WESTERN ALLIANCE BANCORPORATION

Previous wording

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and involve 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 those presented: 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 depositor behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the military conflicts in Ukraine and the Middle East; 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 that 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)…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and involve 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 those presented: 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 depositor behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the military conflicts in Ukraine and the Middle East; 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…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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, 2024 and “Risk Factors” in Part II, Item 1A of this Form 10-Q. 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 only made 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.

Current wording

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, 2024, “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 only made 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.

Previous wording

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 30% of total loans at March 31, 2025 and December 31, 2024. Approximately 15% and 16% of CRE loans, excluding construction and land loans, were owner occupied at March 31, 2025 and December 31, 2024, respectively, and less than 5% were non-owner occupied office loans at March 31, 2025 and December 31, 2024. As elevated focus on the evolving industry dynamics facing the CRE market have emerged over the past year, 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 growth of its CRE portfolio, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. During the three months ended March 31, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $14.5 million, which primarily related to office properties. While the Company believes that its increased monitoring efforts to provide earlier identification of potential stressed loans and proactive engagement with borrowers has helped the Company assess its credit related exposure to this portfolio segment and establish adequate reserve levels, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

Current wording

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 30% of total loans at June 30, 2025 and December 31, 2024. Approximately 15% and 16% of CRE loans, excluding construction and land loans, were owner occupied at June 30, 2025 and December 31, 2024, respectively, and less than 5% were non-owner occupied office loans at June 30, 2025 and December 31, 2024. Due to changing conditions in the CRE market, the Company has implemented enhanced measures to monitor and manage credit risk related to this portfolio segment, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. During the three and six months ended June 30, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $17.5 million and $32.0 million, respectively, 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 three and six months ended June 30, 2025, which drove the net $166 million 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.

Previous wording

Financial Results Highlights for the First Quarter of 2025

Current wording

Financial Results Highlights for the Second Quarter of 2025

Previous wording

•Net income available to common stockholders of $195.9 million, compared to $174.2 million for the first quarter 2024

Current wording

•Net income available to common stockholders of $227.2 million and diluted earnings per share of $2.07, compared to $190.4 million and $1.75 per share, respectively, for the second quarter 2024

Previous wording

•Net revenue of $778.0 million, compared to $728.8 million for the first quarter 2024, with non-interest expense of $500.4 million, compared to $481.8 million for the first quarter 2024

Current wording

•Net revenue of $845.9 million, compared to $771.8 million for the second quarter 2024, with non-interest expense of $514.7 million, compared to $486.8 million for the second quarter 2024

Previous wording

•Nonperforming assets (nonaccrual loans and repossessed assets) decreased to 0.60%of total assets, compared to 0.65% at December 31, 2024

Current wording

•Nonperforming assets (nonaccrual loans and repossessed assets) increased to 0.74%of total assets, compared to 0.65% at December 31, 2024

Previous wording

•Annualized net loan charge-offs to average loans outstanding of 0.20%, compared to 0.08% for the first quarter 2024

Current wording

•Annualized net loan charge-offs to average loans outstanding of 0.22%, compared to 0.18% for the second quarter 2024

Previous wording

•Tangible common equity ratio of 7.2%, consistent with December 31, 20241

Current wording

•Tangible common equity ratio of 7.2%, flat from December 31, 20241

Previous wording

•Book value per common share of $60.03, an increase of 3.1% from $58.24 at December 31, 2024

Current wording

•Book value per common share of $61.77, an increase of 6.1% from $58.24 at December 31, 2024

Previous wording

•Tangible book value per share, net of tax, of $54.10, an increase of$1.83, or 3.5%, from $52.27 at December 31, 20241

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•Tangible book value per share, net of tax, of $55.87, an increase of$3.60, or 6.9%, from $52.27 at December 31, 20241

Previous wording

•Efficiency ratio of 63.5% in the first quarter 2025, compared to 65.2% in the first quarter 20241

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•Efficiency ratio of 60.1% in the second quarter 2025, compared to 62.3% in the second quarter 20241

Previous wording

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 three months ended March 31, 2025.

Current wording

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 three and six months ended June 30, 2025.

