Western Alliance Bancorporation Common Stock (DE)

Good day, everyone. Welcome to Western Alliance Bancorporation's second quarter 2026 earnings call. You may also view the presentation today via webcast through the company's website at www.westernalliancebancorporation.com. I would now like to turn the call over to Miles Pondelik, Director of Investor Relations and Corporate Development. Please go ahead, Miles.

Good day, everyone. Welcome to Western Alliance Bancorporation's second quarter 2026 earnings call. You may also view the presentation today via webcast through the company's website at www.WesternAllianceBancorporation.com. Our speakers today are Ken Vecchione, Chairman, President, and Chief Executive Officer, and Vishal Adnani, 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 risks, uncertainties, and assumptions. Except as required by law, the company does not undertake any obligation update in a forward-looking statement. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, please refer to the company's SEC filings, including the Form 8K filed yesterday, which are available on the company's website. Now for opening remarks, I'd like to turn the call over to Ken Vecchione. Thanks, Miles.

Good afternoon, everyone. I'll make some brief comments about our second quarter performance before handing the call over to Vishal to discuss our financial results and drivers in more detail. After reviewing our revised 2026 outlook, Dale, Tim, and Lynn will join us for Q&A. I am very pleased with Western Alliance's strong second quarter performance. and our early execution against the objectives outlined at investor day. Results were highlighted by broad-based CNI-driven loan growth, strong net interest income, PPNR expansion, stable net interest margin, and continued balance sheet strength. Credit trends remained constructive with criticized assets and net charge-offs both declining from prior quarter. Ongoing resolution activity gives us confidence that non-accrual loan balances will improve meaningfully during the second half of 2026. Just as important, we have already begun executing several key strategic initiatives we discussed in May, including deposit optimization efforts designed to enhance profitability and a more robust share repurchase program supported by our strengthening capital position. As we approach the $100 billion asset milestone later this year, West Alliance is entering its next phase from a position of strength, combining industry-leading growth, improving profitability, and increased capital returns to drive long-term shareholder value. Turning to our financial results, quarterly health or investment loan growth of $1.8 billion was led by C&I growth across our commercial platforms. As discussed at Investor Day, we began executing our deposit optimization strategy during the quarter. Thank you for joining us today. on a linked quarter annualized basis compared to 14% year-over-year growth. This performance was achieved while maintaining a stable net interest margin. Quarterly non-interest income of $199 million was consistent with adjusted Q1 fee income which excludes securities gains of $50.5 million. Mortgage banking improved from prior quarter, though higher rates and tighter spreads are creating headwinds. Overall, we generated strong operating leverage as total revenue growth outpaced total expense growth by a 3-1 margin, excluding last year's quarter securities gains. In total, PPNR increased 25% year-over-year to $412 million. Asset quality remains stable. Reductions in criticized assets combined with quarterly net charge-offs declining to 37 basis points Thank you for joining us today. Before handing the call over to Vishal, I'd like to briefly preview our revised 2026 management outlook. Since the disruptions in 2023, Western Alliance has delivered one of the strongest regional bank growth stories highlighted by predictable loan growth, ample liquidity, robust capital levels, and scaling PPNR. As a result, we remain confident in strategic objectives and medium-term financial targets outlined at investor day. A more balanced growth profile will create additional capacity for capital returns to shareholders. West Alliance shares trade at a meaningful discount to our estimate of intrinsic value and the earnings power of the franchise. Greater share repurchase activity around the current price represents an attractive investment in one of our highest returning assets, our own equity. Our competitive advantage going forward will be to pair industry-leading growth with disciplined capital allocations. So Shaul will now walk you through our results in more detail before I review the outlook.