Western Alliance Bancorporation : WAL 2024 Annual Report

Published: 2025-04-25 18:18:27 ET WAL

Clients continue to choose Western Alliance for our business banking expertise, customized solutions and outstanding, personalized service.

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National Reach' approach that drives stronger, deeper client relationships in every part of the bank."

Kenneth A. Vecchione

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Continued Growth

While Preparing for the Future

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Kenneth A. Vecchione

Dear Fellow Shareholders,

For Western Alliance, 2024 was a successful year dedicated to prudent balance sheet growth, thoughtful business investments and sustained earnings generation - all of which enhance our position as a leading national commercial bank.

Western Alliance's deep segment expertise and underwriting specialization - including a broad range of differentiated loan- and deposit-generating businesses - drove solid TIVJSVQERGI JSV XLI ]IEV 7MQYPXERISYWP] [I KVI[ JII MRGSQI GSQTPIXIH E WMKRMƼGERX liquidity build, bolstered capital, and continued fortifying our risk management posture. By reaching these targets in 2024, we achieved key milestones on our path to becoming a Large Financial Institution (LFI).

I am pleased that our balance sheet realignment created the strength to continue to grow earnings and capital, while meaningfully increasing our deposits and liquidity buffer last year. This key accomplishment sets the stage for even greater future growth. Our full-year VIWYPXW VIƽIGX XLI TS[IV SJ SYV GVIHMX ERH HITSWMX TPEXJSVQW ERH SYV KVS[MRK QSQIRXYQ in earning more fee income from clients. Collectively, these attributes position us for a sustained earnings growth trajectory into 2025 as we further drive down Cost of Deposits, ITERH SYV 2IX -RXIVIWX 1EVKMR MQTVSZI TVSƼXEFMPMX] KIRIVEXI WMKRMƼGERX STIVEXMRK leverage and move toward a higher-teens ROTCE.

For the year, Western Alliance produced Net Revenue of $3.2 billion (up 20.7% from $2.6 billion), Net Income of $788 million (up 9.0% from $722 million) and Earnings Per

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of our business model, Pre-Provision Net Revenue (PPNR) climbed 14.1% to $1.1 billion, with a Return on Tangible Common Equity of 14.0% that increased Tangible Book Value 4IV 7LEVI E RSXEFPI ]IEV SZIV ]IEV XS 7MKRMƼGERXP] SYV GSRWMWXIRX YT[EVH trajectory in Tangible Book Value Per Share remains a hallmark of Western Alliance and has exceeded peers by approximately 7x over the past decade.

3YV FEPERGI WLIIX VIEPMKRQIRX GVIEXIH the strength to continue to grow earnings and capital, while meaningfully increasing our deposits and liquidity buffer last year. This key accomplishment sets the stage for even greater future growth.

3YV JYPP ]IEV VIWYPXW VIƽIGX XLI TS[IV of our credit and deposit platforms and our growing momentum in earning more fee income from clients."

Dale M. Gibbons

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Thoughtful Balance Sheet Growth

Western Alliance focused on prudent balance sheet growth in 2024, reinforcing our strength as a leading national commercial bank poised to become a Large Financial Institution.

By design, our liquidity build prioritized growing deposits in excess of loans, which we then deployed into high-quality liquid assets. Deliberate actions to fortify our balance sheet included WMKRMƼGERXP] FSPWXIVMRK GETMXEP EHIUYEG] which increased our CET1 capital ratio by 50 basis points to 11.3% at year-end 2024.

This stout liquidity and capital foundation now positions the bank to resume greater risk-adjusted balance sheet growth going forward. As always, our business model - including our ongoing focus on growing fee income - provides Western Alliance with considerable agility for every environment.

In 2024, Western Alliance purposefully prioritized growing deposits in excess of loans and deployed this excess liquidity into high-quality liquid assets (HQLA). In total, HFI loans increased $3.4 billion, or 6.7%, while total deposits increased by $11.0 billion, or 19.9%, which lowered our HFI loan-to-deposit ratio to 80.9%.

