Western Alliance Bancorp: 2Q26: Strategy Pivot Is Encouraging, but We Temper Expectations for ECR Deposit Costs & Buybacks; N

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Western Alliance Bancorp: 2Q26: Strategy Pivot Is Encouraging, but We Temper Expectations for ECR Deposit Costs & Buybacks; N

J P M O R G A N North America Equity Research

23 July 2026

Western Alliance Bancorp Neutral

WAL, WAL US

2Q26: Strategy Pivot Is Encouraging, but We Temper Price (22 Jul 26):$83.41

Expectations for ECR Deposit Costs & Buybacks; N ▲Price Target (Dec-27):$93.00 Prior (Dec-27):$90.00

While there were several moving parts to Western Alliance’s 2Q26, we viewed the

results as being “good enough” to support WAL shares outperforming yesterday U.S. Mid and Small Cap Banks

(WAL: +3.6%; KRX: -0.4%). Many investors we spoke to heading into the quarter Anthony Elian, CFA AC

on WAL shares had braced for negative revisions to the company’s outlook, (1-212) 622-5067

including higher ECR deposit costs and lower NII. However, with the only material anthony.elian@jpmorgan.com

part of the outlook change being the fee income range tied to lower mortgage Michael Pietrini

banking, when we couple this with a line of sight into the resolution (by YE26) on (1-212) 622-0618

michael.pietrini@jpmorgan.com

six nonaccrual loans that were discussed at Investor Day, we were not surprised to J.P. Morgan Securities LLC

see WAL shares outperform. With that said, our enthusiasm coming out of the

quarter is less than the share price reaction would suggest. First, while we fully

appreciate the deposit optimization that is in the works with the aim of enhancing Key Changes (FYE Dec)

profitability, which is expected to result in a total of $3B of high cost ECR deposits Prev Cur Δ

outflowing by 3Q26, these balances only represent about 10% of total ECR Adj. EPS - 27E ($) 10.11 10.89 7.7%

deposits and we would have appreciated a greater effort to exit these higher cost