Western Alliance (WAL) Q3 2026 Earnings Report
MX:WAL Q3 2026 EPS Results
- Actual EPS
- MXN 46.04
- Consensus EPS
- MXN 45.40
- Beat/Miss
- Beat by +MXN 0.64
- One Year Ago EPS
- MXN 42.85
MX:WAL Q3 2026 Revenue Results
- Actual Revenue
- MXN 25.96B
- Expected Revenue
- MXN 18.56B
- Beat/Miss
- Beat by +MXN 7.39B
- YoY Revenue Growth
- -4.26%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/19/2026
- Time
- After Close
- Conference Call
- Monday, October 19, 2026
Western Alliance's next earnings date is estimated for January 28, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was strongly constructive. Management reported broad improvement in asset quality, earnings, commercial banking deposits, deposit costs, reserve coverage, capital return, and profitability, while raising noninterest income guidance and lowering deposit-cost guidance. The principal challenges were reduced deposit and loan growth guidance, mortgage-market softness, seasonal Q4 margin pressure, higher operating expenses, and modest sequential declines in capital metrics. Overall, the highlights significantly outweighed the lowlights.
Management expects deposit optimization to total at least $5 billion by year end, with deposit growth revised from $6 billion to a range of $3.5 billion to $4 billion and loan growth revised lower by $1 billion; the HFI loan to deposit ratio should reach 77 to 80% by year end. Net interest income is expected to grow between 11% to 12%, incorporating a 25 basis point rate increase in December, with a 3- to 4-basis-point fourth-quarter NIM headwind; total noninterest income is projected to grow between 18% to 21%, mortgage banking revenue is expected to be approximately $70 million, deposit cost guidance is $650 to $675 million, operating expense guidance remains $1.6 billion to $1.65 billion, core net charge off guidance is 25 to 35 basis points, nonaccrual loans are expected to continue to decline, and the 2026 effective tax rate outlook remains at 19%. Management also expects fourth-quarter dollar NII to be flat to slightly up, interest-bearing deposit costs to increase 10 to 15 bps, a blended cumulative deposit beta of about 65% over the next year, and medium-term ROE of 16% to 17% in 2 to 2.5 years.
- Meaningful Improvement in Asset QualityNonaccrual loans declined 14%, or $77 million, from the prior quarter to $485 million, reducing nonaccrual loans to 79 basis points of funded HFI loans. Two additional credits identified at Investor Day were resolved, with the remaining two expected to be resolved before year end.
- Lower Net Charge-Offs and Higher Reserve CoverageNet charge-offs declined $9 million sequentially to $46 million, while the net charge-off ratio decreased 7 basis points to 30 basis points. Total loan ACL coverage of nonaccrual loans increased 22 percentage points to 118%, up from 96% in Q2.
- Deposit Optimization Ahead of PlanThe company transitioned $3 billion of higher-cost ECR-related deposits during Q3 while keeping total deposits essentially flat. It has remixed $4.5 billion of deposits over the past two quarters, exceeding the original goal by $1.5 billion and completing the initiative one quarter earlier than expected.
- Strong Commercial Banking Deposit GrowthCommercial banking deposits grew $1.8 billion in Q3, increasing to 34% of total deposits from 31% in the prior quarter. This growth offset most of the purposeful reduction in higher-cost deposits, leaving total deposits at $81.8 billion, essentially flat from Q2.
- Lower Deposit Costs and Improved Net Interest MarginDeposit costs declined $14 million from Q2, supporting a 10-basis-point quarterly expansion in adjusted net interest margin. Reported net interest margin increased 4 basis points to 3.57%, and management expects additional deposit-cost reductions in Q4.
- Strong Earnings and Revenue GrowthPPNR grew 6% year over year to $419 million, EPS increased 7.5% to $2.45, and net income rose 6% to $277 million. Net interest income increased 8%, or $57 million, while noninterest income grew 10%, or $19 million.
- Continued HFI Loan GrowthHFI loans grew $600 million during Q3, including nearly $350 million of C&I growth and solid growth in select CRE businesses. Average HFI loans increased $1.5 billion, and C&I loans accounted for approximately 90% of the company's $4.9 billion of HFI loan growth over the past year.