Previous wording

Total assets increased to $83.0 billion at March 31, 2025 from $80.9 billion at December 31, 2024. The increase in total assets of $2.1 billion, or 2.6%, was primarily driven by an increase in deposits, which contributed to an increase in funded HFI and HFS loan growth of $1.1 billion and $952 million, respectively, and investment securities of $773 million, which was partially offset by a decrease in cash of $817 million.

Current wording

Total assets increased to $86.7 billion at June 30, 2025 from $80.9 billion at December 31, 2024. The increase in total assets of $5.8 billion, or 7.2%, was supported by an increase in deposits, which contributed to an increase in investment securities of $3.5 billion and funded HFI and HFS loan growth of $2.3 billion and $736 million, respectively, which was partially offset by a decrease in cash of $1.3 billion.

Previous wording

Loans HFI increased $1.1 billion, or 2.0%, to $54.8 billion as of March 31, 2025, compared to $53.7 billion as of December 31, 2024. By loan type, commercial and industrial and commercial real estate loans increased $989 million and $134 million, respectively, from December 31, 2024. In addition, loans HFS increased $952 million from $2.3 billion as of December 31, 2024 primarily due to an increase in agency-conforming and non-EBO loans.

Current wording

Loans HFI increased $2.3 billion, or 4.2%, to $55.9 billion as of June 30, 2025, compared to $53.7 billion as of December 31, 2024. By loan type, commercial and industrial, commercial real estate, and residential loans increased $1.8 billion, $311 million, and $139 million, respectively, from December 31, 2024. In addition, loans HFS increased $736 million from $2.3 billion as of December 31, 2024 primarily due to an increase in non-EBO and agency-conforming loans.

Previous wording

Total deposits increased $3.0 billion, or 4.5%, to $69.3 billion as of March 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 $3.2 billion and $520 million in non-interest bearing deposits and savings and money market accounts, respectively, partially offset by decreases of $371 million and $331 million in interest bearing demand deposits and certificates of deposit, respectively.

Current wording

Total deposits increased $4.8 billion, or 7.2%, to $71.1 billion as of June 30, 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 $4.2 billion and $1.0 billion in non-interest bearing deposits and savings and money market accounts, respectively, partially offset by a decrease of $204 million in both interest bearing demand deposits and certificates of deposit.

Previous wording

The following table presents certain financial measures related to regulatory capital under Basel III, which includes CET1 and total capital. The FRB and other banking regulators use CET1 and total capital as a basis for assessing a bank's capital adequacy; therefore, management believes it is useful to assess financial condition and capital adequacy using this same basis. Specifically, the total capital ratio takes into consideration the risk levels of assets and off-balance sheet financial instruments. In addition, management believes that the classified assets to CET1 plus allowance measure is an important regulatory metric for assessing asset quality.

Current wording

The following table presents certain financial measures related to regulatory capital under Basel III, which includes CET1 and total capital. The FRB and other banking regulators use CET1 and total capital as a basis for assessing a bank's capital adequacy; therefore, management believes it is useful to assess financial condition and capital adequacy using this same basis. Specifically, the CET1, tier 1 capital, and total capital ratios take into consideration the risk levels of assets and off-balance sheet financial instruments. In addition, management believes that the classified assets to CET1 plus allowance measure is an important regulatory metric for assessing asset quality.

Previous wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $10.2 million and $9.6 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $10.2 million and $9.9 million for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

(2)Included in the yield computation are net loan fees of $23.8 million and $33.1 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

(2)Included in the yield computation are net loan fees of $25.5 million and $32.1 million for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

The Company's primary source of revenue is interest income. For the three months ended March 31, 2025, interest income totaled $1.1 billion, an increase of $40.6 million, or 3.8%, compared to $1.1 billion for the three months ended March 31, 2024. This increase was primarily the result of increases in interest income from loans HFS and investment securities of $27.5 million and $24.0 million, respectively, resulting from increases in the average balances of these assets of $1.9 billion and $2.4 billion, respectively. These increases were offset in part by a decrease in interest income from loans HFI of $18.4 million as lower loan yields outweighed the increase in the average balance of $3.8 billion.

