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# Western Alliance Nonaccrual Loans Fall 14% To $485 Million As Bank Cuts 2026 Loan And Deposit Growth Targets
- URL: https://www.bullished.co/western-alliance-nonaccrual-loans-fall-14-to-485-million-as-bank-cuts-2026-loan-and-98e12d87/
- Published: 2026-10-19T20:37:56.000Z
- Updated: 2026-10-28T20:08:07.000Z
- Description: The Phoenix bank lowered its full-year balance-sheet growth outlook while reporting third-quarter net income of $277.2 million.
- Author: Matteo Parrino
- Tags: Earnings, WAL, Industry: Financials

[Western Alliance Bancorporation](https://www.bullished.co/tag/wal/) cut its 2026 growth targets for loans and deposits even as third-quarter [net income rose to $277.2 million](https://www.sec.gov/Archives/edgar/data/0001212545/000162828026066286/pressrelease-9302026.htm?ref=bullished.co), or $2.45 per diluted share, according to an [8-K](https://www.sec.gov/Archives/edgar/data/0001212545/000162828026066286/wal-20261019.htm?ref=bullished.co) and attached press release. Net income was up 6.4% and earnings per share up 7.5% from a year earlier.

## What the results show

Net interest margin, a measure of lending profitability, widened to 3.57% from 3.53% in the second quarter. Pre-provision net revenue, which is net revenue less non-interest expense, was $419.1 million versus $412.4 million in the second quarter.

Nonaccrual loans, which have stopped paying interest, fell $77 million in the quarter to $485 million, or about 14%. Reserves covered 118% of them, up from 96% at the end of June. Net charge-offs fell to 0.30% of average loans from 0.37%.

The bank repurchased $92.1 million of stock, about 1.15 million shares at an average $79.78\. Total deposits were $81.8 billion, down $119 million from the second quarter.

## The deposit shift and the lower outlook

Chairman, President and CEO Kenneth A. Vecchione credited "lower deposit costs, improved asset quality and stronger reserve coverage, as well as accelerated share repurchase activity." The bank has moved $4.5 billion of higher-cost deposits over two quarters, primarily non-interest-bearing balances tied to earnings credits that offset client fees, and the earnings presentation says it is on track for $5.0 billion in 2026.

That cut deposit costs by $13.8 million to $165.4 million. Earnings-credit-related deposit balances ended the quarter at $26.7 billion, versus $29.9 billion at the end of June, per the presentation. Commercial banking deposits grew $1.8 billion to offset the outflow.

The revised 2026 outlook lowers expected loan growth to $4.0 billion from $5.0 billion. Deposit growth is now $3.5 billion to $4.0 billion, versus $6.0 billion before. The presentation says the deposit range is subject to the ongoing optimization strategy and a mix shift toward commercial banking deposits.

## What to watch

Management will discuss the quarter and the revised outlook on a call at 12:00 p.m. ET on Tuesday. WAL shares closed at $73.63 on Monday, down 1.18%, ahead of the filing.

The presentation sets a second-half 2026 repurchase target of $150 million, of which $92 million was done in the third quarter.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — WESTERN ALLIANCE BANCORPORATION (WAL)](https://www.sec.gov/Archives/edgar/data/0001212545/000162828026066286/wal-20261019.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit pressrelease-9302026.htm — WESTERN ALLIANCE BANCORPORATION 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001212545/000162828026066286/pressrelease-9302026.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit walq32026earningspresent.htm — WESTERN ALLIANCE BANCORPORATION 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001212545/000162828026066286/walq32026earningspresent.htm?ref=bullished.co) — SEC EDGAR

### More on Western Alliance Bancorporation

- [Western Alliance CEO Says 'We Don't Have A Broken Company' As Bank Slows Growth And Cuts Deposit Outlook](https://www.bullished.co/western-alliance-ceo-says-we-dont-have-a-broken-company-as-bank-slows-growth-and-cuts-025303b3/)

[All Western Alliance Bancorporation (WAL) coverage →](https://www.bullished.co/tag/wal/)