WESTERN ALLIANCE BANCORPORATION (WAL)

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.

This discussion is designed to provide insight into management's assessment of significant trends related to the Company's consolidated financial condition, results of operations, liquidity, capital resources, and interest rate sensitivity. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the interim Unaudited Consolidated Financial Statements and Notes to Unaudited Consolidated Financial Statements hereto and financial information appearing elsewhere in this report. Unless the context requires otherwise, the terms "Company," "we," and "our" refer to Western Alliance Bancorporation and its wholly-owned subsidiaries on a consolidated basis.

Forward-Looking Information

Certain statements contained in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including without limitation, statements regarding our expectations with respect to our business, financial and operating results, including our deposits and deposit optimization strategy, liquidity and funding, changes in economic conditions and the related impact on the Company's business, and statements that are related to or are dependent on estimates or assumptions relating to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts.

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and are subject to certain risks, uncertainties, assumptions, and changes in circumstances that may cause the Company's actual results to differ significantly from historical results and those expressed in any forward-looking statement. Risks and uncertainties include those set forth in the Company's filings with the SEC and the following factors that could cause actual results to differ materially from historical or expected results: 1) adverse financial market and economic conditions, including the effects of inflation and any recession in the United States, adverse developments in the financial services industry generally, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers, and any related impact on customer behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the geopolitical conflicts; 2) changes in interest rates and increased rate competition; 3) the discontinuation of or substantial changes to interest rate benchmarks utilized in our lending, borrowing and hedging activities; 4) exposure of financial instruments to certain market risks that may increase the volatility of earnings and AOCI; 5) the inherent risk associated with accounting estimates, including the impact to the allowance, provision for credit losses, and capital levels; 6) exposure to natural and man-made disasters in markets where we operate and the impact of climate change and sustainability practices on us and our customers; 7) the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; 8) higher defaults on our loan portfolio than we expect; 9) increased foreclosures and ownership of real property; 10) changes in management's estimate of the adequacy of the allowance for credit losses; 11) dependency on real estate and events that negatively impact the real estate market; 12) concentrations in certain business lines or product types within our loan portfolio; 13) residual risk retained by us on reference pools covered by credit linked notes; 14) exposures related to the properties to which we acquire title; 15) ability to compete in a highly competitive market; 16) expansion strategies through acquisitions or implementation of new lines of business or new products and services that may not be successful and supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; 17) uncertainty associated with digital payment initiatives; 18) ability to recruit and retain qualified employees and implement adequate succession planning to mitigate the loss of key members of our senior management team; 19) ability to meet capital adequacy and liquidity requirements and the sufficiency of liquidity; 20) dependence on low-cost deposits; 21) risks related to representations and warranties made on third-party loan sales; 22) ability to borrow from the FHLB or the FRB; 23) a change in our creditworthiness; 24) information security breaches; 25) reliance on third parties to provide key components of our infrastructure; 26) perpetration of fraud; 27) ability to implement and improve our controls and processes to keep pace with growth; 28) risk of operating in a highly regulated industry and our ability to remain in compliance; 29) ability to adapt to technological change; 30) technological risks and developments and cyber threats, attacks or events; 31) emerging external focus among regulators and other officials related to risks in connection with the development and use of artificial intelligence; 32) failure to comply with state and federal banking agency laws and regulations; 33) results of any tax audit findings, challenges to our tax positions, or adverse changes or interpretations of tax laws; 34) risks related to ownership and price of our preferred and common stock; 35) ability to continue to declare quarterly dividends; 36) additional regulatory requirements resulting from our continued growth; 37) management's estimates and projections of interest rates and interest rate policies; 38) the execution of our business plan; 39) the outcome of legal proceedings with borrowers, the amount of funds and/or collateral that may be available for repayment of loans, and any adverse economic or other events impacting the collateral, borrower or guarantors with respect to loans.

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For more information regarding risks that may cause the Company's actual results to differ materially from any forward-looking statements, see “Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, “Risk Factors” in Part II, Item 1A of this Form 10-Q, and related disclosures in other filings with the SEC. All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are based only on information currently available to us and speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Form 10-Q might not occur, and you should not put undue reliance on any forward-looking statements.

Recent Market and Banking Industry Developments

Deposit Optimization Strategy

During the second quarter of 2026, the Company initiated a deposit optimization strategy designed to improve profitability by reducing higher-cost deposit balances. These efforts lowered period-end deposits relative to the prior quarter, including the reduction of more than $1 billion of higher-cost deposits near quarter-end. This strategy is designed to reposition the Company’s funding mix by reducing deposit costs and improving net interest margin over time.

