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New 52-Wk High for Western Alliance

Zacks Equity Research

Shares of Western Alliance Bancorporation (WAL) touched a new 52-week high of $19.01 during its trading session on Sep 27. This denotes an increase over the previous high of $18.75 reached on Jul 25.  

Western Alliance Bancorporation closed the trading day on Sep 27 at $18.86, reflecting a solid year-to-date return of 84.9%. The trading volume for the session was 0.84 million shares. Further upside potential exists for this Zacks Rank #3 (Hold) multi-bank holding company as can be deduced from its earnings estimate revisions in the last 60 days and expected earnings growth of 68.4% for 2013.

Growth Drivers

Financial results for the second quarter 2013 for Western Alliance Bancorporation were impressive; shares since then have grown by 10.4%. Earnings per share at 31 cents represented an increase from the Zacks Consensus Estimate of 27 cents.

Net interest income in the quarter grew 16% while a fall of 73.9% was recorded for Western Alliance Bancorporation’s provision for loan losses. Non-interest income increased 46.8% year over year.

Talking of balance sheet of Western Alliance Bancorporation, total assets grew by 20% in the quarter primarily due to an increase of 24.1% in loans while borrowings and total deposits were up by 20.5% and 16.7%, respectively. Loan to deposit ratio improved 640 basis points.

Based on solid financial performances and an average positive earnings surprise of 23.4% (considering trailing four quarters), possibility is high for Western Alliance Bancorporation to post solid results in the quarters ahead. Also, we have an Earnings ESP of +4.0% for 2013 and 8.3% for 2014.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Western Alliance Bancorporation has increased by 2.5% to $1.25 for 2013 and by 1.5% to $1.32 for 2014, respectively.

Western Alliance Bancorporation currently has a market capitalization of $1.6 billion. Other stocks to watch out for in the industry are BofI Holding, Inc. (BOFI), with a Zacks Rank #1 (Strong Buy) while BBCN Bancorp, Inc. (BBCN) and City National Corporation (CYN), each hold a Zacks Rank #2 (Buy).

Read the Full Research Report on WALRead the Full Research Report on CYNRead the Full Research Report on BBCNRead the Full Research Report on BOFIZacks Investment Research