Financial stock to watch: Western Alliance Bancorporation (NYSE: WAL)

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Western Alliance Bancorporation (NYSE: WAL) stock rose 0.7% on October 19th, 2018 (as of 10:21 AM GMT-4; Source: Google finance) post a decent third quarter of FY 18. WAL has posted the net interest income was $234.0 million in the third quarter 2018, which is an increase of $9.9 million from $224.1 million in the second quarter 2018, and an increase of $32.5 million, or 16.1%, compared to the third quarter 2017. As acquired loans are recorded at fair value in an acquisition, purchase discounts on these acquired loans are recorded and accreted into interest income based on expected future cash flows over the life of the loans and may be accelerated upon prepayment of acquired loans. Net interest income in the third quarter 2018 includes $3.3 million of total accretion income from acquired loans, compared to $5.1 million in the second quarter 2018, and $7.5 million in the third quarter 2017. The Company’s net interest margin in the third quarter 2018 is of 4.72%, an increase from 4.70% in the second quarter 2018, and from 4.65% in the third quarter 2017. Net income was $111.1 million for the third quarter 2018, an increase of $6.4 million from $104.7 million for the second quarter 2018, and an increase of $28.3 million, or 34.1%, from $82.8 million for the third quarter 2017

WAL in the third quarter of FY 18 has reported the adjusted earnings per share of $1.05, beating the analysts’ estimates for the adjusted earnings per share of $1.03. The company had reported the adjusted revenue of $238.5 million in the third quarter of FY 18, missing the analysts’ estimates for revenue of $247 million.

Moreover, gross loans has totaled $16.73 billion at September 30, 2018, an increase of $595 million from $16.14 billion at June 30, 2018, and an increase of $2.21 billion from $14.52 billion at September 30, 2017. The increase from the prior quarter was driven by an increase of $282 million in residential real estate loans, $209 million in commercial and industrial loans, and $129 million in construction and land development loans. Deposits totaled $18.91 billion at September 30, 2018, an increase of $821 million from $18.09 billion at June 30, 2018, and an increase of $2.00 billion from $16.90 billion at September 30, 2017. The increase from the prior quarter was driven by an increase of $590 million from savings and money market accounts and $114 million from demand deposits.

 

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