CRE Exposure

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 26% and 27% of total loans at June 30, 2026 and December 31, 2025, respectively. Approximately 13% and 14% of CRE loans, excluding construction and land loans, were owner occupied at June 30, 2026 and December 31, 2025, respectively. Less than 4% of HFI loans were non-owner occupied office loans at June 30, 2026 and December 31, 2025. During the three and six months ended June 30, 2026, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $32.0 million and $59.7 million, respectively. As the Company continues to focus on moving nonperforming loans through its standard credit resolution process, the Company took possession of one CRE office property during the six months ended June 30, 2026. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

Legal Disputes Related to Credit Facilities

Cantor Group V, LLC

In August 2025, the Bank initiated a lawsuit in Los Angeles Superior Court against Cantor Group V, LLC and certain individual guarantors in connection with the Bank's note finance revolving credit facility to Cantor Group V, LLC, alleging fraud by the borrower for failing to provide collateral loans in the first position, seeking appointment of a receiver and recovery of funds, and seeking other forms of relief and damages related to claims against the borrower. In addition, under certain circumstances such as fraud, the Bank holds both a limited guaranty and full guaranty from two ultra-high net worth individuals. As of September 30, 2025, the Bank moved the $98.5 million facility to nonaccrual status and established a specific allowance of $29.6 million for this loan. During the three months ended March 31, 2026, management reevaluated the existing collateral based on updated “as-is” appraisals and due to the expected duration of the resolution process, recognized a charge-off of $26.1 million from the previously established reserve. No additional charge-offs were recognized during the three months ended June 30, 2026.

Leucadia Asset Management LLC and Jefferies Financial Group

In May 2026, the Bank and its collateral agent filed an amended complaint in New York Supreme Court against Jefferies Financial Group, Leucadia Asset Management LLC, and affiliates (collectively, the "Defendants") alleging breach of contract, fraud, negligence, promissory estoppel, and unjust enrichment in connection with a trade finance loan extended by the Bank, seeking declaratory and injunctive relief for the recovery of funds, and other forms of relief and damages related to claims against the Defendants. This loan was secured by accounts receivable the Bank's borrower purchased from First Brands Group, which filed for bankruptcy in September 2025. The loan entered default status following the identification of servicing failures, including lapses in UCC filings, and in October 2025, the Bank entered into a forbearance agreement pursuant to which the Defendants agreed to cause full repayment of the loan by March 31, 2026. Defendants then made payments pursuant to the forbearance agreement from October 2025 to January 15, 2026. In late February 2026, after the Company was notified the remaining principal balance of the loan would not be repaid as agreed and with the Defendants' failure to make the payment due that month, the Company recorded a charge‑off of $126.4 million for the remaining loan balance. The Company continues to pursue recovery through litigation and other available remedies. Any future recoveri

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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is designed to provide insight on the financial condition and results of operations of Western Alliance Bancorporation and its subsidiaries and should be read in conjunction with “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. This discussion and analysis contains forward-looking statements that involve risk, uncertainties, and assumptions. Certain risks, uncertainties, and other factors, including, but not limited to, those set forth under “Forward-Looking Statements” at the beginning of Part I of this Form 10-K and those discussed in Part I, Item 1A of this Form 10-K under the heading "Risk Factors," may cause actual results to differ materially from those projected in the forward-looking statements.

For a comparison of the 2024 results to the 2023 results and other 2023 information not included herein, refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Developments

CRE Exposure

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 27% and 30% of total loans at December 31, 2025 and 2024, respectively. Approximately 14% and 16% of CRE loans, excluding construction and land loans, were owner occupied at December 31, 2025 and 2024, respectively, and 4% were non-owner occupied office loans at both December 31, 2025 and 2024. In response to changing conditions in the CRE market, the Company has been proactive in establishing enhanced monitoring policies and procedures as it relates to its CRE loans and has undertaken actions to limit the growth of its CRE portfolio. During the year ended December 31, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $55.5 million, which primarily related to office properties. As the Company is focused on moving nonperforming loans through its standard credit resolution process, the Company took possession of five CRE office properties during the year ended December 31, 2025, which drove the net increase in other assets acquired through foreclosure from December 31, 2024. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

Legal Dispute Related to Credit Facility

In August 2025, the Bank initiated a lawsuit in connection with its note finance revolving credit facility to Cantor Group V, LLC, alleging fraud by the borrower for failing to provide collateral loans in first position, seeking appointment of a receiver and recovery of funds, and other forms of relief and damages related to claims against the borrower. Management evaluated the existing collateral based on “as-is” appraisals and believes it covers the obligation. Updated collateral appraisals are expected in March 2026. In addition, under certain circumstances such as fraud, the Bank holds both a limited guaranty and full guaranty from two ultra-high net worth individuals. Despite the collateral coverage and guaranties, the Bank moved the $98.5 million facility to nonaccrual status and established a specific allowance of $29.6 million for this loan as of September 30, 2025, which remained unchanged through December 31, 2025.

