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What changed in WESTERN ALLIANCE BANCORPORATION's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WESTERN ALLIANCE BANCORPORATION's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+449 added−435 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-25)

Top changes in WESTERN ALLIANCE BANCORPORATION's 2025 10-K

449 paragraphs added · 435 removed · 341 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+19 added−23 removed41 unchanged
Biggest changeThe table below presents the Company's employee turnover rate by age group: Year ended December 31, Turnover Rate by Age Group 2024 2023 (1) 2022 (1) Under 30 19 % 18 % 27 % Between 30-50 14 14 15 Over 50 15 14 15 (1) Excludes the impact of reductions in workforce during the period.
Biggest changeHuman Capital Metrics The table below presents the percentage of Company's workforce that identified as part of an ethic minority group or were women: December 31, 2025 2024 2023 (as a percentage of total employees) Employees belonging to an ethnic minority group 46 % 45 % 44 % Female employees 48 50 51 The table below presents the Company's overall employee turnover rate, excluding the impact of any reductions in workforce during the period: Year ended December 31, 2025 2024 2023 Turnover Rate 12 % 15 % 14 % The table below presents the Company's employee turnover rate by age group, excluding the impact of any reductions in workforce during the period: Year ended December 31, Turnover Rate by Age Group 2025 2024 2023 Under 30 11 % 19 % 18 % Between 30-50 11 14 14 Over 50 12 15 14 In 2025, the Company's turnover rate was highest among employees in the Over 50 age group, compared to both 2024 and 2023, where the turnover rate was highest among employees in the Under 30 age group. 14 Table of Contents Supervision and Regulation The Company and its subsidiaries are extensively regulated and supervised under both federal and state laws.
Deposit Products The Company offers a variety of deposit products, including demand deposits, checking accounts, savings accounts, money market accounts, and other types of deposit accounts, including fixed-rate, fixed maturity certificates of deposit. The Company has historically focused on growing its lower cost core customer deposits.
Deposit Products The Company offers a variety of deposit products, including demand deposits, checking, savings, money market, and other types of deposit accounts, including fixed-rate, fixed maturity certificates of deposit. The Company has historically focused on growing its lower cost core customer deposits.
Market Segments The Company's reportable segments are aggregated with a focus on products and services offered and consist of three reportable segments: • Commercial segment: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry. • Consumer Related segment: offers commercial banking services to enterprises in consumer-related sectors, as well as consumer banking services, such as residential mortgage banking. • Corporate & Other: consists of the Company's investment portfolio, Corporate borrowings and other related items, as well as income and expense items not allocated to other reportable segments and inter-segment eliminations. 5 Table of Contents Loan and deposit accounts are typically assigned directly to the segments where these products are originated and/or serviced.
Market Segments The Company's operating segments are aggregated with a focus on products and services offered and consist of three reportable segments: • Commercial: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry. • Consumer Related: offers commercial banking services to enterprises in consumer-related sectors, as well as consumer banking services, such as residential mortgage banking. • Corporate & Other: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to other reportable segments, and inter-segment eliminations. 5 Table of Contents Loan and deposit accounts are typically assigned directly to the segments where these products are originated and/or serviced.
In addition to the Company's deposit base, it has access to other sources of funding, including FHLB and FRB advances, Federal funds purchased, repurchase agreements, and secured and unsecured lines of credit with other financial institutions. Previously, the Company has also accessed the capital markets through trust preferred, credit linked note, subordinated debt, and Senior Note offerings.
In addition to the Company's deposit base, it has access to other sources of funding, including FHLB and FRB advances, Federal funds purchased, repurchase agreements, and secured and unsecured lines of credit with other financial institutions. Previously, the Company has also accessed the capital markets through trust preferred, credit linked note, and subordinated debt offerings.
All loans 90 days or more past due and all loans on non-accrual status are considered at least "Substandard," unless extraordinary circumstances would suggest otherwise. • “Doubtful” (Grade 8): These assets have all the weaknesses inherent in those classified as "Substandard" with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable, but because of certain known factors which may work to the advantage and strengthening of the asset (for example, capital injection, perfecting liens on additional collateral and refinancing plans), classification as an estimated loss is deferred until a more precise status may be determined. • “Loss” (Grade 9): These assets are considered uncollectible and having such little recoverable value that it is not practical to defer writing off the asset.
All loans 90 days or more past due and all loans on nonaccrual status are considered at least "Substandard," unless extraordinary circumstances would suggest otherwise. • “Doubtful” (Grade 8): These assets have all the weaknesses inherent in those classified as "Substandard" with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable, but because of certain known factors which may work to the advantage and strengthening of the asset (for example, capital injection, perfecting liens on additional collateral and refinancing plans), classification as an estimated loss is deferred until a more precise status may be determined. • “Loss” (Grade 9): These assets are considered uncollectible and having such little recoverable value that it is not practical to defer writing off the asset.
WAL also has eight unconsolidated subsidiaries used as business trusts in connection with issuance of trust-preferred securities as described in "Note 12. Qualifying Debt" in Item 8 of this Form 10-K.
WAL also has unconsolidated subsidiaries used as business trusts in connection with issuance of trust-preferred securities as described in "Note 12. Qualifying Debt" in Item 8 of this Form 10-K.
The SEC maintains an internet site at http://www.sec.gov , from which all forms filed electronically may be accessed. The Company’s internet website and the information contained therein are not incorporated into this Form 10-K. In addition, copies of the Company’s annual report will be made available, free of charge, upon written request. 14 Table of Contents
The SEC maintains an internet site at http://www.sec.gov , from which all forms filed electronically may be accessed. The Company’s internet website and the information contained therein are not incorporated into this Form 10-K. In addition, copies of the Company’s annual report will be made available, free of charge, upon written request. 15 Table of Contents
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 with central business district and midtown exposure of less than 1% and 11% of office loans, respectively.
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 with central business district and midtown exposure of less than 1% and 10% of office loans, respectively.
In addition to salaries, these programs include annual bonuses, stock awards, a 401(k) Plan with an employer matching contribution, healthcare, life insurance and other benefits, health savings and flexible spending accounts, and various paid time off benefits. Throughout the organization, 100% of employees participate in the annual bonus plan or are eligible to receive business incentives.
In addition to salaries, these programs include annual bonuses, stock awards, a 401(k) Plan with an employer matching contribution, healthcare, life insurance and other benefits, health savings and flexible spending accounts, and various paid time off benefits. Throughout the organization, 95% of employees participate in the annual bonus plan or are eligible to receive business incentives.
Any difference in the corporate tax rate and the aggregate effective tax rates in the segments are reflected in the Corporate & Other segment. Lending Activities General Through WAB and its banking divisions and operating subsidiaries, the Company provides a variety of lending products to customers, including the loan types discussed below.
Any difference in the corporate tax rate and the aggregate effective tax rates in the segments are reflected in the Corporate & Other segment. Lending Activities General Through WAB and its operating subsidiaries, the Company provides a variety of lending products to customers, including the loan types discussed below.
In addition, the grading of the Company's loan portfolio is reviewed on a regular basis by its internal loan review department. Collection Procedure Bank personnel are responsible for monitoring activity that may indicate an increased risk rating, including, but not limited to, past-dues, overdrafts, and loan agreement covenant defaults related to its commercial borrowers.
In addition, the grading of the Company's loan portfolio is reviewed on a regular basis by its internal loan review department. Collection Procedure Bank personnel are responsible for monitoring activity that may indicate an increased risk rating, including, but not limited to, past due payments, overdrafts, and loan agreement covenant defaults related to its commercial borrowers.
The CFO and Treasurer have the authority to purchase and sell securities within specified guidelines. All investment transactions for the Bank and for the holding company during the year ended December 31, 2024 were reviewed by the ALCO and BOD.
The CFO and Treasurer have the authority to purchase and sell securities within specified guidelines. All investment transactions for the Bank and for the holding company during the year ended December 31, 2025 were reviewed by the ALCO and BOD.
An analysis of each construction project is performed as part of the underwriting process to 6 Table of Contents determine whether the type of property, location, construction costs, and contingency funds are appropriate and adequate. Loans to finance commercial raw land are primarily to borrowers who plan to initiate active development of the property within two years.
An analysis of each construction project is performed as part of the underwriting process to determine whether the type of property, location, construction costs, and contingency funds are appropriate and adequate. Loans to finance commercial raw land are primarily to borrowers who plan to initiate active development of the property within two years.
In general, loans are placed on non-accrual status when the Company determines ultimate collection of principal and interest is in doubt due to the borrower’s financial condition, collateral value, and collection efforts. In addition, the Company considers all loans rated Substandard or worse to be experiencing financial difficulty.
In general, loans are placed on nonaccrual status when the Company determines ultimate collection of principal and interest is in doubt due to the borrower’s financial condition, collateral value, and collection efforts. In addition, the Company considers all loans rated Substandard or worse to be experiencing financial difficulty.
Bank Subsidiary At December 31, 2024, WAL has the following bank subsidiary: Bank Name Headquarters Location Cities Total Assets Net Loans Deposits (in millions) Western Alliance Bank Phoenix, Arizona Arizona: Chandler, Flagstaff, Gilbert, Mesa, Phoenix, Scottsdale, and Tucson $ 80,862 $ 55,588 $ 66,760 Nevada: Carson City, Fallon, Henderson, Las Vegas, Mesquite, Reno, and Sparks California: Beverly Hills, Carlsbad, Costa Mesa, Irvine, La Mesa, Los Angeles, Oakland, Pleasanton, San Diego, San Francisco, San Jose, and Woodland Hills Other: Atlanta, Georgia; Austin, Houston, and Irving, Texas; Boston, Massachusetts; Chicago, Illinois; Columbus, Ohio; Denver, Colorado; Minneapolis, Minnesota; New York, New York; Seattle, Washington; and Tysons, Virginia WAB has the following wholly-owned operating subsidiaries: • WABT holds certain investment securities, municipal and non-profit loans, and leases. • WA PWI holds interests in certain limited partnerships invested primarily in low income housing tax credits and small business investment corporations. • BW Real Estate, Inc. operates as a real estate investment trust and holds certain of WAB's real estate loans and related securities. • Helios Prime, Inc. holds interests in certain limited partnerships invested in renewable energy projects. • Western Finance Company purchases and originates equipment finance leases and provides mortgage banking services through its wholly-owned subsidiary, AmeriHome. • DST provides digital payments services for the class action legal industry.
Bank Subsidiary At December 31, 2025, WAL has the following bank subsidiary: Bank Name Headquarters Location Cities Total Assets Net Loans Deposits (in millions) Western Alliance Bank Phoenix, Arizona Arizona: Chandler, Flagstaff, Gilbert, Mesa, Phoenix, Scottsdale, and Tucson $ 92,736 $ 61,714 $ 77,639 Nevada: Carson City, Fallon, Henderson, Las Vegas, Mesquite, Reno, and Sparks California: Beverly Hills, Carlsbad, Costa Mesa, Irvine, La Mesa, Los Angeles, Oakland, Pleasanton, San Diego, San Francisco, San Jose, and Woodland Hills Other: Atlanta, Georgia; Austin, Houston, and Irving, Texas; Boston, Massachusetts; Chicago, Illinois; Columbus, Ohio; Denver, Colorado; Minneapolis, Minnesota; New York, New York; Seattle, Washington; and Tysons, Virginia WAB has the following operating subsidiaries: • WABT holds certain investment securities, municipal and non-profit loans, and leases. • WA PWI holds interests in certain limited partnerships invested primarily in low income housing tax credits and small business investment corporations. • BW Real Estate, Inc. operates as a real estate investment trust and holds certain of WAB's real estate loans and related securities. • Helios Prime, Inc. holds interests in certain limited partnerships invested in renewable energy projects. • Western Finance Company purchases and originates equipment finance leases and provides mortgage banking services through its wholly-owned subsidiary, AmeriHome. • DST provides digital payments services for the class action legal industry.
As of December 31, 2024 and 2023, 16% of the Company's CRE loans were owner occupied. 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.
As of December 31, 2025 and 2024, 14% and 16% of the Company's CRE loans were owner occupied, respectively. 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.
