Western Alliance reports Q2 EPS of $2.36, up 6.3% on $1.8B loan growth and stable margin

Western Alliance reported Q2 2026 net income of $268.8 million and diluted earnings per share of $2.36, up 13.0% and 14.0% year-over-year respectively. Net income available to common stockholders was $258.5 million. The company's return on average tangible common equity was 15.3%, and return on average assets was 1.09%.

Total loans held for investment increased $1.8 billion quarter-over-quarter to $60.9 billion, driven primarily by $1.5 billion growth in Commercial & Industrial loans. Total deposits decreased $849 million to $0.1M as the company began executing its deposit optimization strategy to reduce higher-cost funding. Year-over-year, loans grew $5.0 billion (9.0%) and deposits grew $10.8 billion (15.2%).

Net interest income increased $30.6 million quarter-over-quarter to $796.9 million, primarily from average earning asset growth of $2.7 billion. The net interest margin decreased 1 basis point to 3.53%, as decreased yields on interest-earning assets were partially offset by lower funding costs. Year-over-year, net interest income increased $99.3 million or 14.2%.

The provision for credit losses was $80.4 million, primarily reflecting net charge-offs and loan growth. Net loan charge-offs were $55.0 million or 37 basis points of average loans, compared to $208.5 million or 145 basis points in Q1 (or $56.0 million / 39 basis points adjusted for two fraud-related charge-offs). The allowance for credit losses on loans increased to 0.89% of funded loans. Nonaccrual loans increased to 0.92% of funded loans from 0.83% in Q1, driven by the migration of a previously disclosed life science laboratory/office CRE loan.

The Common Equity Tier 1 ratio remained at 11.0%, while the tangible common equity to tangible assets ratio increased 20 basis points to 7.0%. Tangible book value per share increased $2.10 or 3.4% to $63.24, up 13.2% year-over-year. The company repurchased $2.3 million or 31,924 shares at an average price of $71.88 in Q2, and paid a quarterly common dividend of $0.42 per share.

Western Alliance reported net income of$$78.1 million and diluted EPS of$$75900002.2for Q2 2026, up 43.0% from Q1's reported$$75900002.2 (or up 6.3% from Q1's adjusted $2.22, which excluded a $126.4 million LAM loan charge-off partially offset by $50.5 million in security gains). The quarter-over-quarter improvement reflects lower provision for credit losses ($80.4 million vs. Q1's $213.2 million), driven by the absence of the large Q1 charge-off, and a 4% increase in net interest income from higher average earning assets.

Held-for-investment loans grew $1.8 billion (3.1%) in the quarter to $60.9 billion, primarily from $1.5 billion in commercial and industrial loan growth. Total deposits declined $849 million (1.0%) to $81.9 billion, reflecting the company's deposit optimization strategy to reduce higher-cost balances — savings and money market accounts fell $528 million, non-interest bearing deposits fell $258 million. The loan-to-deposit ratio rose to 74.4% from 71.5%.

Asset quality showed mixed trends: nonaccrual loans rose to 0.92% of funded HFI loans from 0.83% in Q1, but criticized loans declined $32 million to $1.3 billion and special mention loans fell $87 million to $316 million. Net charge-offs were 0.37% of average loans (annualized), down from Q1's adjusted 0.39% (or 1.45% including the LAM charge-off). The allowance for credit losses to funded HFI loans increased to 0.89% from 0.87%.

Tangible book value per share rose 3.4% to $63.24 from $61.14 in Q1 (up 2.9% year-over-year from $55.87), driven by net income. The CET1 ratio remained at 11.0%. Total equity increased $227 million to $8.1 billion, reflecting net income of $268.8 million partially offset by $45.9 million in common dividends ($0.42 per share), $3.2 million in preferred dividends, and $7.1 million in REIT subsidiary preferred dividends.

The company disclosed its second quarter 2026 financial results through a press release and earnings presentation. The 8-K itself does not contain the actual financial figures; those are in the attached exhibits (99.1 and 99.2). This is a standard quarterly earnings announcement filing.