Net Interest Income increased 12.0% year over year to $2.6 billion, while Net Interest Margin compressed by 5 basis points to 3.58% due to a greater proportion of Earning Assets being held in lower-yielding HQLA securities and higher deposit rates, offset by higher HFI loan balances and a $1.7 billion reduction in Borrowings. Throughout the year, we meaningfully reduced our Total Cost of Funds, and we continue to see funding cost tailwinds emerge.

Net Interest Income increased 12.0% year over year to $2.6 billion."

Non-Interest Income of $543 million rose $263 million for 2024 due to improved Mortgage Banking Revenue, stronger Commercial Banking fees and the impact of non-recurring balance sheet optimization efforts undertaken in 2023. Our Mortgage Banking Revenue KVI[ ]IEV SZIV ]IEV XS QMPPMSR EW %QIVM,SQI FIKER XS FIRIƼX JVSQ E stabilizing mortgage market, stronger Net Loan Servicing Revenue, and product MRZIWXQIRXW XS XET MRXS RI[ QSVXKEKI GYWXSQIVW [LMGL GSYPH FIRIƼX YW MR E LMKLIV mortgage rate environment. We continue to prioritize cultivating deeper client relationships through treasury management and other commercial banking services that should grow Non-Interest Income over time.

Overall, our asset quality remains resilient. For the year, Net Charge-Offs to average loans were 0.18%, with a nonperforming assets to total assets ratio of 0.65% at year-end 2024.

'SQTEVIH XS SYV FMPPMSR XS FMPPMSR EWWIX TIIV FEROW ;IWXIVR %PPMERGI FIRIƼXW from greater credit-linked notes support as well as a greater percentage of loans in the PS[ XS RS PSWW GEXIKSVMIW )QFPIQEXMG SJ E FEPERGI WLIIX [MXL E PS[ VMWO TVSƼPI SYV VMWO weighted assets to tangible assets ratio is one of the lowest among the largest U.S. banks at just under 70%.

Stephen R. Curley

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National Business Lines

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In 2024, Western Alliance continued to exceed commercial client expectations for a streamlined, responsive banking experience tailored to their needs. We have always offered clients an exceptionally high level of expertise. Behind the scenes, we reinforce that expertise with strategic technology MRZIWXQIRXW Ƃ ER IJJSVX [I EQTPMƼIH this year.

Our targeted initiatives harness technology enablement to operational excellence, focusing on approaches that facilitate granular deposit growth, drive fee income and create a competitive advantage for our lines of business. When IT and Operations teams work in W]RG [I MRGVIEWI SYV SZIVEPP IƾGMIRG] and enhance service speed and quality.

The result is differentiated, client-centric ƼRERGMEP TVSHYGXW ERH WIVZMGIW XLEX offer more for our customers, backed by fast, proactive problem-solving.

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Looking ahead, Western Alliance's proven attributes - including controlled growth, higher capital and liquidity levels, and our strategic positioning to grow in [IPP HIƼRIH WIKQIRXW Ƃ IREFPI YW XS WYGGIWWJYPP] GSRXMRYI SYV TVSKVIWW XS[EVH becoming an LFI. These longstanding strengths are set to deliver even greater shareholder value in the future.

Risk management is another organizational strength that builds value. In 2024, we continued our work to elevate our risk management capabilities to safeguard the bank against any future market disruptions. As we continue preparing to become a Category -: FERO MR XLI GSQMRK ]IEVW [I LEZI GSQTPIXIH WMKRMƼGERX JSYRHEXMSREP MRZIWXQIRXW in risk and treasury management, as well as data reporting capabilities. Every one of our stakeholder audiences has heard me say that risk management is a competitive differentiator when implemented and placed into service correctly. This is exactly what Western Alliance is working to achieve.

Other successes in 2024 include wins in business revenues, including adding new specialty areas within C&I, and enhancing our treasury management capabilities to cater XS QSVI GPMIRX RIIHW 7MQMPEVP] [I MQTVSZIH FSXL IƾGMIRG] ERH GPMIRX WIVZMGI XLVSYKL digital enablement and product alignment.

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These longstanding strengths are set to deliver even greater shareholder value in the future."

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Disclaimer

Western Alliance Bancorporation published this content on April 25, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 25, 2025 at 22:16 UTC.