In addition, 30% and 33% of the Company's HFI loan portfolio at December 31, 2024 and 2023, respectively, was represented by CRE and construction and land development loans. The Company’s CRE business is concentrated primarily in the Company's core footprint states: Arizona, California, and Nevada. Consequently, the Company is dependent on the trends of these regional economies.
In addition, 27% and 30% of the Company's HFI loan portfolio at December 31, 2025 and 2024, respectively, was represented by CRE and construction and land development loans. The Company’s CRE business is concentrated primarily in the Company's core footprint states: Arizona, California, and Nevada. Consequently, the Company is dependent on the trends of these regional economies.
This portfolio includes single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments. These loans are primarily originated to experienced local and national developers with whom the Company has a satisfactory lending history.
This portfolio includes single family and multi-family residential 6 Table of Contents projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments. These loans are primarily originated to experienced local and national developers with whom the Company has a satisfactory lending history.
Non-owner occupied CRE loans are CRE loans for which the primary source of repayment is rental income generated from the collateral property. Construction and Land Development: Construction and land development loans comprise 8% and 10% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively.
Non-owner occupied CRE loans are CRE loans for which the primary source of repayment is rental income generated from the collateral property. Construction and Land Development: Construction and land development loans comprise 7% and 8% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively.
Commercial and Industrial: Commercial and industrial loans comprise 43% and 38% of the Company's HFI loan portfolio as of December 31, 2024 and 2023, respectively. These loans include working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, and other commercial loans.
Commercial and Industrial: Commercial and industrial loans comprise 48% and 43% of the Company's HFI loan portfolio as of December 31, 2025 and 2024, respectively. These loans include working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, and other commercial loans.
As a matter of longstanding practice, the Arizona Department of Insurance and Financial Institutions uses the same aggregation analysis as applied to national banks by the Office of the Comptroller of the Currency. Concentrations of Credit Risk.
As a matter of longstanding practice, the Arizona Department of Insurance and Financial Institutions uses the same aggregation analysis as applied to national banks by the OCC. Concentrations of Credit Risk.
However, seasonality in the Company's mortgage warehouse deposits may impact lending activities. Competition The financial services industry is highly competitive and has been significantly impacted by federal and state legislation that makes it easier for non-bank financial institutions to compete with the Company.
However, seasonality in the Company's mortgage warehouse deposits may impact lending activities. Competition The financial services industry is highly competitive and has been significantly impacted by technology and regulatory conditions that makes it easier for non-bank financial institutions to compete with the Company.
Recently, the Company has also focused on expanding into new deposit channels, including online consumer focused deposit initiatives. As of December 31, 2024, the deposit portfolio was comprised of 28% non-interest-bearing deposits and 72% interest-bearing deposits. The competition for deposits in the Company's markets is strong.
Recently, the Company has also focused on expanding into new deposit channels, including online consumer focused deposit initiatives. As of December 31, 2025, the Company's deposit portfolio was comprised of 32% non-interest-bearing deposits and 68% interest-bearing deposits. The competition for deposits in the Company's markets is strong.
The Bank considers a number of factors when determining deposit rates, including: • current and projected national and local economic conditions and the outlook for interest rates; • competition for deposits; • loan and deposit positions and forecasts, including any concentrations in either; and • alternative borrowing costs from the FHLB or other sources. 11 Table of Contents The following table shows the Company's deposit composition: December 31, 2024 2023 Amount Percent Amount Percent (in millions) Non-interest-bearing demand deposits $ 18,846 28.4 % $ 14,520 26.2 % Interest-bearing transaction accounts 15,878 23.9 15,916 28.8 Savings and money market accounts 21,208 32.0 14,791 26.7 Time certificates of deposit ($250,000 or more) 1,640 2.5 1,478 2.7 Other time deposits (1) 8,769 13.2 8,628 15.6 Total deposits $ 66,341 100.0 % $ 55,333 100.0 % (1) Retail brokered time deposits over $250,000 of $5.6 billion and $5.8 billion as of December 31, 2024 and 2023, respectively, are included within Other time deposits as these deposits are generally participated out by brokers in shares below the FDIC insurance limit.
The Bank considers a number of factors when determining deposit rates, including: • current and projected national and local economic conditions and the outlook for interest rates; • competition for deposits; • loan and deposit positions and forecasts, including any concentrations in either; and • alternative borrowing costs from the FHLB or other sources. 11 Table of Contents The following table shows the Company's deposit composition: December 31, 2025 2024 Amount Percent Amount Percent (dollars in millions) Non-interest-bearing demand deposits $ 24,353 31.6 % $ 18,846 28.4 % Interest-bearing transaction accounts 18,416 23.9 15,878 23.9 Savings and money market accounts 24,586 31.9 21,208 32.0 Time certificates of deposit ($250,000 or more) 2,276 2.9 1,640 2.5 Other time deposits (1) 7,528 9.7 8,769 13.2 Total deposits $ 77,159 100.0 % $ 66,341 100.0 % (1) Retail brokered time deposits over $250,000 of $4.3 billion and $5.6 billion as of December 31, 2025 and 2024, respectively, are included within Other time deposits as these deposits are generally participated out by brokers in shares below the FDIC insurance limit.
The average duration, which is a measure of the interest rate sensitivity of the Company's debt securities portfolio, is 3.4 years as of December 31, 2024. 10 Table of Contents The following table summarizes the carrying value of the Company's investment securities: December 31, 2024 2023 Amount Percent Amount Percent (dollars in millions) Debt securities Residential MBS issued by GSEs $ 5,831 38.6 % $ 1,972 15.5 % U.S.
The average duration, which is a measure of the interest rate sensitivity of the Company's debt securities portfolio, is 5.1 years as of December 31, 2025. 10 Table of Contents The following table summarizes the carrying value of the Company's investment securities: December 31, 2025 2024 Amount Percent Amount Percent (dollars in millions) Debt securities Residential MBS issued by GSEs and GNMA $ 7,230 35.3 % $ 5,831 38.6 % U.S.
Customer, Product, and Geographic Concentrations Commercial and industrial loans make up 43% and 38% of the Company's HFI loan portfolio as of December 31, 2024 and 2023, respectively. Residential loans comprise 27% and 29% of the Company's HFI loan portfolio as of December 31, 2024 and 2023, respectively.
Customer, Product, and Geographic Concentrations Commercial and industrial loans make up 48% and 43% of the Company's HFI loan portfolio as of December 31, 2025 and 2024, respectively. Residential loans comprise 25% and 27% of the Company's HFI loan portfolio as of December 31, 2025 and 2024, respectively.
Summary of Significant Accounting Policies" in Item 8 of this Form 10-K. As of December 31, 2024, the Company's investment securities portfolio totaled $15.1 billion, representing approximately 19% of the Company's total assets, with a significant portion of the portfolio invested in AAA/AA+ rated securities.
Summary of Significant Accounting Policies" in Item 8 of this Form 10-K. As of December 31, 2025, the Company's investment securities portfolio totaled $20.5 billion, representing approximately 22% of the Company's total assets, with a significant portion of the portfolio invested in AAA/AA rated securities.
The Company's investment policy limits new securities purchases to certain eligible investment types and, in the aggregate, are further subject to the following quantitative limits of the Bank, which are calculated as a percent of CET1, as of December 31, 2024: Securities Category Policy Limit Actual Held-to-maturity Tax-exempt low income housing development bonds 35.0 % 19.9 % Available-for-sale debt and equity securities CLO 22.5 8.4 Corporate debt securities 10.0 6.0 High quality liquid assets: Non‐GNMA 70.0 36.4 GNMA 92.5 61.7 Private label residential MBS 25.0 16.9 Municipal securities and tax-exempt low income housing development bonds 20.0 13.9 U.S.
The Company's investment policy limits new securities purchases to certain eligible investment types and, in the aggregate, are further subject to the following quantitative limits of the Bank, which are calculated as a percent of CET1, as of December 31, 2025: Securities Category Policy Limit Actual Held-to-maturity Tax-exempt low income housing development bonds 35.0 % 19.1 % Available-for-sale debt and equity securities CLO 57.5 36.8 Corporate debt securities 10.0 4.1 High quality liquid assets: Non‐GNMA 52.5 33.2 GNMA 110.0 75.7 Private label residential MBS 25.0 15.9 Municipal securities and tax-exempt low income housing development bonds 20.0 12.1 U.S.
Loans deemed uncollectible are charged-off. 8 Table of Contents Nonperforming Assets Nonperforming assets include loans past due 90 days or more and still accruing interest (that are not government guaranteed), non-accrual and accruing restructured loans, and repossessed assets, including OREO.
Loans deemed uncollectible are charged-off. Nonperforming Assets Nonperforming assets include loans past due 90 days or more and still accruing interest (that are not government guaranteed), nonaccrual and accruing restructured loans, and repossessed assets, including OREO.
These efforts include increased frequency of meetings with business line owners, early engagement of the Company's special assets group, and inclusion of pass grade loans with a potential for downgrade in asset quality and problem loan meeting discussions. Loans to One Borrower.
These efforts include increased frequency of meetings with business line owners, early engagement of the Company's special assets group, and inclusion of pass grade loans with a potential for downgrade in asset quality and problem loan meeting discussions. The BOD approves all material changes to loan policy, as well as lending limit authorities.
At December 31, 2024, the Company's HFI loan portfolio totaled $53.7 billion, or approximately 66% of total assets.
At December 31, 2025, the Company's HFI loan portfolio totaled $58.7 billion, or approximately 63% of total assets.
The following table sets forth the composition of the Company's HFI loan portfolio: December 31, 2024 2023 Amount Percent Amount Percent (dollars in millions) Commercial and industrial $ 23,128 43.1 % $ 19,103 38.0 % Commercial real estate - non-owner occupied 9,868 18.4 9,650 19.2 Commercial real estate - owner occupied 1,825 3.4 1,810 3.6 Construction and land development 4,479 8.3 4,889 9.7 Residential real estate 14,326 26.7 14,778 29.4 Consumer 50 0.1 67 0.1 Loans HFI, net of deferred loan fees and costs $ 53,676 100.0 % $ 50,297 100.0 % Allowance for credit losses (374) (337) Net loans HFI $ 53,302 $ 49,960 For additional information regarding loans, see "Note 4.
The following table sets forth the composition of the Company's HFI loan portfolio: December 31, 2025 2024 Amount Percent Amount Percent (dollars in millions) Commercial and industrial $ 27,928 47.6 % $ 23,128 43.1 % Commercial real estate - non-owner occupied 10,340 17.6 9,868 18.4 Commercial real estate - owner occupied 1,683 2.9 1,825 3.4 Construction and land development 4,055 6.9 4,479 8.3 Residential real estate 14,652 25.0 14,326 26.7 Consumer 19 0.0 50 0.1 Loans HFI, net of deferred loan fees and costs $ 58,677 100.0 % $ 53,676 100.0 % Allowance for credit losses (461) (374) Net loans HFI $ 58,216 $ 53,302 For additional information regarding loans, see "Note 4.
Set forth below are the primary segmentation limits and actual measures based on outstanding amounts as of December 31, 2024: Percent of Tier 1 Capital and ACL (1) Policy Limit Actual Loans HFI CRE 230 % 165 % Commercial and industrial 550 327 Construction and land development 85 63 Residential real estate 260 202 Consumer 7 1 Loans HFS Residential real estate 60 32 (1) ACL refers to the allowance for credit losses on funded loans.
Set forth below are the primary segmentation limits and actual measures based on outstanding amounts as of December 31, 2025: Percent of Tier 1 Capital and ACL (1) Policy Limit Actual Loans HFI CRE non-owner occupied 185 % 127 % CRE owner occupied 45 21 Commercial and industrial 550 344 Construction and land development 85 50 Residential real estate 260 180 Consumer 7 0 Loans HFS Residential real estate 60 42 (1) ACL refers to the allowance for credit losses on funded loans.
To support these efforts, the Company has established Wellness Committees to engage its people in well-being initiatives that provide opportunities for employees to develop healthier lifestyles by promoting habits and attitudes that support wellness. Supervision and Regulation The Company and its subsidiaries are extensively regulated and supervised under both federal and state laws.