Current wording

The Company's primary source of revenue is interest income. For the three months ended June 30, 2025, interest income totaled $1.2 billion, an increase of $6.9 million, or 0.6%, compared to $1.1 billion for the three months ended June 30, 2024. This increase was primarily the result of increases in interest income from loans HFS and investment securities of $31.0 million and $11.0 million, respectively, resulting from increases in the average balances of these assets of $2.0 billion and $1.1 billion, respectively. These increases were partially offset by a decrease in interest income from loans HFI of $13.4 million as lower loan yields outweighed the increase in the average balance of $4.1 billion.

Previous wording

For the three months ended March 31, 2025, interest expense totaled $445.0 million, a decrease of $11.1 million, or 2.4%, compared to $456.1 million for the three months ended March 31, 2024. The decrease in interest expense related to decreases in interest expense on other borrowings and deposits of $8.6 million and $2.3 million, respectively, due to lower rates, which were offset in part by an increase in average interest bearing deposits of $5.4 billion.

Current wording

For the three months ended June 30, 2025, interest expense totaled $456.8 million, a decrease of $34.1 million, or 4.8%, compared to $490.9 million for the three months ended June 30, 2024. The decrease in interest expense related to decreases in interest expense on deposits of $32.5 million due to lower rates and short-term borrowings of $23.2 million due to lower rates and a lower average balance of $1.1 billion. These decreases were partially offset by increases of $3.2 billion and $2.1 billion in average interest bearing deposits and long-term debt, respectively.

Previous wording

For the three months ended March 31, 2025, net interest income totaled $650.6 million, an increase of $51.7 million, or 8.6%, compared to $598.9 million for the three months ended March 31, 2024. The increase in net interest income was driven by an increase in average interest earning assets of $9.2 billion and lower rates on deposits, partially offset by lower yields on interest earning assets. The decrease in net interest margin of 13 basis points to 3.47% is largely the result of a decrease in rates that reduced yields on interest earning assets, partially offset by an increase in average interest earning assets compared to the same period in 2024.

Current wording

For the three months ended June 30, 2025, net interest income totaled $697.6 million, an increase of $41.0 million, or 6.2%, compared to $656.6 million for the three months ended June 30, 2024. The increase in net interest income was driven by an increase in average interest earning assets of $6.7 billion and lower rates on deposits, partially offset by lower yields on interest earning assets. The decrease in net interest margin of 10 basis points to 3.53% is largely the result of the impact of lower rates on interest earning asset yields, partially offset by an increase in average interest earning assets.

Previous wording

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level that is adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three months ended March 31, 2025, the Company recorded a provision for credit losses of $31.2 million, compared to $15.2 million for the three months ended March 31, 2024. The provision for credit losses for the three months ended March 31, 2025 is primarily reflective of net loan charge-offs of $25.8 million, HFI loan growth, and an incremental ACL build for CRE and construction loans resulting from current market conditions.

Current wording

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three and six months ended June 30, 2025, the Company recorded a provision for credit losses of $39.9 million and $71.1 million, respectively, compared to $37.1 million and $52.3 million for the three and six months ended June 30, 2024, respectively. The provision for credit losses for the three and six months ended June 30, 2025 is primarily reflective of net loan charge-offs of $29.6 million and $55.4 million, respectively, and loan growth.

Previous wording

Total non-interest income for the three months ended March 31, 2025 compared to the same period in 2024 decreased $2.5 million. The decrease in non-interest income from the three months ended March 31, 2024 was primarily driven by a decrease in net loan servicing revenue and a loss from equity investments. The decrease in net loan servicing revenue of $24.6 million resulted from fair value losses on MSRs and lower servicing income. The decrease in income from equity investments of $21.9 million was primarily due to the timing of income recognition on an equity investment that is expected to be recovered over time. These decreases were partially offset by increases in service charges and loan fees and income from bank owned life insurance. Service charges and loan fees increased $20.8 million primarily from service charges related to insured deposit products. Income from bank owned life insurance increased $10.4 million due to a new policy that was entered into in the second quarter of 2024.

Current wording

Total non-interest income for the six months ended June 30, 2025 increased $30.6 million compared to the same period in 2024 driven primarily by increases in service charges and loan fees, income from bank owned life insurance, and gain on sales of investment securities as discussed in the above paragraph. These increases were partially offset by decreases in net loan servicing revenue and income from equity investments. The decrease in net loan servicing revenue of $24.4 million resulted from fair value losses on MSRs and lower servicing income. The decrease in income from equity investments of $23.2 million was primarily due to timing of income recognition on an equity investment that is expected to be recovered over time.

