Western Alliance Bancorporation Common Stock (DE)

Good day, everyone. Welcome to Western Alliance Bank Corporation's first quarter 2025 earnings call. You may also view the presentation today via webcast through the company's website at westernalliancebankcorporation.com. I would now like to turn the call over to Myles Pondelik, Director of Investor Relations and Corporate Development. Please go ahead.

Thank you. Welcome to Western Alliance Bank's first quarter 2025 conference call. Our speakers today are Ken Vecchione, President and Chief Executive Officer, and Dale Gibbons, Chief Financial Officer. Before I hand the call over to Ken, please note that today's presentation contains forward-looking statements which are subject to risk, uncertainties, and assumptions, except those required by law. The company does not undertake any obligation to update any forward-looking statements. For a more complete discussion of the risks and uncertainties that could cause or actual results to differ materially, For many forward-looking statements, please refer to the company's SEC filings, including the form AKA filed yesterday, which are available on the company's website. Now for opening remarks, I'd like to turn the call over to Ken Beccione.

Thanks, Miles, and good afternoon, everyone. I'll make some brief comments about our first quarter earnings before handing the call over to Dale to review our financial performance and drivers in more detail. And then I'll close with some prepared remarks regarding our 2025 outlook. and our Chief Banking Officer for Regional Banking, Tim Partner, will then join us for Q&A. Before turning to our financial results, I want to thank the people of Western Alliance, as well as our customers and investors, for the many kind notes and well wishes received during my leave of absence. I also want to express my appreciation to the other members of the executive leadership team for managing the company during my absence. I'm feeling great and excited to be back at work. We often refer to Western Alliance as a bank for all seasons that is always ready to serve our commercial clients needs irrespective of the macro environment. This is because our extensive sector expertise enables us to evaluate and structure business around perceived risks. The significant diversification of our business lines means we are able to consistently support profitability and risk adjusted earnings while compounding tangible book value. In other words, we produce growth through all seasons. Different pistons in our growth engine fire at different times during the economic cycle, but the net result is consistent, safe, and sound loan and deposit growth, even during times of uncertainty like the present. Over the past two years, West Alliance has significantly increased its capital and liquidity to fortify our balance sheet against potential market fluctuations, ensuring we are all well prepared or any changes in the US economy, including from tariffs. We have preliminarily evaluated our borrowers and do not see a meaningful number of them with significant transaction volume with China, Canada, and Mexico, since Western Alliance serves US companies dependent on largely domestic supply chains with limited international exposure. Looking back on the first quarter, we are pleased with our execution that delivered financial results in line with expectations as we continue to prudently grow the balance sheet and maintain asset quality. Western Alliance's balance sheet growth supported solid pre-provision net revenue of $278 million, which equates to a $31 million or 12% year-over-year increase. Driving this increase was net interest income, which grew $52 million year-over-year, or 9%. NENITRA's income, inclusive of deposit costs, also grew $52 million year-over-year as ECR costs reverted to the prior year's first quarter level. NENITRA's margin held steady at 3.47%, declining only one basis point from the prior quarter, while adjusted NIM, inclusive of deposit costs, expanded 17 basis points to 2.75% as a result of our accelerated ECR cost reduction efforts. Asset quality was stable. Net charge-offs declined five basis points in the quarter to 20 basis points, which aligns with our full-year view. Provisioning for the quarter was $31 million, which was significantly below Q4 levels of $60 million. While classified assets rose $186 million, non-accrual loans declined by $25 million quarter-over-quarter to $451 million. and moved seven basis points lower as a percentage of funded HFI loans to 82 basis points. I know collateral values are affirmed by recent appraisals above loan values. Stan will now take you through the rest of the results in more detail.