Metric	Q1 2025	Q2 2025	Q3 2025
Net Interest Margin	3.47%	3.53%	3.53%
Adjusted Efficiency Ratio (ex deposit costs)	55.8%	51.8%	47.8%
ROAA	0.97%	1.10%	1.13%
ROATCE	13.4%	14.9%	15.6%

Balance Sheet KPIs (USD Millions)

Metric	Q1 2025	Q2 2025	Q3 2025
HFI Loans (end of period)	$54,761	$55,939	$56,646
Total Deposits	$69,322	$71,107	$77,247
Loan-to-Deposit Ratio	79.0%	78.7%	73.3%
CET1 Ratio	11.1%	11.2%	11.3%
TCE Ratio	7.2%	7.2%	7.1%
Tangible Book Value/Share	$54.10	$55.87	$58.56

Non-Interest Income – Mortgage Banking Revenue

Metric	Q1 2025	Q2 2025	Q3 2025
Mortgage Banking Revenue ($USD Millions)	$71.3	$77.7	$94.6

Results vs S&P Global Consensus – Q3 2025

Metric	Consensus	Actual	Surprise
EPS (Primary)	$2.0737	$2.1517	+$0.0780 (beat)
Revenue ($USD)	$887.6M	$858.2M	-$29.4M (miss)

Values retrieved from S&P Global.*
Note: Company-reported net revenue was $938.2M .

Guidance Changes

Metric	Period	Previous Guidance (Q2’25)	Current Guidance (Q3’25)	Change
HFI Loan Growth	FY 2025	+$5.0B	+$5.0B	Maintained
Deposit Growth	FY 2025	+$8.0B	+$8.5B	Raised
Net Interest Income Growth	FY 2025	Up 8%–10%	Up 8%–10%	Maintained
Non-Interest Income Growth	FY 202x	Up 8%–10%	Up 12%–16%	Raised
Non-Interest Expense (ex ECR)	FY 2025	$1,495–$1,515M	$1,465–$1,505M	Lowered
ECR Deposit Costs	FY 2025	$550–$590M	$600–$610M	Raised
ECR Deposit Costs (Q3/Q4)	Quarterly	Q3: $170–$180M	Q4: $140–$150M	Added Q4, lower than Q3
Effective Tax Rate	Q4 2025	~20%	~20%	Maintained
Net Charge-Offs	FY 2025	~20 bps	~20 bps	Maintained
Net Interest Margin (full-year)	FY 2025	~upper 3.5%	~upper 3.5%	Maintained

Earnings Call Themes & Trends

Topic	Q1 2025 (Prev)	Q2 2025 (Prev)	Q3 2025 (Current)	Trend
ECR deposit costs & betas	ECR cost guide $485–$535M; spot IBD down 29 bps; adjusted NIM focus	ECR costs raised to $550–$590M; Q3 $170–$180M; deposit mix optimization	Q4 ECR costs $140–$150M; FY ECR now $600–$610M; ~70% beta commentary	Higher FY costs, expected Q4 relief
Mortgage banking outlook	Flat YoY; GO/Sale 19 bps; volumes rise sub-6.25% 30-yr mortgage	Still flat YoY; hedging gains offset vol; MSR revenue resilient	Q3 mortgage revenue ramp; seasonal Q4 moderation but improving 2026 outlook	Improving near-term, cautious seasonality
Asset quality/OREO	Criticized assets up; nonaccruals down; conservative reserves	OREO up as WAL took possession to accelerate resolution; criticized assets peaked	Criticized loans -$196M; nonaccruals +$95M (Cantor); OREO down to $130M QoQ	Stable-to-improving excluding Cantor
Regulatory/LFI readiness	Building toward $100B; investment embedded in expenses	Spend ~$35M ’25 and ’26; supportive of raising LFI threshold	Prepared to cross $100B; waiting on tailoring, could flex investment	Ongoing readiness, potential cost flex
NDFI/private credit exposure	Diversified, low-loss categories (warehouse/MSR); peers vs loss content	Note finance/private credit as opportunity; losses limited historically	Canter/Point Benita addressed; collateral coverage and low LTVs emphasized	Confidence reiterated
Capital actions/buybacks	Tier 1 leverage improved via REIT preferred	Considering sub debt to enhance buyback capacity; CET1 >11%	Repurchased $25M; CET1 11.3%; may issue sub debt and target ~11% CET1	Balanced growth and buybacks

Management Commentary

“Western Alliance achieved solid third quarter results with net income of $261 million and earnings per share of $2.28… record PPNR… Quarterly loan and deposit growth… boosted total assets over $90 billion.” – Ken Vecchione .
On Cantor Group V: “Our reserve methodology for a $98 million non-accrual loan resulted in a reserve of $30 million… we believe collateral coverage… guarantees… and up to $25 million of insurance coverage… will cover losses” .
Outlook: “We reiterate our loan growth outlook of $5 billion and raise year-end deposit growth expectations to $8.5 billion… NII remains on track for 8%–10%… Non-interest income… up 12%–16%… ECR-related deposit costs… $140–$150M in Q4… tax rate ~20%” .

Q&A Highlights

ECR betas and deposit mix: Management expects ~70% beta overall; higher beta on ECR-related deposits; HOA sector slower to reprice .
Buybacks and capital: WAL executed $25M of the $300M authorization; may issue subordinated debt to provide more latitude for buybacks while maintaining ~11% CET1 .
Mortgage seasonality: Q4 mortgage volumes seasonally dip 6–10%, but rate tailwinds support momentum; 2026 outlook improving .
OREO status: Operating income covers expenses; proactive leasing improves valuations; sale pipeline progressing; one property to ~71% occupancy .
NDFI risk: Emphasized low loss content (warehouse/MSR), strong collateral structures, low advance rates, and robust governance/controls; no expected losses in Point Benita; lien verifications underway for note finance .
Loan-to-deposit ratio: Management views mid-70s L/D as “a little too low,” seeking to deploy liquidity into sound loan growth .

Estimates Context

EPS beat: Actual $2.1517 vs consensus $2.0737 (+$0.0780).
Revenue miss: Actual $858.2M vs consensus $887.6M (-$29.4M).
Estimate breadth: 15 EPS estimates; 9 revenue estimates.

Values retrieved from S&P Global.*

Key Takeaways for Investors

Operating momentum: Strong QoQ acceleration in net revenue and PPNR, with stable NIM and improved efficiency; supports continued PPNR growth focus .
Balance sheet strength: Deposits +$6.1B QoQ; L/D ratio down to 73.3%, positioning WAL to deploy liquidity into higher-return loans .
Mortgage optionality: Q3 mortgage revenue ramped; while Q4 seasonality may moderate, lower rates and spread compression can drive upside into 2026 .
Asset quality watch: Ex-Cantor, criticized assets declined; NCOs steady at 22 bps; reserve increased to 0.85% with specific Cantor reserve and overlays .
ECR cost path: Despite higher FY ECR cost guide, Q4 ECR costs expected to decline; adjusted NIM and PPNR should benefit from deposit mix actions .
Capital deployment: CET1 at 11.3%; buybacks underway with potential sub debt issuance to optimize capital while maintaining growth capacity .
Regulatory flexibility: LFI readiness investments continue; potential tailoring shift could lower required spend near term, offering expense flexibility .

* S&P Global disclaimer: Values retrieved from S&P Global.

WESTERN ALLIANCE BANCORPORATION (WAL)·Q3 2025 Earnings Summary