Previous wording

Total non-interest expense for the three months ended March 31, 2025 increased $18.6 million compared to the same period in 2024. The increase in non-interest expense was primarily driven by increases in salaries and employee benefits and data processing expenses, partially offset by a decrease in insurance costs. Salaries and employee benefits increased $27.5 million due to increases in average salary and headcount. Data processing expenses increased $9.2 million due to higher software fees and an increase in software depreciation for additional capitalized software placed in service. These increases were partially offset by a decrease in insurance costs of $21.0 million as the prior year period included a $17.6 million charge related to the FDIC special assessment.

Current wording

Total non-interest expense for the three months ended June 30, 2025 increased $27.9 million compared to the same period in 2024 primarily driven by increases in salaries and employee benefits as well as data processing expenses, partially offset by a decrease in deposit costs. Salaries and employee benefits increased $26.9 million due to increases in average salary and headcount. Data processing expenses increased $9.3 million due to higher software fees and an increase in software depreciation. These increases were partially offset by a decrease in deposit costs of $26.3 million as a result of lower ECR rates.

Previous wording

The Company's effective tax rate was 19.2% and 23.5% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to a decrease in nondeductible insurance premiums and an increase in investment tax credit benefits.

Current wording

The Company's effective tax rate was 18.4% and 21.9% for the three months ended June 30, 2025 and 2024, respectively, and 18.8% and 22.7% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three and six month periods ended June 30, 2025 compared to the same periods in 2024 was primarily due to an increase in investment tax credit benefits and decreases in the state blended tax rate and nondeductible insurance premiums.

Previous wording

Total assets increased $2.1 billion to $83.0 billion at March 31, 2025, compared to $80.9 billion at December 31, 2024. The increase in total assets was primarily driven by an increase in deposits, which drove HFI and HFS loan growth and contributed to an increase in investment securities of $773 million as the Company has focused on increasing its holdings of high quality liquid assets. Loans HFI increased $1.1 billion, or 2.0%, to $54.8 billion as of March 31, 2025, compared to $53.7 billion as of December 31, 2024. The increase in loans HFI from December 31, 2024 was driven by increases in commercial and industrial loans and commercial real estate loans of $989 million and $134 million, respectively. Loans HFS increased $952 million from $2.3 billion as of December 31, 2024 due to an increase in agency-conforming and non-EBO loans.

Current wording

Total assets increased $5.8 billion, or 7.2%, to $86.7 billion at June 30, 2025, compared to $80.9 billion at December 31, 2024, supported by an increase in deposits, which drove HFI and HFS loan growth and contributed to an increase in investment securities of $3.5 billion. Loans HFI increased $2.3 billion, or 4.2%, to $55.9 billion as of June 30, 2025, compared to $53.7 billion as of December 31, 2024 driven by increases in commercial and industrial, commercial real estate, and residential loans of $1.8 billion, $311 million, and $139 million, respectively. Loans HFS increased $736 million from $2.3 billion as of December 31, 2024 due to an increase in non-EBO and agency-conforming loans.

Previous wording

Total liabilities increased $1.6 billion to $75.8 billion at March 31, 2025, compared to $74.2 billion at December 31, 2024 due primarily to an increase in total deposits of $3.0 billion, or 4.5%, to $69.3 billion. By type, the increase in deposits from December 31, 2024 was driven by increases of $3.2 billion in non-interest bearing deposits and $520 million in savings and money market accounts, partially offset by decreases in interest bearing demand deposits and certificates of deposit of $371 million and $331 million, respectively. Other borrowings decreased $1.4 billion from December 31, 2024 primarily due to a decrease in FHLB advances.

Current wording

Total liabilities increased $5.1 billion to $79.3 billion at June 30, 2025, compared to $74.2 billion at December 31, 2024 primarily due to an increase in total deposits of $4.8 billion, or 7.2%, to $71.1 billion. By type, the increase in deposits from December 31, 2024 was driven by increases of $4.2 billion in non-interest bearing deposits and $1.0 billion in savings and money market accounts, partially offset by decreases in both interest bearing demand deposits and certificates of deposit of $204 million. Other borrowings increased $479 million from December 31, 2024 primarily due to an increase in long-term FHLB advances.