To support these efforts, the Company has established Wellness Committees to engage its people in well-being initiatives that provide opportunities for employees to develop healthier lifestyles by promoting habits and attitudes that support wellness.
Technological innovation and capabilities, including changes in product delivery systems and web-based tools, also continue to contribute to greater competition in domestic and international financial services markets and larger competitors may be able to allocate more resources to these technology initiatives. 12 Table of Contents Human Capital Resources The Company’s culture is defined by its corporate values of integrity, creativity, teamwork, passion, and excellence.
Technological innovation and capabilities, including changes in product delivery systems and web-based tools, also continue to contribute to greater competition in domestic and international financial services markets and larger competitors may be able to allocate more resources to these technology initiatives. 12 Table of Contents Human Capital Resources People are the foundation of the Company and we invest in their success.
For additional information concerning investments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations and Financial Condition – Investments” in Item 7 of this Form 10-K.
As of December 31, 2025 and 2024, the Company's investments in BOLI totaled $1.1 billion and $1.0 billion, respectively. For additional information concerning investments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations and Financial Condition – Investments” in Item 7 of this Form 10-K.
In addition, in connection with their examinations of the Bank, examiners have authority to identify problem assets and, if appropriate, re-classify them. A loan grade of "Special Mention" from the Company's internal loan grading system is utilized to identify potential problem assets and loan grades of "Substandard," "Doubtful," and "Loss" are utilized to identify actual problem assets.
A loan grade of "Special Mention" from the Company's internal loan grading system is utilized to identify potential problem assets and loan grades of "Substandard," "Doubtful," and "Loss" are utilized to identify actual problem assets.
Credits in excess of subcommittee approval authority require the approval of the Bank's SLC, which has the highest level of credit approval authority.
The subcommittees consist of members of the Bank's senior management and senior credit officers. 7 Table of Contents • SLC. Credits in excess of subcommittee approval authority require the approval of the Bank's SLC, which has the highest level of credit approval authority.
In addition to the limits set forth below, subject to certain exceptions, state banking laws generally limit the amount of funds a bank may lend to a single borrower.
SLC membership includes the CEO and other senior executives appointed by the CEO and is chaired by the Bank's CCO. Loans to One Borrower. In addition to the limits set forth below, subject to certain exceptions, state banking laws generally limit the amount of funds a bank may lend to a single borrower.
The Company also provides an array of specialized financial services to business customers across the country, including mortgage banking services through AmeriHome, treasury management services to the homeowner's association sector, and digital payment services for the class action legal industry.
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.
A restructured loan is a loan modification for a borrower experiencing financial difficulty. Other repossessed assets result from loans where the Company has received title or physical possession of the borrower’s assets. The Company generally re-appraises OREO and collateral dependent non-residential loans with balances greater than $0.5 million every 12 months.
A restructured loan is a loan modification for a borrower experiencing financial difficulty. Other repossessed assets result from loans where the Company has received title or physical possession of the borrower’s assets.
The Company encourages its employees to take an active role in their career and through the annual performance management process, employees are able to identify individual development goals and create an action plan to achieve these goals.
Our people take an active role in managing their careers, and through the annual performance management process, they identify individual development goals and create action plans to achieve them.
Equipment loans and leases and loans to tax-exempt municipalities and not-for-profit organizations are also categorized as commercial and industrial loans. Residential: Residential loans comprise 27% and 29% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively.
Equipment loans and leases and loans to tax-exempt municipalities and not-for-profit organizations are also categorized as commercial and industrial loans.
The Company executes flow and bulk residential loan purchases that meet the Company's goals and underwriting criteria through its residential mortgage acquisition program. These loan purchases consist of both conforming and non-conforming loans. Non-conforming loan purchases are generally limited to borrowers with high FICO scores and loans with low loan-to-value ratios.
Residential: Residential loans comprise 25% and 27% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively. The Company executes flow and bulk residential loan purchases that meet the Company's goals and underwriting criteria through its residential mortgage acquisition program. These loan purchases consist of both conforming and non-conforming loans.
Treasury securities & agency notes with maturities greater than 1 year (1) 50.0 — CRA 5.0 1.0 Preferred stock 5.0 1.4 (1) There is no investment policy limit for purchases of U.S. Treasury securities with maturities less than 1 year.
Treasury securities and agency notes with a duration greater than 3 years (1) 35.0 — CRA 5.0 1.0 Preferred stock 5.0 0.7 (1) Includes the impact of fixed to floating fair value hedges on U.S. Treasury Securities. There is no investment policy limit for purchases of U.S. Treasury securities with a duration less than 3 years.
As of December 31, 2024, the Company employed 3,524 full-time equivalent employees, an increase of 8% from December 31, 2023. The Company’s employees are not represented by a union or covered by a collective bargaining agreement. Human Capital Metrics The Company is committed to maintaining a dynamic and diverse workforce and provides equal opportunity in all aspects of employment.
As of December 31, 2025, the Company employed 3,769 full-time equivalent employees, an increase of 7% from December 31, 2024. The Company’s employees are not represented by a union or covered by a collective bargaining agreement.
Treasury securities 4,383 29.0 4,853 38.2 Tax-exempt 2,195 14.5 2,101 16.5 Private label residential MBS 1,123 7.4 1,303 10.2 CLO 570 3.8 1,399 11.0 Commercial MBS issued by GSEs 437 2.9 530 4.2 Corporate debt securities 386 2.6 367 2.9 Other 69 0.4 69 0.5 Total debt securities $ 14,994 99.2 % $ 12,594 99.0 % Equity securities Preferred stock $ 91 0.6 % $ 100 0.8 % CRA investments 26 0.2 26 0.2 Total equity securities $ 117 0.8 % $ 126 1.0 % Total investment securities $ 15,111 100.0 % $ 12,720 100.0 % As of December 31, 2024 and 2023, the Company also held investments in BOLI of $1.0 billion and $186 million, respectively.
Treasury securities 5,970 29.2 4,383 29.0 CLO 2,747 13.4 570 3.8 Tax-exempt 2,221 10.9 2,195 14.5 Private label residential MBS 1,204 5.9 1,123 7.4 Commercial MBS issued by GSEs and GNMA 635 3.1 437 2.9 Corporate debt securities 297 1.5 386 2.6 Other 68 0.3 69 0.4 Total debt securities $ 20,372 99.6 % $ 14,994 99.2 % Equity securities Preferred stock 52 0.3 91 0.6 CRA investments 27 0.1 26 0.2 Total equity securities $ 79 0.4 % $ 117 0.8 % Total Investment Securities $ 20,451 100.0 % $ 15,111 100.0 % The Company also holds investments in BOLI, which is used as a tax efficient method to help offset employee benefit costs.
Approximately $2.3 billion, or 4.4%, of total loans HFI consisted of CRE non-owner occupied office loans as of December 31, 2024, compared to $2.4 billion, or 4.7%, as of December 31, 2023.
These CRE loans are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties. Approximately $2.1 billion, or 3.7%, of total loans HFI consisted of CRE non-owner occupied office loans as of December 31, 2025, compared to $2.3 billion, or 4.4%, as of December 31, 2024.
Item 1. Business. Organization Structure and Description of Services WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware.
Item 1. Business. Organization Structure and Description of Services 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.
To foster this development, the Company has created three early talent identification programs, a college internship program, the CBDP, and iLead, with the goal of each program being to enhance management’s ability to promote pathways for growth of future leaders. Campus recruitment initiatives and partnerships also help expand the Company’s pipeline of talent.
To support early career development, the Company has established three early talent identification programs: a college internship program, the CBDP, and iLEAD. Each program is designed to strengthen management’s ability to identify and promote growth pathways for future leaders.
Loan officers actively monitor their individual credit relationships in order to report suspected risks and potential downgrades as early as possible. The BOD approves all material changes to loan policy, as well as lending limit authorities.
Loan officers actively monitor their individual credit relationships in order to report suspected risks and potential downgrades as early as possible as the Company's credit monitoring strategy continues to be focused on early identification and elevation of potential problem loans.
CRE: Loans to fund the purchase or refinancing of CRE for investors (non-owner occupied) or owner occupants represent 22% and 23% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively. These CRE loans are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties.
Non-conforming loan purchases are generally limited to borrowers with high FICO scores and loans with low loan-to-value ratios. CRE: Loans to fund the purchase or refinancing of CRE for investors (non-owner occupied) or owner occupants represent 20% and 22% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively.
Our people are committed to our clients’ success and, by putting clients first, we create strong stockholder returns. This leads to tremendous possibilities to fuel client growth and support the Company’s communities. The Company is deeply committed to giving back to the communities where it does business and strives to help low-to-moderate income geographies become healthier and more sustainable communities.
Our people are committed to our clients’ success and, by putting clients first, we create strong stockholder performance. This leads to tremendous possibilities to fuel client growth and support our communities, and in turn provide expanding opportunities to attract and retain our people.
Although the Company does not pay interest to depositors of non-interest-bearing accounts, earnings credits and referral fees are awarded to certain account holders, which offset charges incurred by account holders for other services.
Although the Company does not pay interest to depositors of non-interest-bearing accounts, earnings credits are awarded to certain customers, which can be used to offset applicable bank charges, and in certain cases, loan interest. Earnings credits in excess of these amounts are recorded in Deposit costs as part of non-interest expense in the Consolidated Income Statement.
Earnings credits and referral fees earned in excess of charges incurred by account holders are recorded in Deposit costs as part of non-interest expense and fluctuate as a result of eligible deposit balances and ECR rates on these deposit balances.
The Company also pays referral fees for certain interest bearing or non-interest bearing deposits that are referred to the Bank, which are also classified as Deposit costs. Earnings credits and referral fees fluctuate as a result of eligible deposit balances and applicable rates on these deposit balances.
Credits in excess of individual credit authorities but less than SLC approval thresholds are submitted to the appropriate subcommittee based on risk segment. The Company's risk segments are defined primarily by product lines organized based on loan type and risk profile. The subcommittees consist of members of the Bank's senior management and senior credit officers. • SLC.
Credits in excess of individual credit authorities but less than SLC approval thresholds are submitted to the appropriate subcommittee. The Company's loan committee structures are aligned with a product focus, namely CRE and C&I loan committees, to help ensure consistency in underwriting, portfolio management, and loan monitoring metrics.
People, Performance, and Possibilities capture the Company's defining values and behaviors that shape our unique culture and how we do business. People are the foundation of the Company and the Company invests in their success by providing expanded opportunities for career growth and advancement.
Culture and Engagement The Company’s culture is defined by its corporate values of integrity, creativity, teamwork, passion, and excellence. People, Performance, and Possibilities capture the Company’s defining values and behaviors that shape our unique culture and how we do business. These values guide how we conduct our business, support our people, and serve our clients each day.
Removed
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 , together with its banking divisions: ABA, BON, FIB, Bridge, and TPB.
Added
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.
Removed
SLC membership includes the CEO and other senior executives appointed by the CEO and is chaired by the Bank's CCO. 7 Table of Contents Management and monitoring of credit risk for the Company's overall lending portfolio continues to be a high priority.
Added
A subset of commercial and industrial loans consist of loans to NDFIs, which, as defined by regulatory guidance, are entities that provide services similar to traditional banks but do not accept deposits from the general public and are not regulated by Federal banking agencies.
Removed
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.
Added
The Company generally re-appraises OREO and collateral dependent non-residential loans with balances greater than $0.5 million every 12 months. 8 Table of Contents Criticized Assets Federal bank regulators require banks to classify their assets on a regular basis. In addition, in connection with their examinations of the Bank, examiners have authority to identify problem assets and, if appropriate, re-classify them.
Removed
To this end, and to drive consistency in underwriting, portfolio management, and loan monitoring metrics, in January 2024, the Company aligned its loan committee structures to a product focus, creating new CRE and C&I loan committees, which is a shift away from its former divisional or NBL focused loan committees.
Added
The Company is committed to giving back to the communities where it does business and strives to help low-to-moderate income geographies become healthier and more sustainable communities. Employees are encouraged to contribute their time and expertise to charitable and civic organizations they are passionate about.
