Revenue increased by 15% and profits surged by 27%, Western Alliance (WAL.US) Q3 financial report exceeded expectations and dispelled regional bank fears.

After the US stock market closed on Tuesday, Western Alliance Bancorp (WAL.US) based in Phoenix, USA, delivered a report for the third quarter that exceeded market expectations. The financial report showed that the bank's third quarter revenue increased by 15.2% year-on-year to $9.382 billion, net profit surged by over 27% year-on-year to $2.502 billion, equivalent to $2.28 per share, significantly better than the expectations of most Wall Street analysts, effectively easing the market's previous tension. Last Thursday, the loan fraud cases disclosed by two regional banks in the US, Zions Bancorp (ZION.US) and Western Alliance Bancorp, caused market panic, leading to a single-day plunge of 6.3% in the S&P Regional Bank Select Industry Index, marking the worst performance in several months. Investors were concerned that this might be just the tip of the iceberg of systemic risks in the industry, and the outstanding performance in this financial report became a key turning point. Specifically, in the third quarter, Western Alliance Bancorp's net interest income (the difference between loan income and deposit interest expenses) increased by 7.7% year-on-year to $7.504 billion, higher than the average analyst expectation of $7.37 billion. Provision for credit losses was $31.1 million, close to the market estimate of $30 million; the future credit loss reserve increased to $80 million, almost double the analyst's expectation. President and CEO Kenneth A. Vecchione emphasized that the steady growth of the balance sheet, stable profit margins, and the steady increase in income from mortgage banking activities all supported the continuous growth of net interest income, driving the company to achieve a record pre-tax net operating income (PPNR) of $394 million. In terms of business structure, Western Alliance Bancorporation conducts business through five regional banking divisions in the western United States, providing commercial banking, financial management, mortgage services, and professional financial solutions. Its income presents a "dual-engine" feature - with net interest income accounting for 85.2% of total income, forming the profit base; while fees for banking, lending, wealth management, and trading services provide supplementary income. Over the past five years, the company's income has grown at a compound annual growth rate of 23.3%, exceeding the industry average growth rate. It is worth mentioning that the financial industry is very sensitive to macro environment factors (such as interest rates, policies, market sentiment), and the five-year average data may conceal drastic changes in the past one or two years. Western Alliance's annualized revenue growth in the past two years was 13.2%, although lower than its five-year historical trend, this result still indicates a healthy market demand. The core focus of market valuation of banks lies in the ability of the balance sheet strength and book value (shareholder equity) to continue to grow. Tangible book value per share (TBVPS) serves as a key indicator that excludes intangible asset interference, and Western Alliance Bancorp's performance stands out: the annual growth rate of TBVPS over the past five years reached a high of 14.9%, and in the recent two years it reached 15.3%, climbing from $44.02 per share to $58.56 per share. The market generally expects this indicator to grow by 12.9% to $66.14 per share in the next 12 months, continuing a first-class growth trend. Overall, Western Alliance Bancorp's performance this quarter not only exceeded analyst expectations, but also demonstrated growth potential in key areas. As of writing, the stock rose by 3.32% to $79 in after-hours trading, confirming the market's recognition of its sound business capabilities.