Previous wording

Total equity of $7.2 billion at March 31, 2025 increased $508 million, or 7.6%, from December 31, 2024. The increase in equity is primarily due to the issuance of preferred stock from the Company's REIT subsidiary, net income of $199.1 million, and unrealized fair value gains on AFS securities, recorded net of tax in OCI. Proceeds from the REIT preferred stock issuance totaled $293 million, net of issuance costs, and was recognized as a noncontrolling interest in subsidiary. These increases were offset in part by quarterly dividends to common and preferred stockholders.

Current wording

Total equity of $7.4 billion at June 30, 2025 increased $700 million, or 10.4%, from December 31, 2024 primarily due to net income of $436.9 million, the issuance of preferred stock from the Company's REIT subsidiary, and unrealized fair value gains on AFS securities, recorded net of tax in OCI. Proceeds from the REIT preferred stock issuance totaled $293 million, net of issuance costs, and was recognized as a noncontrolling interest in subsidiary. These increases were partially offset by quarterly dividends to common and preferred stockholders as well as REIT preferred stockholders.

Previous wording

The Company purchases and originates residential mortgage loans that are held for sale or securitization through its AmeriHome mortgage banking business channel. As of March 31, 2025, loans HFS totaled $3.2 billion, compared to $2.3 billion at December 31, 2024, an increase of $952 million primarily related to an increase in agency-conforming and non-EBO loans.

Current wording

The Company purchases and originates residential mortgage loans that are held for sale or securitization through its AmeriHome mortgage banking business channel. As of June 30, 2025, loans HFS totaled $3.0 billion, compared to $2.3 billion at December 31, 2024, an increase of $736 million primarily related to an increase in non-EBO and agency-conforming loans.

Previous wording

Loans classified as HFI are stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts on acquired and purchased loans, and an ACL. Net deferred loan fees of $108 million and $106 million reduced the carrying value of loans as of March 31, 2025 and December 31, 2024, respectively. Net unamortized purchase premiums on acquired and purchased loans of $175 million increased the carrying value of loans as of March 31, 2025 and December 31, 2024.

Current wording

Loans classified as HFI are stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts on acquired and purchased loans, and an ACL. Net deferred loan fees of $117 million and $106 million reduced the carrying value of loans as of June 30, 2025 and December 31, 2024, respectively. Net unamortized purchase premiums on acquired and purchased loans of $178 million and $175 million increased the carrying value of loans as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

Commercial and industrial loans made up 44% and 43% of total loans HFI as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Commercial and industrial loans made up 45% and 43% of total loans HFI as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

In addition, the Company's loan portfolio includes significant credit exposure to the CRE market as CRE related loans accounted for approximately 30% of total loans at March 31, 2025 and December 31, 2024. Non-owner occupied CRE loans are loans for which the primary source of repayment is rental income generated from the collateral property. Owner occupied CRE loans are loans secured by owner occupied non-farm nonresidential properties for which the primary source of repayment (more than 50%) is the cash flow from the ongoing operations and activities conducted by the borrower who owns the property. These CRE loans are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties.

Current wording

In addition, the Company's loan portfolio includes significant credit exposure to the CRE market as CRE related loans accounted for approximately 30% of total loans at June 30, 2025 and December 31, 2024. Non-owner occupied CRE loans are loans where the primary source of repayment is rental income generated from the collateral property. Owner occupied CRE loans are loans secured by owner occupied non-farm nonresidential properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower who owns the property. These CRE loans are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties.

Previous wording

Approximately $2.4 billion, or 4.3%, of total loans HFI consisted of CRE non-owner occupied office loans as of March 31, 2025, compared to $2.3 billion, or 4.4%, as of December 31, 2024. Of the non-owner occupied office loan balance as of March 31, 2025, $1.0 billion is scheduled to mature in the remainder of 2025. These office loans primarily consist of shorter-term bridge loans that enable borrowers to reposition or redevelop projects with more modern standards attractive to in-office employers in today’s environment, including enhanced on-site amenities. The vast majority of these projects are located in suburban locations in the Company's core footprint states (Arizona, California, and Nevada), with central business district and midtown exposure totaling less than 1% and 10% of office loans as of March 31, 2025, respectively.