Removed
The Company has also undertaken efforts during the year to streamline its credit risk monitoring process to enable management to more centrally track and monitor assets. In addition, the Company's credit monitoring strategy continues to be focused on early identification and elevation of potential problem loans.
Added
The Company is also committed to providing financial support for education, affordable housing, and community development lending and investments. Recruiting, Retention, Talent Development and Succession The Company recognizes that its people are its most important asset and is committed to attracting, retaining, and developing exceptional talent.
Removed
Total net gains and losses on sales and reappraisals of repossessed and other assets was not significant during each of the years ended December 31, 2024, 2023, and 2022. However, losses may be experienced in future periods. Criticized Assets Federal bank regulators require banks to classify their assets on a regular basis.
Added
The success of the business depends on hiring and retaining highly qualified and motivated people at all levels. Our people are part of a dynamic and diverse workforce and the Company provides equal opportunity in all aspects of employment. Retaining a qualified workforce of key contributors with a range of backgrounds and experiences remains an important objective.
Removed
BOLI is used as a tax efficient method to help offset employee benefit costs. The increase in BOLI from December 31, 2023 is attributable to the purchase of a new BOLI policy during the year.
Added
As a growing company, we endeavor to recruit individuals motivated to contribute, innovate, and build long‑term careers. The Company prioritizes internal mobility and professional development through training, mentorship, succession planning, and career development resources. The Company also builds talent pipelines by engaging with community and educational institutions and recruiting individuals representative of the communities it serves.
Removed
The earnings from the new BOLI separate life policy are linked to the performance of a pool of highly rated (AA or better) CLO securities, secured by a stable value wrap that provides a level of stability to the investment performance of the underlying CLO portfolio.
Added
Our talent development strategy is anchored in three core areas: early career development, professional development, and leadership development. This approach ensures that we build a strong and sustainable pipeline of talent at every career stage. We invest early in future talent through programs designed to attract, engage, and develop individuals at the beginning of their careers.
Removed
Employees are encouraged to dedicate their time and expertise to charitable and civic organizations they are passionate about. In total, employees volunteered more than 18,000 hours in 2024. The Company is also committed to providing financial support for education, affordable housing, and community development lending and investments.
Added
The internship program creates opportunities to engage and recruit university talent, build early connections to the Company, and strengthen the long‑term talent pipeline.
Removed
The Company continually assesses opportunities to attract and retain a diverse population of high performing employees to support the growth of the Company. The Company has built relationships with community and educational institutions to strengthen its pipelines of potential job candidates.
Added
CBDP supports recent college graduates by preparing them for credit and commercial banking roles. iLEAD develops MBA graduates with prior professional experience by providing exposure to the Company while supporting process optimization and adding high‑performing talent to the pipeline of future leaders. The Company emphasizes continuous learning and personalized growth at all career stages.
Removed
The Company maintains an executive-led Opportunity Council, which provides access to leadership, and evaluates organizational practices that build a sense of belonging, enhance the Company's pipeline of talent, engage its people, and create a culture instilled with the Company's corporate values.
Added
Through defined core competencies and structured development planning, individuals build skills through on-the-job experiences, targeted coursework, and formal development programs. The development planning process enables individuals to tailor their learning journey to their unique goals and needs.
Removed
One aspect of this work is the active support of Business Resource Groups, which are employee-led groups to support the diverse aspects and experiences of our people, such as women, veterans, minority groups, cancer survivors and caretakers, LGBTQIA+ employees, employees with disabilities, and encouraging multigenerational connections.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

72 edited+36 added−17 removed165 unchanged
Biggest changeAs a result, our computer systems, software, and networks and those of our customers and third-party vendors are, and are likely to continue to be vulnerable to unauthorized payments and account access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-attacks, and other events that could have an adverse security impact and result in significant losses to us and/or our customers.
Biggest changeThreat actors repeatedly target financial institutions and their service providers, and as a result, our system and those of our customers and vendors remain vulnerable to unauthorized access, fraudulent activity, data exfiltration or destruction, service outages, malware, ransomware, cyber-attacks, and other adverse events that could result in significant losses to us or our customers.
We also could be required to raise additional capital, dispose of certain assets and liabilities, or both, within a prescribed period of time.
We could also be required to raise additional capital, dispose of certain assets and liabilities, or both, within a prescribed period of time.
An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses, and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations. The banking regulatory agencies have expressed concerns about weaknesses in the current CRE market.
An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses, and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations. The banking regulatory agencies have expressed concerns about weaknesses in the CRE market.
Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, or investor or business confidence, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, U.S. government debt default or shutdown, the imposition of tariffs on trade, natural disasters, the emergence of widespread health emergencies or pandemics, terrorist attacks, acts of war (such as the military conflicts in Ukraine and the Middle East), or a combination of these or other factors.
Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, or investor or business confidence, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, U.S. government debt default or shutdown, the imposition of tariffs on trade, natural disasters, the emergence of widespread health emergencies or pandemics, terrorist attacks, geopolitical tensions and acts of war (such as the military conflicts in Ukraine and the Middle East), or a combination of these or other factors.
Intended to protect customers, depositors, and the DIF, these laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, require monitoring and reporting of suspicious activity and of customers who are perceived to present a heightened risk of money laundering or other illegal activity, limit the dividends or distributions that WAB can pay to WAL or that we can pay to our stockholders, restrict the ability of affiliates to guarantee our debt, impose certain specific accounting requirements on us that may be more restrictive 25 Table of Contents and result in greater or earlier charges to earnings or reductions in our capital than prescribed by GAAP, among other things.
Intended to protect customers, depositors, and the DIF, these laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, require monitoring and reporting of suspicious activity and of customers who are perceived to present a heightened risk of money laundering or other illegal activity, limit the dividends or distributions that WAB can pay to WAL or that we can pay to our stockholders, restrict the ability of affiliates to guarantee our debt, impose certain specific accounting requirements on us that may be more restrictive and result in greater or earlier charges to earnings or reductions in our capital than prescribed by GAAP, among other things.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations, and financial condition. 21 Table of Contents We are continuing to pursue digital payments initiatives which are subject to significant uncertainty and could adversely affect our business, reputation, or financial results.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations, and financial condition. 22 Table of Contents We are continuing to pursue digital payments initiatives which are subject to significant uncertainty and could adversely affect our business, reputation, or financial results.
Many of the real and personal properties securing our loans are located in California and more generally in the southwestern portion of the United States. Substantial portions of California experience wildfires from time to time that may cause significant damage throughout the state. For example, early in 2025, Southern California has experienced prolonged wildfires that have resulted in extensive damage.
Many of the real and personal properties securing our loans are located in California and more generally in the southwestern portion of the United States. Substantial portions of California experience wildfires from time to time that may cause significant damage throughout the state. For example, early in 2025, Southern California experienced prolonged wildfires that resulted in extensive damage.
In particular, the transition could: • adversely affect the interest rates received or paid on the value of our assets and liabilities that are based on the discontinued interest rate benchmark compared to the rate received or paid based on the alternative benchmark rates; • adversely affect the interest rates received or paid on the value of other securities or financial arrangements; • result in charges to the financial statements and obligation to "de-designate" certain interest rate swaps used in hedges of certain loans indexed to the discontinued interest rate benchmark; • prompt inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of the discontinued interest rate benchmark with an alternative reference rate; and 16 Table of Contents • result in disputes, litigation or other actions with borrowers or counterparties about the transition to an alternative reference rate.
In particular, the transition could: • adversely affect the interest rates received or paid on the value of our assets and liabilities that are based on the discontinued interest rate benchmark compared to the rate received or paid based on the alternative benchmark rates; • adversely affect the interest rates received or paid on the value of other securities or financial arrangements; • result in charges to the financial statements and obligation to "de-designate" certain interest rate swaps used in hedges of certain loans indexed to the discontinued interest rate benchmark; • prompt inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of the discontinued interest rate benchmark with an alternative reference rate; and • result in disputes, litigation or other actions with borrowers or counterparties about the transition to an alternative reference rate.
If we issue additional preferred stock in the future that has a preference over our common stock, with respect to the payment of dividends or upon liquidation, dissolution, or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock and/or the rights of holders of our common stock, the market price of our common stock could be adversely affected.
If we or any of our subsidiaries issue additional preferred stock in the future that has a preference over our common stock, with respect to the payment of dividends or upon liquidation, dissolution, or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock and/or the rights of holders of our common stock, the market price of our common stock could be adversely affected.
Therefore, if we are unable to compete effectively, including sustaining loan and deposit growth at our historical levels, our business and results of operations may be adversely affected. 20 Table of Contents The financial services industry is also facing increasing competitive pressure from the introduction of disruptive new technologies such as blockchain and digital payments, often by non-traditional competitors and financial technology companies.
Therefore, if we are unable to compete effectively, including sustaining loan and deposit growth at our historical levels, our business and results of operations may be adversely affected. 21 Table of Contents The financial services industry is also facing increasing competitive pressure from the introduction of new technologies such as blockchain and digital payments, often by non-traditional competitors and financial technology companies.
We may from time to time issue debt securities, borrow money through other means, or issue preferred stock. We may also borrow money from the FRB, the FHLB, other financial institutions, and other lenders. At December 31, 2024, we had outstanding subordinated debt, senior secured and unsecured debt, and short-term borrowings.
We may from time to time issue debt securities, borrow money through other means, or issue preferred stock. We may also borrow money from the FRB, the FHLB, other financial institutions, and other lenders. At December 31, 2025, we had outstanding subordinated debt, senior secured and unsecured debt, and short-term borrowings.
Our loan portfolio consists primarily of commercial and industrial, residential mortgage, and CRE loans, which contain material concentrations in certain business lines or product types, such as mortgage warehouse, real estate, corporate finance, as well as in specific business sectors such as technology and innovation.
Our loan portfolio consists primarily of commercial and industrial, residential mortgage, and CRE loans, which contain material concentrations in certain business lines or product types, such as mortgage finance, real estate, corporate finance, as well as in specific business sectors such as gaming and technology and innovation.
Any changes in federal and state law, as well as regulations and governmental policies, income tax laws, and accounting principles, could affect us in substantial and unpredictable ways, including ways that may adversely affect our business, financial condition, or results of operations.
Any such changes, as well as changes in federal and state laws, regulations and governmental policies, income tax laws, and accounting principles, could affect us in substantial and unpredictable ways, including ways that may adversely affect our business, financial condition, or results of operations.
Persistence of such conditions or additional significant natural or man-made disasters in the state of California or in our other markets could lead to damage or injury to our own properties and/or employees, declines in population in our markets, and increased risk that our borrowers may experience losses or sustained job interruption, which may materially impair their ability to maintain deposits or meet the terms of their loan obligations.
Persistence of such conditions or additional significant natural or 18 Table of Contents man-made disasters in the state of California or in our other markets could lead to damage or injury to our own properties and/or employees, declines in population in our markets, and increased risk that our borrowers may experience losses or sustained job interruption, which may materially impair their ability to maintain deposits or meet the terms of their loan obligations.
Failure to appropriately comply with any such laws, regulations or principles or an alleged failure to comply, even if we acted in good faith or the alleged failure reflects a difference in interpretation, could result in sanctions by regulatory agencies, civil money penalties or damage to our reputation, all of which could adversely affect our business, financial condition, or results of operations.
Failure to appropriately comply with any such laws, regulations, policies or principles or an alleged failure to comply, even if we acted in good faith or the alleged failure reflects a difference in interpretation, could result in sanctions by regulatory agencies, civil monetary penalties or damage to our reputation, all of which could adversely affect our business, financial condition, or results of operations.
Additionally, effective November 15, 2024, the Bloomberg Index Services Limited ceased publication of the Bloomberg Short-Term Bank Yield Index. Transitioning away from an interest rate benchmark to alternative reference rates is complex and could have a range of adverse effects on our business, financial condition and results of operations.