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Table of Contents

Financial Overview and Highlights

WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware. WAL provides a full spectrum of customized loan, deposit and treasury management capabilities, including funds transfer and other digital payment offerings, through its wholly-owned banking subsidiary, WAB. Effective as of October 4, 2025, the Company completed its brand unity initiative, consolidating its legacy division bank brands: ABA, BON, FIB, Bridge, and TPB, under a single unified name, Western Alliance Bank.

The Company also serves business customers through a national platform of specialized financial services, including mortgage banking services through AmeriHome and digital payment services for the class action legal industry.

2025 Financial Highlights

•Net income available to common stockholders of $956.2 million and diluted earnings per share of $8.73, an increase from $774.9 million and from $7.09 per share, respectively, for 2024

•Net revenue of $3.5 billion, constituting year-over-year growth of 12.0%, or $380.9 million, compared to an increase in non-interest expenses of 4.3%, or $86.7 million

•PPNR1 increased $294.2 million to $1.4 billion, compared to $1.1 billion in 2024

•Effective tax rate of 17.9% for 2025, compared to 20.5% for 2024

•Total loans HFI of $58.7 billion, up $5.0 billion from December 31, 2024

•Total deposits of $77.2 billion, up $10.8 billion from December 31, 2024

•Total equity of $7.9 billion, an increase of $1.2 billion from December 31, 2024

•Nonperforming assets (nonaccrual loans and repossessed assets) increased to 0.69% of total assets, from 0.65% at December 31, 2024

•Net loan charge-offs to average loans outstanding of 0.24% for 2025, compared to 0.18% for 2024

•Net interest margin of 3.51% in 2025, decreased from 3.58% in 2024

•Return on average assets of 1.12% for 2025, compared to 0.99% for 2024

•Tangible common equity ratio1 of 7.3%, compared to 7.2% at December 31, 2024

•Book value per common share of $67.20, an increase of 15.4% from $58.24 at December 31, 2024

•Tangible book value per share, net of tax1, of $61.29, an increase of 17.3% from $52.27 at December 31, 2024

•Efficiency ratio1 of 58.9% in 2025, compared to 63.2% in 2024

The impact to the Company from these items, and others of both a positive and negative nature, are discussed in more detail below as they pertain to the Company’s overall comparative performance for the year ended December 31, 2025.

1 See Non-GAAP Financial Measures section beginning on page 39.

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Table of Contents

Results of Operations and Financial Condition

As a bank holding company, management focuses on key ratios in evaluating the Company's financial condition and results of operations.

A summary of the Company's results of operations, financial condition, and selected metrics are included in the following tables:

(1) See Non-GAAP Financial Measures section beginning on page 39.

(1) See Non-GAAP Financial Measures section beginning on page 39.

Asset Quality

For all banks and bank holding companies, asset quality plays a significant role in the overall financial condition of the institution and results of operations. The Company measures asset quality in terms of nonaccrual loans as a percentage of gross loans HFI and net charge-offs as a percentage of average loans HFI. Net charge-offs are calculated as the difference between charged-off loans and recovery payments received on previously charged-off loans. The following table summarizes the Company's key asset quality metrics for loans HFI:

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Table of Contents

Asset and Deposit Growth

The Company’s assets and liabilities are comprised primarily of loans and deposits. Therefore, the ability to originate new loans and attract new deposits is fundamental to the Company’s growth.

Total assets increased to $92.8 billion at December 31, 2025, an increase of $11.8 billion, or 14.6%, from $80.9 billion at December 31, 2024. Higher deposit levels supported increases in investment securities of $5.3 billion and also funded HFI and HFS loan growth of $5.0 billion and $1.2 billion, respectively.

Loans HFI increased by $5.0 billion, or 9.3%, to $58.7 billion as of December 31, 2025, compared to $53.7 billion as of December 31, 2024. By loan type, the increase in loans HFI from December 31, 2024 was driven by increases in commercial and industrial, commercial real estate, and residential loans of $4.8 billion, $330 million, and $326 million, respectively, partially offset by a decrease of $424 million in construction and land development loans. In addition, loans HFS increased $1.2 billion from $2.3 billion as of December 31, 2024 primarily due to an increase in government-insured or guaranteed and agency-conforming loans.

Total deposits increased $10.8 billion, or 16.3%, to $77.2 billion as of December 31, 2025 from $66.3 billion as of December 31, 2024. By type, the increase in deposits from December 31, 2024 was driven by increases of $5.5 billion, $3.4 billion, and $2.5 billion in non-interest bearing, savings and money market, and interest bearing demand deposits, respectively, partially offset by a decrease of $605 million in certificates of deposit.

RESULTS OF OPERATIONS

The following table sets forth a summary financial overview:

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