Current wording

Approximately $2.1 billion, or 3.8%, of total loans HFI consisted of CRE non-owner occupied office loans as of June 30, 2025, compared to $2.3 billion, or 4.4%, as of December 31, 2024. Of the non-owner occupied office loan balance as of June 30, 2025, $842 million is scheduled to mature in the remainder of 2025. These office loans primarily consist of shorter-term bridge loans that enable borrowers to reposition or redevelop projects with more modern standards attractive to in-office employers in today’s environment, including enhanced on-site amenities. The vast majority of these projects are located in suburban locations in the Company's core footprint states (Arizona, California, and Nevada), with central business district and midtown exposure totaling less than 1% and 11% of office loans as of June 30, 2025, respectively.

Previous wording

Total non-performing loans increased $26 million to $630 million at March 31, 2025, from $604 million at December 31, 2024.

Current wording

Total non-performing loans increased $9 million to $613 million at June 30, 2025, from $604 million at December 31, 2024.

Previous wording

(1)Includes loan modifications to borrowers experiencing financial difficulty of $164 million and $169 million at March 31, 2025 and December 31, 2024, respectively.

Current wording

(1)Includes loan modifications to borrowers experiencing financial difficulty of $103 million and $169 million at June 30, 2025 and December 31, 2024, respectively.

Previous wording

(2)Excludes government guaranteed residential mortgage loans of $275 million and $326 million at March 31, 2025 and December 31, 2024, respectively.

Current wording

(2)Excludes government guaranteed residential mortgage loans of $326 million at June 30, 2025 and December 31, 2024.

Previous wording

Interest income that would have been recorded under the original terms of nonaccrual loans was $8.0 million and $4.9 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Interest income that would have been recorded under the original terms of nonaccrual loans was $8.0 million and $6.9 million for the three months ended June 30, 2025 and 2024, respectively, and $16.0 million and $11.8 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

The performance of these modified loans is monitored for 12 months following the modification. As of March 31, 2025, modified loans of $135 million were current with contractual payments and $164 million were on nonaccrual status. As of December 31, 2024, modified loans of $128 million were current with contractual payments and $169 million were on nonaccrual status.

Current wording

The performance of these modified loans is monitored for 12 months following the modification. As of June 30, 2025, modified loans of $135 million were current with contractual payments and $103 million were on nonaccrual status. As of December 31, 2024, modified loans of $128 million were current with contractual payments and $169 million were on nonaccrual status.

Previous wording

In the normal course of business, the Company also modifies EBO loans, which are delinquent FHA, VA, or USDA insured or guaranteed loans repurchased under the terms of the GNMA MBS program and can be repooled or resold when loans are brought current either through the borrower's reperformance or completion of a loan modification. During the three months ended March 31, 2025 and 2024, the Company completed modifications of EBO loans with an amortized cost of $147 million and $90 million, respectively. These modifications consisted of term extensions, payment delays, and interest rate reductions. Certain of these loans were repooled or resold after modification and are no longer included in the pool of loan modifications being monitored for future performance. As of March 31, 2025, modified EBO loans consisted of $37 million in loans that were current to 89 days delinquent and $12 million in loans 90 days or more delinquent. As of December 31, 2024, modified EBO loans consisted of $29 million in loans that were current to 89 days delinquent and $11 million in loans 90 days or more delinquent.

Current wording

In the normal course of business, the Company also modifies EBO loans, which are delinquent FHA, VA, or USDA insured or guaranteed loans repurchased under the terms of the GNMA MBS program and can be repooled or resold when loans are brought current either through the borrower's reperformance or completion of a loan modification. During the three and six months ended June 30, 2025, the Company completed modifications of EBO loans with an amortized cost of $142 million and $287 million, respectively. During the three and six months ended June 30, 2024, the Company completed modifications of EBO loans with an amortized cost of $103 million and $190 million, respectively. These modifications consisted of term extensions, payment delays, and interest rate reductions. Certain of these loans were repooled or resold after modification and are no longer included in the pool of loan modifications being monitored for future performance. As of June 30, 2025, modified EBO loans consisted of $35 million in loans that were current to 89 days delinquent and $19 million in loans 90 days or more delinquent. As of December 31, 2024, modified EBO loans consisted of $29 million in loans that were current to 89 days delinquent and $11 million in loans 90 days or more delinquent.