For example, effective November 15, 2024, the Bloomberg Index Services Limited ceased publication of the Bloomberg Short-Term Bank Yield Index. Transitioning away from an interest rate benchmark to alternative reference rates is complex and could have a range of adverse effects on our business, financial condition and results of operations.
Finally, our AmeriHome subsidiary needs to maintain certain state licenses and federal and 26 Table of Contents government-sponsored agency approvals required to conduct its business and is subject to periodic examinations by such state and federal agencies, which can result in increases in administrative costs, substantial penalties due to compliance errors, or the loss of licenses.
Finally, our AmeriHome subsidiary needs to maintain certain state licenses and federal and government-sponsored agency approvals required to conduct its business and is subject to periodic examinations by such state and federal agencies, which can result in increases in administrative costs, substantial penalties due to compliance errors, or the loss of licenses.
Any such challenges that are not resolved in our favor may adversely affect our effective tax rate, tax payments or financial condition. 27 Table of Contents Securities-Related Risks The price of our common stock may fluctuate significantly in the future, which could result in losses to our investors and litigation against us.
Any such challenges that are not resolved in our favor may adversely affect our effective tax rate, tax payments or financial condition. Securities-Related Risks The price of our common stock may fluctuate significantly in the future, which could result in losses to our investors and litigation against us.
Additionally, these types of events may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which we interact on a daily basis.
These types of events may also adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which we interact on a daily basis.
Any of these effects could result in greater loan delinquencies, increases in non-performing, criticized, and classified assets, and a decline in demand for our products and services. 17 Table of Contents The markets in which we operate are subject to the risk of both natural and man-made disasters.
Any of these effects could result in greater loan delinquencies, increases in non-performing, criticized, and classified assets, and a decline in demand for our products and services. The markets in which we operate are subject to the risk of both natural and man-made disasters.
If we are unable to maintain and implement improvements to our controls, processes, and reporting systems and procedures, we may lose customers, experience compliance and operational problems or incur additional expenditures beyond current projections, any one of which could adversely affect our financial results.
If we are unable to maintain and implement improvements to our controls, processes, and reporting 25 Table of Contents systems and procedures, we may lose customers, experience compliance and operational problems or incur additional expenditures beyond current projections, any one of which could adversely affect our financial results.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, largely related to increased digitization of banking services and capabilities (including those related to or involving artificial intelligence, machine learning, blockchain, and other technologies) and mobile banking solutions.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, largely related to increased digitization of banking services and capabilities (including those related to or involving AI, machine learning, blockchain, and other technologies) and mobile banking solutions.
As of December 31, 2024, we held $52 million of assets in OREO. The amount that we may realize after a default is dependent upon factors outside of our control, including, but not limited to, general or local economic conditions, interest rates, real estate tax rates, zoning laws, governmental and regulatory rules and natural disasters.
As of December 31, 2025, we held $137 million of assets in OREO. The amount that we may realize after a default is dependent upon factors outside of our control, including, but not limited to, general or local economic conditions, interest rates, real estate tax rates, zoning laws, governmental and regulatory rules and natural disasters.
Recently, federal and state and local taxing authorities have been increasingly aggressive in challenging tax positions taken by financial institutions. The challenges made by taxing authorities may result in adjustments to the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions.
Recently, federal and state and local taxing authorities have been increasingly aggressive in challenging tax positions taken by 28 Table of Contents financial institutions. The challenges made by taxing authorities may result in adjustments to the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, and to assess civil monetary penalties against us and/or officers or directors, and to remove officers and directors.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in 27 Table of Contents our capital, to restrict our growth, and to assess civil monetary penalties against us and/or officers or directors, and to remove officers and directors.
These rates are highly sensitive to many factors beyond our control, including competition, general economic conditions, the slope of the interest rate curve, and monetary and fiscal policies of various governmental and regulatory authorities, including the FRB.
These rates are highly sensitive to 16 Table of Contents many factors beyond our control, including competition, general economic conditions, the slope of the interest rate curve, and monetary and fiscal policies of various governmental and regulatory authorities, including the FRB.
We may not successfully implement such changes or improvements in an efficient or timely manner, or we may discover deficiencies in our existing systems and controls that adversely affect our ability to support and grow our existing businesses and client relationships, and could require us to incur additional expenditures to expand our administrative and 24 Table of Contents operational infrastructure.
We may not successfully implement such changes or improvements in an efficient or timely manner, or we may discover deficiencies in our existing systems and controls that adversely affect our ability to support and grow our existing businesses and client relationships, and could require us to incur additional expenditures to expand our administrative and operational infrastructure.
Our mortgage warehouse lending operations are subject to federal, state and local laws, regulations and judicial and administrative decisions, including those designed to discourage predatory lending and regulate collections and servicing practices with respect to mortgage loans. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose significant additional compliance costs.
Our mortgage banking business channel operations are subject to federal, state and local laws, regulations and judicial and administrative decisions, including those designed to discourage predatory lending and regulate collections and servicing practices with respect to mortgage loans. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose significant additional compliance costs.
In contrast, in rising interest rate environments, loan repayment rates generally decline and result in a lower volume of loan originations. In addition to the impact on our lending business, a decrease in loan originations would adversely affect the volume of loans available for purchase by our mortgage warehouse lending platform.
In contrast, in rising interest rate environments, loan repayment rates generally decline and result in a lower volume of loan originations. In addition to the impact on our lending business, a decrease in loan originations would adversely affect the volume of loans available for purchase by our mortgage banking business channel.
While these wildfires have not significantly damaged our own properties or the properties pledged by borrowers as collateral, it is possible our borrowers may experience losses in the future, which may materially impair their ability to meet the terms of their obligations.
While these wildfires did not significantly damage our own properties or the properties pledged by borrowers as collateral, it is possible our borrowers may experience losses in the future, which may materially impair their ability to meet the terms of their obligations.
In addition, with the exception of residential loans, we individually evaluate all loans identified as problem loans with a total commitment of $1.0 million or more, and establish an allowance based upon our estimation of the potential loss associated with those problem loans. Additions to the ACL recorded through provision for credit losses decrease our net income.
In addition, with the exception of residential loans, we individually evaluate all nonaccrual loans graded Substandard or worse with a total commitment of $1.0 million or more, and establish an allowance based upon our estimation of the potential loss associated with those problem loans. Additions to the ACL recorded through provision for credit losses decrease our net income.
Our future performance depends on a smooth transition of our senior management, including finding and training highly qualified replacements who are properly equipped to lead us. We have adopted retention strategies, including equity awards, from which our senior management team benefits in order to achieve our goals.
Most recently, we completed a CFO transition in January 2026. Our future performance depends on a smooth transition of our senior management, including finding and training highly qualified replacements who are properly equipped to lead us. We have adopted retention strategies, including equity awards, from which our senior management team benefits in order to achieve our goals.
We continually evaluate expansion through acquisitions of banks and other financial assets and businesses.
We continually evaluate expansion opportunities through acquisitions of banks, branches, and other financial assets and businesses.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards on ESG-related issues, or taking action that conflicts with one or another of our stakeholder’s expectations, could negatively impact our reputation, ability to do business with certain customers and business partners, and stock price.
Failure to adapt to or comply with legal or regulatory requirements or investor or stakeholder expectations and standards on ESG-related issues, or taking action that conflicts with one or another of our stakeholder’s expectations, could negatively impact our reputation, ability to do business with certain customers and business partners, and stock price, or could lead to governmental enforcement or private litigation.
Factors that may cause fluctuations in our stock price include: • actual or anticipated changes in the political climate or public policy; • volatility and economic disruption in the banking industry, such as that experienced in 2023, or the economy more broadly; • changes in national and global financial markets and economies and general market conditions, such as interest or foreign exchange rates, inflation, stock, commodity or real estate valuations or volatility and other global, geopolitical, regulatory or judicial events that effect the financial markets and economy including pandemics, terrorism and war, including the military conflicts in Ukraine and the Middle East; • sales of our equity securities; • our financial condition, performance, creditworthiness, and prospects; • quarterly variations in our operating results or the quality of our assets; • operating results that vary from the expectations of management, securities analysts, and investors; • changes in expectations as to our future financial performance; • announcements of strategic developments, acquisitions, and other material events by us or our competitors; • the operating and securities price performance of other companies that investors believe are comparable to us; • the credit, mortgage, and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; • changes in interest rates and the slope of the yield curve; • events affecting the financial services industry generally or financial institutions similar to us or that may be viewed as similar to us; and • our past and future dividend and share repurchase practices.
Factors that may cause fluctuations in our stock price include: • actual or anticipated changes in the political climate or public policy; • volatility and economic disruption in the banking industry or the economy more broadly; • changes in national and global financial markets and economies and general market conditions, such as interest or foreign exchange rates, inflation, stock, commodity or real estate valuations or volatility and other global, geopolitical, regulatory or judicial events that effect the financial markets and economy including international tensions, pandemics, terrorism and war, including the military conflicts in Ukraine and the Middle East; • sales of our equity securities; • our financial condition, performance, creditworthiness, and prospects; • quarterly variations in our operating results or the quality of our assets; • operating results that vary from the expectations of management, securities analysts, and investors; • changes in expectations as to our future financial performance; • announcements of strategic developments, acquisitions, and other material events by us or our competitors; • the operating and securities price performance of other companies that investors believe are comparable to us; • actions of activist stockholders could impact the pursuit of our business strategies, cause us to incur substantial costs, and divert management's and the Board's attention and resources; • the credit, mortgage, and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; • changes in interest rates and the slope of the yield curve; • events affecting the financial services industry generally or financial institutions similar to us or that may be viewed as similar to us; and • our past and future dividend and share repurchase practices.
As of December 31, 2024, we have $5.1 billion of borrowings from the FHLB of San Francisco and no borrowings from the FRB. We utilize borrowings from the FHLB of San Francisco and the FRB to satisfy short-term liquidity needs. Our borrowing capacity is generally dependent on the value of our collateral pledged to these entities.
As of December 31, 2025, we have $4.8 billion of borrowings from the FHLB of San Francisco and no borrowings from the FRB. We utilize borrowings from the FHLB of San Francisco and the FRB to satisfy short-term liquidity needs. Our borrowing capacity is generally dependent on the value of our collateral pledged to these entities.
Our mortgage warehouse lending operations subject us to regulations that have grown in complexity in recent years and may continue to do so as consumer protection measures change.
Our mortgage banking business channel operations subject us to regulations that have grown in complexity in recent years and may continue to do so as consumer protection measures change.
In addition to the risk of more frequent and/or severe natural disasters, climate change can result in longer term shifts in climate patterns such as extreme heat, sea level rise, declining fresh water resources, and more frequent and prolonged drought.
In addition to the risk of more frequent and/or severe natural disasters, climate change can result in longer term shifts in climate patterns such as extreme heat, rising sea levels, declining freshwater resources, and more frequent and prolonged drought.
While current estimates of future credit losses are below the first loss position, no assurances can be given that future losses will not exceed the first loss position and, if credit losses were to exceed the first loss position, our financial condition and results of operations could be adversely effected. We may enter into more such transactions in the future.
While current estimates of future credit losses are below the first loss position, no assurances can be given that future losses will not exceed the first loss position and, if credit losses were to exceed the first loss position, our financial condition and results of operations could be adversely effected.
Increasing political polarization in the United States and its government, including disagreement around conflict-related foreign involvement and aid and other politically charged issues may increase the likelihood of a shutdown of the federal government.
Increasing political polarization in the United States and its government, including disagreement around foreign and domestic policies and other politically charged issues may increase the likelihood of a shutdown of the federal government.
If management’s assumptions and judgments are incorrect or if economic conditions worsen compared to forecast, our actual credit losses may exceed our ACL. At December 31, 2024, our ACL on funded loans and loss contingency on unfunded loan commitments and letters of credit totaled $373.8 million and $39.5 million, respectively.
If management’s assumptions and judgments are incorrect or if economic conditions worsen compared to forecast, our actual credit losses may exceed our ACL. At December 31, 2025, our ACL on funded loans and loss contingency on unfunded loan commitments and letters of credit totaled $460.6 million and $49.6 million, respectively.
Operational and Technological Risks A failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber-attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses.
