: Western Alliance says deposits are recovering; shares rally

Western Alliance Bancorp. WAL on Tuesday said that consumer deposits were recovering, after the collapse of Silicon Valley Bank prompted more consumers to pull money from regional financial institutions, and the company reported a year-over-year gain in net-interest income in its first quarter. “While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized with end-of-quarter deposits of $47.6 billion,” Chief Executive Kenneth Vecchione said in a statement. That figure was still down from the prior quarter and the prior-year period. But the company said deposits had increased more recently: “Since March 31, deposits have increased an additional $2.0 billion through April 14, with total insured deposits representing 73% of total deposits, which is well above industry norms compared to the 50 largest U.S. banks.” Shares rallied 13.7% after hours. Earlier this month, the bank had spooked investors, after a financial update from the company did not provide a specific figure for its deposit balance as of March 31. For its first quarter, the bank reported net income of $142.2 million, or $1.28 a share, compared with $240.1 million, or $2.22 a share, in the same quarter last year. Analysts polled by FactSet expected $1.97. Net interest income was $609.9 million, a 35.7% jump from the prior-year quarter. Management said that balance-sheet “repositioning,” which included the sale of some assets and loan reclassifications, resulted in after-tax net non-operating charges of $109.7 million. But the company said that would “have an immediate accretive impact to regulatory capital and allow us to prioritize core client relationships with holistic lending, deposit, and treasury management needs.”

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