Western Alliance: Model Updates/2Q26 Preview

Research evidence excerpt

Western Alliance: Model Updates/2Q26 Preview

Deutsche Bank

Research

Rating Company Date

Buy Western Alliance 24 June 2026

North America Reuters Bloomberg Rating Buy

United States WAL.N WAL US Price target (USD) 92.00 Price at 23 Jun 26 80.68

52-week range 96.08 – 66.70

Financial

Banks Valuation & Risks

Model Updates/2Q26 Preview

Bernard Von-Gizycki

What's in this note? Research Analyst

+1-212-250-5881 We preview 2Q earnings and update our model post a follow up call with mgmt.

▪ Our 2Q26e EPS of $2.23 compares to consensus of $2.42. Vs.

consensus, net interest income is lower, fee income is lower, expenses

are higher and provision expense is lower.

Updating our 2Q26 estimate

Our 2Q26e EPS of $2.23 (vs. $2.34 previously) compares to consensus of $2.42.

Our lower estimate is primarily due to lower net interest income on a lower NIM

and lower loan growth than previously modeled. Vs. consensus, net interest

income is lower, fee income is lower, expenses are higher and provision expense

is lower.

▪ Net interest income. We model $792m in net II vs. $776m in 1Q. For

FY26, we assume NII growth of 12% which compares to mgmt's guidance

of +11-14%.

▪ NIM. We model a NIM of 3.52%, 2bps lower q/q.

▪ Loan growth. We model $1.1b (+1.8%) in sequential loan growth. In total

we assume loan growth of $1.6b in 1H26. We expect 2H26 to be stronger

(with $4.4b of total loan growth) to be in-line with mgmt’s guide of $6b of

loan growth in FY26.

▪ Deposits. Mgmt. previously noted that given the strong deposit growth

of $5.6b during 1Q, they can now start to optimize the deposit base (and

focus on lower to no ECR related deposits). We assume $0.9b total

deposit outflow in 2Q as mgmt. revisits customer relationships. For FY26,

we assume ~$8b of deposit growth, in-line with mgmt's guidance.