Operational and Technological Risks A failure in, or breach of, our security or technology systems, or those of our third-party service providers, including as a result of cyber-attacks, could disrupt our operations, result in the unauthorized disclosure or misuse of confidential or proprietary information, damage our reputation, increase our operating costs, and cause financial losses.
We are subject to federal, state and local laws related to consumer privacy and data use and security, including information safeguard rules under the Gramm-Leach-Bliley Act and the California Consumer Protection Act.
Regulations addressing consumer privacy and data use and security could increase our costs and impact our reputation. We are subject to federal, state and local laws related to consumer privacy and data use and security, including information safeguard rules under the Gramm-Leach-Bliley Act and the California Consumer Protection Act.
Approximately 57% of our loan portfolio at December 31, 2024 was secured by real estate.
Approximately 52% of our loan portfolio at December 31, 2025 was secured by real estate.
Our earnings also could be adversely affected in a declining rate environment if the rates on our loans and other investments fall more quickly than those on our deposits and other liabilities.
Our earnings could also be adversely affected in a declining rate environment if the rates on our loans and other investments fall more quickly than those on our deposits and other liabilities. A declining rate environment may also result in a change in the mix of non-interest and interest bearing accounts.
Such activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the persistence and increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud.
Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the persistence and increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud.
We have entered into transactions to mitigate exposure to losses on our loan portfolio. These transactions are structured as credit linked notes, which transfer the risk of first losses on covered loans to these note holders. These notes have an aggregate principal amount of $434.2 million on a $8.6 billion reference pool of residential mortgages.
These transactions are structured as credit linked notes, which transfer the risk of first losses on covered loans to these note holders. These notes have an aggregate principal amount of $407.4 million on an $8.1 billion reference pool of residential mortgages.
Any of these things could adversely affect our business and financial performance. Our business may be adversely affected by fraud. As a financial institution, we are inherently exposed to a wide range of operational risks, including, but not limited to, theft and other fraudulent activity by employees, customers, and other third parties targeting us and/or our customers or data.
As a financial institution, we are inherently exposed to a wide range of operational risks, including, but not limited to, theft and other fraudulent activity by employees, customers, the parties we do business with, contractors, vendors and other third parties targeting us and/or our customers or data.
There also can be no assurance there will not be additional bank failures or liquidity concerns in particular segments of the financial services industry or in the U.S. financial system as a whole.
There also can be no assurance there will not be bank failures or liquidity concerns in particular segments of the financial services industry or in the U.S. financial system as a whole. Such conditions or events could adversely affect our business, results of operations, and financial condition.
Gross unrealized losses on our HTM and AFS investment securities totaled $218 million and $729 million, respectively, as of December 31, 2024. In 2024, the FRB began lowering rates as inflationary pressure started to ease.
Gross unrealized losses on our HTM and AFS investment securities totaled $160 million and $610 million, respectively, as of December 31, 2025. In late 2024, the FRB began lowering rates as inflationary pressure started to ease, and in late 2025, the FRB again lowered rates. However, the economic and inflationary outlook continues to remain uncertain.
Despite such efforts, the manner and impact of the transition and related developments, as well as the effect of such developments on our funding costs, investment and trading securities portfolios, and business, would be uncertain and could have a material adverse impact on our profitability.
Despite such efforts, the manner and impact of the transition and related developments, as well as the effect of such developments on our funding costs, investment and trading securities portfolios, and business, would be uncertain and could have a material adverse impact on our profitability. 17 Table of Contents Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI.
We have previously adopted common stock repurchase programs, pursuant to which we have repurchased shares of our outstanding common stock, the most recent of which expired in December 2020. 28 Table of Contents Our dividend payments and/or stock repurchase practices may change from time-to-time, and no assurance can be provided that we will continue to declare dividends in any particular amounts or at all, or institute a new stock repurchase program.
Our dividend payments and/or stock repurchase practices may change from time-to-time, and no assurance can be provided that we will continue to declare dividends in any particular amounts or at all, or continue to repurchase shares of our outstanding common stock pursuant to our stock repurchase program.
State and federal initiatives on social or climate matters may differ or conflict with one another and may also differ from our shareholders' and stakeholders' expectations. These differing, and sometimes conflicting, views, priorities and expectations on ESG issues increase the risk that any action or lack thereof by us on such matters will be perceived negatively by some stakeholders.
These differing, and sometimes conflicting, views, priorities and expectations on ESG issues increase the risk that any action or lack thereof by us on such matters will be perceived negatively by some stakeholders.
Therefore, any increases or decreases in the fair value of these financial instruments will have a corresponding impact on reported earnings or AOCI. Fair value can be affected by a variety of factors, many of which are beyond our control, including credit spreads, interest rate volatility, liquidity, and other economic factors.
Fair value can be affected by a variety of factors, many of which are beyond our control, including credit spreads, interest rate volatility, liquidity, and other economic factors.
Our BOD is authorized to issue one or more classes or series of preferred stock from time to time without any action on the part of the stockholders.
All of these securities or borrowings have priority over our common stock in a liquidation, which could affect the market price of our stock. Our BOD is authorized to issue one or more classes or series of preferred stock from time to time without any action on the part of the stockholders.
Regulations affecting banks and other financial institutions are under continuous review and frequently change, and the ultimate effect of such changes cannot be predicted. Regulations and laws may be modified at any time, and new legislation may be enacted that will affect us, WAB, and our other subsidiaries.
Regulations affecting banks and other financial institutions are under continuous review and frequently change, and the ultimate effect of such changes cannot be predicted.
Such conditions or events could adversely affect our business, results of operations, and financial condition. 15 Table of Contents Changes in interest rates and increased rate competition could adversely affect our profitability, business, and prospects.
Changes in interest rates and increased rate competition could adversely affect our profitability, business, and prospects.
Although we take numerous protective measures to maintain the confidentiality, integrity, and security of our customers’ information across all geographies and product lines, and endeavor 23 Table of Contents to modify these protective measures as circumstances warrant, the nature of cyber threats continues to evolve.
Although we employ multiple layers of protective controls to maintain the confidentiality, integrity, and security of information across all geographies and business lines, and we 24 Table of Contents continually enhance these, the nature of cyber threats continues to evolve.
Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI. We hold certain financial instruments measured at fair value. For those financial instruments measured at fair value, we are required to recognize changes in fair value in either earnings or AOCI each quarter.
We hold certain financial instruments measured at fair value. For those financial instruments measured at fair value, we are required to recognize changes in fair value in either earnings or AOCI each quarter. Therefore, any increases or decreases in the fair value of these financial instruments will have a corresponding impact on reported earnings or AOCI.
Deterioration in the real estate market or general economic conditions could affect the ability of our loan customers to service their debt, which could result in additional loan loss provisions and increases in our ACL.
Deterioration in general economic conditions could affect the ability of our loan customers to service their debt, which could result in additional loan loss provisions and increases in our ACL. In addition, volatility in the banking industry and related economic effects may adversely impact the Company’s estimate of its ACL and resulting provision for credit losses.
The terms of any such supervisory action and the consequences associated with any failure to comply therewith could have a material negative effect on our business, operating flexibility, and financial condition. Current and proposed regulations addressing consumer privacy and data use and security could increase our costs and impact our reputation.
The terms of any such supervisory action and the consequences associated with any failure to comply therewith could have a material negative effect on our business, operating flexibility, and financial condition. Regulatory compliance requirements and expense likely will increase when we reach $100 billion in assets.
Although our capital ratios are in line with our targets, we may need to issue additional equity capital or reduce the pace at which we are growing in order to increase our CET1 and other capital ratios. 22 Table of Contents If we lose a significant portion of our core deposits, whether through a significant deposit relationship or concentrations in an industry, or our cost of funding deposits increases significantly, our liquidity and/or profitability would be adversely impacted.
If we lose a significant portion of our core deposits, whether through a significant deposit relationship or concentrations in an industry, or our cost of funding deposits increases significantly, our liquidity and/or profitability would be adversely impacted.
Unforeseen adverse events, changes in economic conditions, and changes in regulatory policy affecting borrowers’ industries or markets could have a material adverse impact on our financial condition and results of operations. 19 Table of Contents Our credit linked notes do not ensure full protection against credit losses, and as such we could still incur significant credit losses on loans for which risk of loss has been transferred pursuant to these transactions.
Our credit linked notes do not ensure full protection against credit losses, and as such we could still incur significant credit losses on loans for which risk of loss has been transferred pursuant to these transactions. We have entered into transactions to mitigate exposure to losses on our loan portfolio.
We also have outstanding depositary shares representing Series A preferred stock, which is senior to our common stock. All of these securities or borrowings have priority over our common stock in a liquidation, which could affect the market price of our stock.
We also have outstanding depositary shares representing Series A preferred stock, which is senior to our common stock.
Any adverse publicity regarding ESG matters or shifts in investor priorities may result in adverse effects on our stock price and/or our business, operations and 18 Table of Contents earnings. Additionally, ESG-related costs, including with respect to compliance with any additional or altered regulatory or disclosure requirements or expectations, could adversely impact our results of operations.
Any adverse publicity regarding ESG matters or shifts in investor priorities may result in adverse effects on our stock price and/or our business, operations and earnings.
Use of blockchain-based technologies in payments are a relatively new and unproven technology, and the laws and regulations surrounding them are uncertain and evolving. Blockchain and digital payment technology has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue.
Treasury Department and federal regulators to issue regulations on a number of topics to interpret and implement the statute, so the effect of the GENIUS Act will depend on what those regulations provide. Blockchain and digital payment technology has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue.
These threats may originate externally from increasingly sophisticated third parties, including foreign governments, organized criminal groups, and other hackers, or from outsourced or infrastructure-support providers and application developers, or the threats may originate from within our organization.
These threats may originate from external actors, including foreign governments, organized criminal groups, and other malicious entities, or failure or vulnerabilities within our outsourced or infrastructure-support providers, or internal environments. Additionally, the continued evolution and increased usage of AI technologies may further increase these risks.
Credit Risks We are highly dependent on real estate and events negatively impacting the real estate market will hurt our business and earnings.
Additionally, ESG-related costs, including with respect to compliance with any additional or altered legal or regulatory or disclosure requirements or expectations, could adversely impact our results of operations. 19 Table of Contents Credit Risks We are highly dependent on real estate and events negatively impacting the real estate market will hurt our business and earnings.
The rapid evolution and increased adoption of artificial intelligence technologies has also given rise to additional vulnerabilities and potential entry points for cyber threats. In addition, we may be at risk of an operational failure with respect to our customers’ systems.
We are subject to a wide range of potential operational disruptions, including failure of our technology infrastructure, cyber-attacks, and natural or man-made disasters. The rapid evolution and increased adoption of AI technologies has introduced additional vulnerabilities and potential entry points for cyber threats.
However, we cannot assure that these policies will afford coverage for all possible losses or would be sufficient to cover all financial losses, damages, or penalties, including lost revenues, should we experience any one or more of our or a third party’s systems failing or experiencing an attack.
We maintain insurance policies that we believe provide reasonable coverage for an institution of our size, scope, and technology environment. However, such insurance may not cover all possible losses or may be insufficient to cover financial losses, damages, penalties, or lost revenues, arising from a failure of our systems or those of a third party.
We rely on third parties to provide key components of our business infrastructure. We rely on third parties to provide key components for our business operations, such as data processing and storage, recording and monitoring transactions, online banking interfaces and services, internet connections, and network access.
We rely on third parties to support critical business operations. We rely on third parties to support critical business operations, such as data processing and storage, transaction processing, online banking systems, internet connectivity, and network access. Although we maintain a robust due diligence and monitoring program over third-party service providers, we do not control the actions of these third parties.
At December 31, 2024, our CET1 ratio was 11.3%, which is above the well-capitalized regulatory ratio threshold of 6.5%.
At December 31, 2025, our CET1 ratio was 11.0%, which is above the well-capitalized regulatory ratio threshold of 6.5%. Although our capital ratios are in line with our 23 Table of Contents targets, we may need to issue additional equity capital or reduce the pace at which we are growing in order to increase our CET1 and other capital ratios.