- Commercial Banking Fee MomentumCommercial banking fee income increased $6 million sequentially and $26 million year over year. The growth, together with higher securities gains, more than offset lower mortgage banking revenue.
- Mortgage Banking Resilience and Private-Label Securitization BenefitsMortgage banking revenue was $80 million, down only $5 million sequentially despite a challenging rate environment. Gain-on-sale margins remained stable at 27 basis points, and private-label securitizations supported secondary-market revenue while allowing the bank to retain associated low-cost deposits and maintain a smaller MSR balance.
- Lower Excess Liquidity and Improved Balance-Sheet PositioningSecurities and cash declined approximately $1 billion from Q2 to $25.6 billion as funds were deployed into loans and excess liquidity was reduced. The HFI loan-to-deposit ratio increased approximately 1 percentage point to 75%, moving toward the 77% to 80% medium-term target.
- Reduced BorrowingsPeriod-end borrowings declined 10% sequentially to $5.6 billion, further supporting improvements in adjusted and reported net interest margins.
- Accelerated Share RepurchasesThe company repurchased $92.1 million, or approximately 1.15 million shares, during Q3 at an average price of $79.78. Cumulative repurchases since the program's inception reached $212.5 million, or approximately 2.7 million shares.
- Improved Profitability and Tangible Book Value GrowthROA TCE increased 20 basis points from Q2 to 15.5%. Tangible book value per share remained up more than 6% year over year and has grown at a 16% CAGR since the end of 2020, approximately four times the peer median over that period.
- Investment in Lower-Cost Deposit Channels and AIThe company added personnel to support lower-cost specialized deposit channels, invested in new AI initiatives, and began converting technology consultants to full-time employees. Management said it is already seeing some early positive returns from the AI initiatives and expects consultant conversion to reduce contractor expense going forward.
- Raised Noninterest Income OutlookFull-year 2026 total noninterest income growth guidance was increased to 18% to 21% from 13% to 17%, reflecting strong Q3 performance and continued momentum in commercial banking fees.
- Lower Deposit Cost OutlookThe upper end of deposit cost guidance was lowered to $650 million to $675 million. Management expects lower ECR-related deposit balances, which were $26.7 billion at quarter-end versus $29.9 billion at the end of Q2, to more than offset the impact of the September rate hike.
- Positive Near-Term Credit OutlookManagement reaffirmed core net charge-off guidance of 25 to 35 basis points and expects Q4 performance to be similar to Q3. Management also expects nonaccrual loans to continue declining, with high confidence that the remaining two identified credits will be resolved by year end.
- Strategic Focus on Higher-Returning GrowthManagement said loan growth is increasingly concentrated in regional banking, hotel, franchise finance, technology and innovation, MSR lending, and note finance. These specialty initiatives are also generating related deposits and treasury-management fee business.
- Medium-Term Return Target Remains in SightManagement reiterated its target of reaching a sustainable 16% to 17% ROE, with the timing estimated at approximately two to 2.5 years. The company said its current 15.5% ROA TCE level is not far from the lower end of that range.
MX:WAL Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Jan 28, 2027 | 2026 (Q4) | 46.89- | 48.67 | ― | ― |
| Oct 19, 2026 | 2026 (Q3) | 45.4046.04 | 42.85 | 7.46% (+3.19) | |
| Jul 21, 2026 | 2026 (Q2) | 44.3344.35 | 38.9 | 14.01% (+5.45) | |
| Apr 21, 2026 | 2026 (Q1) | 30.4131.01 | 33.64 | -7.82% (-2.63) | |
| Jan 27, 2026 | 2025 (Q4) | 44.9148.67 | 36.64 | 32.82% (+12.03) | |
| Oct 22, 2025 | 2025 (Q3) | 39.1342.85 | 33.83 | 26.67% (+9.02) | |
| Jul 17, 2025 | 2025 (Q2) | 38.0038.90 | 32.89 | 18.29% (+6.01) | |
| Apr 21, 2025 | 2025 (Q1) | 33.5133.64 | 30.07 | 11.88% (+3.57) | |
| Jan 27, 2025 | 2024 (Q4) | 35.7636.64 | 24.99 | 46.62% (+11.65) | |
| Oct 17, 2024 | 2024 (Q3) | 35.5033.83 | 37.02 | -8.63% (-3.19) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
