Western Alliance Bancorp shares surged as much as 20% after the bank beat earnings estimates and said deposits recovered after the collapse of three regional banks raised questions about the health of the US financial system.
(Bloomberg) — Western Alliance Bancorp shares surged as much as 20% after the bank beat earnings estimates and said deposits recovered after the collapse of three regional banks raised questions about the health of the US financial system.
The profit was $142 million, or an adjusted $2.30 a share, the Phoenix-based bank said Tuesday in a statement. That beat the $2.09 average estimate of 15 analysts surveyed by Bloomberg. The firm ended the quarter with $47.6 billion in deposits, in line with figures it had announced earlier this month. Deposits gained $2.9 billion between March 20 and April 14, the company said in a presentation.
About 73% of deposits were insured, the bank said. Western Alliance also recorded a charge of $109.7 million as part of “surgical” asset sales and loan reclassifications meant to strengthen the bank’s regulatory capital and liquidity while reducing wholesale borrowings. The bank said it has $33.5 billion in available liquidity from sources including the Federal Reserve’s discount window and the Federal Home Loan Bank of San Francisco.
Other regional banks are set to report this week, providing the fullest glimpse yet into how the nation’s mid-sized lenders are navigating a crisis created by a mismatch in the duration of their assets and liabilities. Those issues pushed Silvergate Capital Corp. to liquidate while sparking bank runs at SVB Financial Group’s Silicon Valley Bank and Signature Bank, and leading to the collapse of both firms. Federal authorities responded by lining up measures to bolster liquidity and protect depositors.
The shares rose as high as $39 in extended trading after the announcement. They ended regular trading at $32.51, down about 45% this year.
(Updates with deposit detail and liquidity levels starting in second paragraph.)
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