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The bank closures in the first half of 2023 led to such disruption and volatility, including deposit outflows, at many mid-sized banks, including us, increasing the need for liquidity.
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If the FRB were to reverse course and rapidly increase rates, the increase could result in further declines in the fair market values of long duration fixed rate investment securities, constrain our interest rate spread and may adversely affect our business forecasts.
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Although bank regulators ensured depositors would have access to all of their money after only one business day of the first such bank closure, including funds held in uninsured deposit accounts, it is not certain bank regulators will treat future bank failures similarly.
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Climate change could also impact our assets or employees directly or lead to changes in customer preferences that could negatively affect our growth or business strategies. In recent years, bank regulators have focused on the physical and financial risks to financial institutions associated with climate change.
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The FRB has indicated additional decreases to the federal funds target rate in 2025, but noted it will continue to assess additional information and implications for the economic outlook in determining future actions with respect to target rates.
Added
However, expectations with respect to these matters has been changing, and it is difficult to predict changes in priorities and requirements with respect to these matters, including any changes in compliance costs.
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For example, effective January 1, 2022, the administrator of LIBOR ceased the publication of one-week and two-month U.S. dollar LIBOR, and immediately after June 30, 2023, the administrator of LIBOR ceased the publications of the remaining tenors of U.S. dollar LIBOR (one, three, six, and 12-month).
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State and federal initiatives on social or climate matters may differ or conflict with one another and may also differ from our shareholders' and stakeholders' expectations. For example, changing views against certain ESG and corporate DEI matters has gained momentum across the United States at national, state and local levels, which are referred to by some as “anti-ESG” efforts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity operational measures Operationally, the Company’s overall cyber risk strategy is a collaborative process between the CIO and the information technology teams, and the CISO led data protection, information and cyber teams. The CIO oversees the establishment and 30 Table of Contents implementation of the technical plan for cyber risk strategy which the CISO and his team reviews and critiques.
Biggest changeThe Company also evaluates service provider security practices to ensure they maintain appropriate information security safeguards. 31 Table of Contents Cybersecurity operational measures Operational execution of the Company’s cyber risk strategy is a collaborative effort between the CIO-led information technology organization, and the CISO-led data protection, information security and cybersecurity teams.
Through the collection and integration of security-related IT infrastructure information, external threat intelligence and the expertise of trained SMC analysts, the Company works to identify and address potential indicators of compromise. Potential security events are identified and addressed through defined IT incident response activities, the SMC’s oversight through SIEM, and with support of the Company’s CSR Plan.
Through the collection and integration of security-related IT infrastructure information, external threat intelligence and the expertise of trained SMC analysts, the Company works to identify and address potential indicators of compromise. Potential security events are identified and addressed through defined IT incident response activities, the SMC’s oversight through the SIEM platform and the Company’s CSR plan.
The Company’s information security controls and programs are designed to align with the NIST for cybersecurity, the FFIEC examination guidelines, Control Objectives for Information and Related Technologies and the Information Technology Infrastructure Library frameworks, along with applicable privacy laws. Information Security is the responsibility of the officers, employees and agents of the Company with oversight by the BOD.
The Company’s information security controls and programs are designed to align with the NIST Cybersecurity Framework, FFIEC guidelines, Control Objectives for Information and Related Technologies and the Information Technology Infrastructure Library frameworks, along with applicable privacy laws. Information security is the responsibility of all officers, employees and agents of the Company with oversight by the BOD.
While the CIO and information technology organizations collaborate with the CISO organization as described herein, to create independence between the CISO and CIO functions, the CISO reports to the Company’s Chief Administration Officer and the CIO reports to the Company’s Chief Banking Officer for National Business Lines.
While the CIO and information technology organizations collaborate with the CISO organization as described herein, to create independence between the CISO and CIO functions, the CISO reports to the Company’s Chief Administration Officer and the CIO reports to the Company’s Chief Banking Officer for NBL.
To validate the effectiveness of the Company’s overall information security controls, external third parties also perform full-scope external and internal penetration testing designed to mimic the tactics used by individual hackers or criminal hacking organizations. The Company also engages external third parties to perform ongoing adversarial simulation.
To validate the effectiveness of the Company’s overall information security controls, the Second Line Enterprise and Operational Risk Management team hires external third parties to perform external and internal penetration testing designed to mimic the tactics used by individual hackers or criminal hacking organizations. The Company also engages external third parties to perform ongoing adversarial simulation.
The Company maintains a data protection and information security program designed to ensure adequate governance and oversight is in place while evolving to meet changes in applicable laws and regulations, and best practices.
The Audit Committee of the BOD oversees the audit control functions of which cybersecurity practices may be a part. The Company maintains a data protection and information security program designed to ensure adequate governance and oversight is in place while evolving to meet changes in applicable laws and regulations, and best practices.
Cybersecurity assessment The Company engages external third parties to perform assessments on our adherence to the FFIEC’s recommendations on cyber preparedness and NIST Cybersecurity Framework, as well as to review for best practices for the use of cloud services, Swift and FedLine requirements.
Cybersecurity assessment The Company engages external third parties to perform assessments of our compliance with FFIEC’s cyber preparedness guidelines, the NIST Cybersecurity Framework, and Cyber Risk Institute standards and also advise on best practices for the use of cloud services, such as SWIFT and FedLine.
The Company conducts regular internal cybersecurity assessments intended to measure inherent risk and drive the adjustment of our security posture according to the latest threats. These assessments include alignment with the FFIEC’s recommendations on cyber preparedness, GLBA Safeguards Rule to protect user data, and Swift security control requirements.
The Company conducts regular internal cybersecurity assessments intended to measure inherent risk and guide adjustment of our security posture in response to the evolving threat environment. These include reviews against FFIEC’s recommendations on cyber preparedness, GLBA Safeguards Rule, and SWIFT security control requirements.
Item 1C. Cybersecurity. Cybersecurity risk management and strategy Cybersecurity and risks associated with information security are operational risks included in the Company’s ERM Framework. Cybersecurity risks may also include fraud, harm to employees or customers, violation of privacy or security laws and other legal risks, and reputational risk.
Item 1C. Cybersecurity. Cybersecurity risk management and strategy Cybersecurity and risks associated with information security represent key operational risks within the Company’s ERM Framework. These risks encompass potential fraud, harm to employees or customers, violations of privacy or information security laws, legal, regulatory compliance and reputational risk.
Each Company employee is responsible for an effective cybersecurity defense which is enforced with mandatory interactive cyber awareness training, periodic newsletters, executive security briefs and updates. Additionally, the BOD’s Risk Committee is informed about cybersecurity and the relevant risks posed to the Company via regular updates from the Company’s CISO and CIO.
Each Company employee is responsible for an effective cybersecurity defense which is enforced with mandatory interactive cyber awareness training, periodic newsletters, executive security briefs and updates.
These risks are all considered in the Company’s ERM Framework as part of the Company’s overall risk assessment process. Under the ERM Framework, the Company’s Information Security Risk and Compliance departments and all employees are the First Line. Those in the First Line are each responsible for identifying and managing the information security risk associated with their activities.
Each of these risk dimensions is evaluated as part of the Company’s risk assessment process. Under the ERM Framework, the Company’s Information Security Risk and Compliance departments and all employees are the First Line and are responsible for identifying and measuring these risks so that controls proportionate to the risk involved can be designed and implemented.
The Company performs continuous internal and external vulnerability scanning to measure and react to new vulnerabilities and seeks conformance to Center for Internet Security benchmarks for both cloud-based and on-premises technology. The Company reviews vendor and partner security practices to ensure they maintain proper information security safeguards.
The Company performs continuous internal and external vulnerability scanning to identify and remediate emerging vulnerabilities and strives to maintain conformance with Center for Internet Security benchmarks across cloud-based and on-premises technology.
After they have established a joint cyber risk plan, the Company’s second line of defense reviews and challenges the plan. Thereafter, the CISO and CIO teams cooperate with subject-matter experts throughout the business to identify, monitor and mitigate material risks, as well as to monitor compliance with the Company’s security polices, applicable laws and regulations.
Thereafter, the CISO and CIO teams collaborate with subject-matter experts throughout the business to identify, monitor and mitigate material risks, as well as to monitor compliance with the Company’s security polices, and applicable laws and regulations. The Company’s SMC, which is part of the CISO organization, manages security through multiple external threat feeds and systems logs.
The Risk Committee of the BOD and ERM Committee are primarily responsible for monitoring management’s implementation of operations and technology risk controls, including those relating to cybersecurity and information security. The Audit Committee of the BOD oversees the audit control functions of which cybersecurity practices may be a part.
The Company manages the risk associated with cybersecurity and information security in alignment with risk tolerances set forth in the Company’s Board-approved Risk Appetite Statement. Oversight of cybersecurity resides with the BOD, through its Risk committee, which is primarily responsible for monitoring management’s implementation of operations and technology risk controls, including those relating to cybersecurity and information security.
The CSR Plan is in place and updated regularly with the intent to reduce impacts to clients and the Company caused by a declared cyber incident, such as an event involving malicious code, unauthorized disclosure, loss of information or unauthorized use of information or systems.
The CSR plan is updated regularly and is designed to minimize impacts to clients and the Company arising from cyber incidents involving malicious code, unauthorized access or disclosure, data loss or misuse of systems or information. The CSR plan establishes procedures to detect, respond to, resolve and recover from cybersecurity incidents.
The BOD is regularly informed and actively oversees the data security and privacy program and its policies. The BOD also receives regular education on innovative technology, cybersecurity, information systems/data management, fintech and privacy, from internal and external experts.
The BOD’s Risk Committee receives regular updates from the CISO and CIO on cybersecurity matters, and the BOD receives ongoing education from internal and external experts on emerging technologies, cybersecurity, data management, privacy, and fintech developments.
The CSR Plan organizes resources to detect, manage, respond to, resolve and recover from events that harm or threaten the security of information assets. The CSR plan includes involvement of the Company’s Executive Leadership Team and BOD based on the severity of a cyber event, including the analysis of reporting requirements.
Depending on the severity of a cyber event, the CSR plan may involve the Company’s Executive Leadership Team and the BOD, including the analysis of reporting requirements. The CSR plan is tested annually and includes technical simulations and enterprise-level executive management tabletop exercises.
Our investment in people is critical to maintaining an effective cyber defense, which begins by developing and maintaining a robust Information Security function within the First Line. Collectively, the Company’s senior leadership in this area have over 75 years of experience.
The Company continues to invest in developing and maintaining a robust information security function within the First Line. The Company’s CISO has 25 years of banking information security experience across a number of cybersecurity domains, including cloud security, networking, cyber defense, and data security.
The Company’s Enterprise & Operational Risk Management Department is part of the independent risk oversight of information security risk along with the Company’s ORMC and ERM Committee, both of which are management risk oversight committees. The Company manages the risk associated with cybersecurity and information security in accordance with our Risk Appetite Statement, as approved by the BOD.
Independent oversight of information security risk is provided by Enterprise & Operational Risk Management, which is a function within the Company’s Second Line. The Company’s risk governance oversight includes management committees (Technology & Third Party Risk Committee, Operational Risk Management Committee and ERM Committee).
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The Company’s CISO has over 25 years of network architecture, information technology and cybersecurity experience, maintains Certified Information Systems Security Professional credentials and has served on the Federal Reserve Secure Payments Task Force.
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These controls are then monitored to ensure they are working as intended, including periodic testing of the controls. The results of monitoring and testing activities are then reported through the Company’s risk governance process to ensure issues are resolved on a timely basis.
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The Company’s CIO has over 30 years of technology executive leadership, technology experience focused on strategy, design, development, implementation and support of application systems, and overseeing transformative technology changes, including digital transformations and fraud and BSA/AML capabilities.
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The Company has a highly experienced CIO with a 35-year track record of defining and delivering strategic solutions to deliver value in top tier financial services organizations.
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As an ongoing operation, the Company’s SMC, which is part of the CISO organization, manages the security of our systems through the ingestion of multiple external threat feeds and systems logs.
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The CIO establishes and implements the technical plan for cyber risk strategy which the CISO and his team review. After they have established a joint cyber risk plan, the Company’s Second Line reviews and challenges the plan.
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The CSR plan is tested annually and includes technical and executive management in simulated crisis management cybersecurity tabletop exercises. Cyber threat actors and cybersecurity incidents are a reality and the Company and our third parties face cybersecurity threats in the normal course of business.
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Cyber threats are an ongoing reality and the Company and its third-party service providers encounter such threats in the normal course of business. As the threat environment continues to evolve, future cybersecurity incidents, whether affecting the Company or third party service providers, could have a material adverse effect on the Company's systems, operations, business strategy, financial condition, or operations.
Removed
As of the date of this report, we are aware of the incident described in Item 9B “Other Information” of this report and, as of the date of this report, we have not experienced material losses or consequences relating to material cybersecurity incidents experienced by us or our third parties.
Added
As of the date of this report, other than the risks discussed in “Risk Factors” to this report, the Company knows of no risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Removed
However, we expect businesses will continue to experience cybersecurity risks that could result in adverse impacts with increased frequency and severity due to the evolving threat environment, and there can be no assurance that future cybersecurity incidents, including incidents experienced by third parties, will not have a material adverse impact on the Company, including its business strategy, results of operations and/or financial condition.
Removed
Future cybersecurity threats and incidents could have a material impact on our service, systems or business and are discussed in “Risk Factors” to this report.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, WAB owns and occupies a 36,000 square foot operations facility in Las Vegas, Nevada. See "Item 1. Business” in this Form 10-K for location cities. For information regarding rental payments, see "Note 8. Leases" in Item 8 included in this Form 10-K.
Biggest changeThe Company also owns an administrative office building and has several loan production and other offices across the United States. In addition, WAB owns and occupies a 36,000 square foot operations facility in Las Vegas, Nevada. See "Item 1. Business” in this Form 10-K for location cities. For information regarding rental payments, see "Note 8.
Item 2. Properties. The Company and WAB are headquartered at One E. Washington Street in Phoenix, Arizona. WAB operates 37 domestic branch locations, which include five executive and administrative offices, of which 19 of these locations are owned and 18 are leased. The Company also has several loan production and other offices across the United States.
Item 2. Properties. The Company and WAB are headquartered at One E. Washington Street in Phoenix, Arizona. WAB operates 38 domestic branch locations, which include six executive and administrative offices, of which 20 of these locations are owned and 18 are leased.
Added
Leases" in Item 8 included in this Form 10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFrom time to time, the Company is involved in a variety of litigation matters in the ordinary course of its business and anticipates that it will become involved in new litigation matters in the future. Item 4. Mine Safety Disclosures. Not applicable. 31 Table of Contents PART II
Biggest changeManagement evaluated the existing collateral based on “as is” appraisals and believes it covers the obligation. Updated collateral appraisals are expected in March 2026. From time to time, the Company is involved in a variety of litigation matters in the ordinary course of its business and anticipates that it will become involved in new litigation matters in the future.
Removed
Item 3. Legal Proceedings. There are no material pending legal proceedings to which the Company is a party to or to which any of its properties are subject. There are no material proceedings known to the Company to be contemplated by any governmental authority.
Added
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.
Added
Item 4. Mine Safety Disclosures. Not applicable. 32 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare Repurchases The following table provides information about the Company's purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act for the periods indicated: Period Total Number of Shares Purchased (1)(2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet to be Purchased Under the Plans or Programs October 1-31, 2024 105 $ 61.25 — $ — November 1-30, 2024 169 83.31 — — December 1-31, 2024 184 93.16 — — Total 458 $ 82.21 — $ — (1) Shares purchased during the period were transferred to the Company from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock awards during the period.
Biggest changeShare Repurchases The following table provides information about the Company's purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act for the periods indicated: Period Total Number of Shares Purchased (1)(2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet to be Purchased Under the Plans or Programs October 1-31, 2025 261,284 $ 78.75 261,245 $ 268,844,045 November 1-30, 2025 325,298 78.56 325,000 243,310,795 December 1-31, 2025 137,841 83.41 137,123 231,872,571 Total 724,423 $ 79.55 723,368 $ 231,872,571 (1) A total of 1,055 shares purchased during the period outside of the Company's common stock repurchase program were transferred to the Company from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock awards during the period.
The Company has filed, without qualifications, its 2024 Domestic Company Section 303A CEO Certification regarding its compliance with the NYSE’s corporate governance listing standards. Holders At February 18, 2025, there were approximately 2,246 stockholders of record of our common stock. This number does not include stockholders who hold shares in the name of brokerage firms or other financial institutions.
The Company has filed, without qualifications, its 2025 Domestic Company Section 303A CEO Certification regarding its compliance with the NYSE’s corporate governance listing standards. Holders At February 18, 2026, there were approximately 2,522 stockholders of record of our common stock. This number does not include stockholders who hold shares in the name of brokerage firms or other financial institutions.
The Company is not provided the exact number of or identities of these stockholders. There are no other classes of common equity outstanding. Dividends During the fourth quarter of 2024, the Company's BOD approved a cash dividend of $0.38 per common share. The dividend payment to stockholders totaled $41.8 million and was paid on November 29, 2024.
The Company is not provided the exact number of or identities of these stockholders. There are no other classes of common equity outstanding. Dividends During the fourth quarter of 2025, the Company's BOD approved a cash dividend of $0.42 per common share. The dividend payment to stockholders totaled $46.1 million and was paid on November 28, 2025.
(2) The Company does not currently have a common stock repurchase program. 32 Table of Contents Performance Graph The following graph summarizes a five year comparison of the cumulative total returns for the Company’s common stock, the Standard & Poor’s 500 stock index and the KBW Regional Banking Total Return Index, each of which assumes an initial value of $100.00 on December 31, 2019 and reinvestment of dividends.
The Company may, in the sole discretion of the BOD, terminate the repurchase program at any time while it is in effect. 33 Table of Contents Performance Graph The following graph summarizes a five year comparison of the cumulative total returns for the Company’s common stock, the Standard & Poor’s 500 stock index and the KBW Regional Banking Total Return Index, each of which assumes an initial value of $100.00 on December 31, 2020 and reinvestment of dividends.
In addition, the Company paid a cash dividend of $0.27 per depositary share to preferred stockholders on December 17, 2024, totaling $3.2 million.
In addition, on December 30, 2025, the Company paid cash dividends of $0.27 per depositary share, or $3.2 million, to preferred stockholders, and $7.1 million to preferred stockholders of BW.
Added
(2) On September 12, 2025, the Company announced it had adopted a common stock repurchase program, pursuant to which the Company is authorized to repurchase up to $300 million of its shares of common stock. There is no expiration date for the share repurchase program.
Added
Pursuant to the stock repurchase program, shares may be purchased through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. Any open market repurchases will be conducted in accordance with the limitations set forth in Rule 10b-18.
Added
The timing and price of repurchases as well as the actual number of shares repurchased under the program will be at the discretion of the Company and will depend on a variety of factors, including general market conditions, the stock price, regulatory requirements and limitations, corporate liquidity requirements and priorities, and other factors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInterest income that would have been recorded under the original terms of nonaccrual loans was $24.5 million, $12.3 million, and $4.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. 51 Table of Contents The composition of nonaccrual loans HFI by loan portfolio segment were as follows: December 31, 2024 Nonaccrual Balance Percent of Nonaccrual Balance Percent of Total Loans HFI (dollars in millions) Municipal & nonprofit $ 5 1.0 % 0.01 % Tech & innovation 60 12.6 0.11 Equity fund resources 1 0.2 0.00 Other commercial and industrial 17 3.6 0.03 CRE - owner occupied 5 1.0 0.01 Other CRE - non-owner occupied 243 51.1 0.45 Residential 88 18.5 0.17 Construction and land development 56 11.8 0.11 Other 1 0.2 0.00 Total non-accrual loans $ 476 100.0 % 0.89 % December 31, 2023 Nonaccrual Balance Percent of Nonaccrual Balance Percent of Total Loans HFI (dollars in millions) Municipal & nonprofit $ 6 2.2 % 0.01 % Tech & innovation 33 12.1 0.06 Other commercial and industrial 53 19.4 0.11 CRE - owner occupied 9 3.3 0.02 Other CRE - non-owner occupied 83 30.4 0.16 Residential 70 25.6 0.14 Construction and land development 19 7.0 0.04 Total non-accrual loans $ 273 100.0 % 0.54 % Restructurings for Borrowers Experiencing Financial Difficulty The following tables present the amortized cost of loans HFI that were modified during the period by loan portfolio segment: Amortized Cost Basis at December 31, 2024 Payment Delay and Term Extension Term Extension Interest Rate Reduction Payment Delay Total % of Total Class of Financing Receivable Year Ended (dollars in millions) Tech & innovation $ — $ 5 $ 1 $ 41 $ 47 1.4 % Other commercial and industrial — 7 — 86 93 1.0 Other CRE - non-owner occupied — 46 — 111 157 2.5 Total $ — $ 58 $ 1 $ 238 $ 297 0.6 % Amortized Cost Basis at December 31, 2023 Payment Delay and Term Extension Term Extension Interest Rate Reduction Payment Delay Total % of Total Class of Financing Receivable Year Ended (dollars in millions) Tech & innovation $ 1 $ 6 $ — $ 8 $ 15 0.5 % Other commercial and industrial — 23 — 8 31 0.4 CRE - owner occupied — 3 — — 3 0.2 Hotel franchise finance — 37 — — 37 1.0 Other CRE - non-owner occupied — 119 — — 119 2.0 Residential — — — 1 1 0.0 Total $ 1 $ 188 $ — $ 17 $ 206 0.4 % 52 Table of Contents The performance of these modified loans is monitored for 12 months following the modification.
Biggest changeThe composition of nonaccrual loans HFI by loan portfolio segment were as follows: December 31, 2025 Nonaccrual Balance Percent of Nonaccrual Balance Percent of Total Loans HFI (dollars in millions) Municipal & nonprofit $ 4 0.8 % 0.01 % Tech & innovation 20 4.0 0.03 Equity fund resources 1 0.2 0.00 Other commercial and industrial 120 24.0 0.20 CRE - owner occupied 3 0.6 0.01 Other CRE - non-owner occupied 228 45.6 0.38 Residential 12 2.4 0.02 Construction and land development 109 21.8 0.19 Other 3 0.6 0.01 Total nonaccrual loans $ 500 100.0 % 0.85 % December 31, 2024 Nonaccrual Balance Percent of Nonaccrual Balance Percent of Total Loans HFI (dollars in millions) Municipal & nonprofit $ 5 1.0 % 0.01 % Tech & innovation 60 12.6 0.11 Equity fund resources 1 0.2 0.00 Other commercial and industrial 17 3.6 0.03 CRE - owner occupied 5 1.0 0.01 Other CRE - non-owner occupied 243 51.1 0.45 Residential 88 18.5 0.17 Construction and land development 56 11.8 0.11 Other 1 0.2 0.00 Total nonaccrual loans $ 476 100.0 % 0.89 % 53 Table of Contents Restructurings for Borrowers Experiencing Financial Difficulty The following tables present the amortized cost basis of loans HFI that were modified during the period by loan portfolio segment: Amortized Cost Basis at December 31, 2025 Payment Delay and Term Extension Payment Delay and Interest Rate Reduction Term Extension Interest Rate Reduction Payment Delay Total % of Total Class of Financing Receivable Year Ended (dollars in millions) Tech & innovation $ — $ — $ — $ — $ 18 $ 18 0.4 % Other commercial and industrial — — 2 — 60 62 0.4 Hotel franchise finance — 40 — — 40 1.0 Other CRE - non-owner occupied — — — — 51 51 0.8 Construction and land development — — — — 32 32 0.8 Total $ — $ 40 $ 2 $ — $ 161 $ 203 0.3 % Amortized Cost Basis at December 31, 2024 Payment Delay and Term Extension Payment Delay and Interest Rate Reduction Term Extension Interest Rate Reduction Payment Delay Total % of Total Class of Financing Receivable Year Ended (dollars in millions) Tech & innovation $ — $ — $ 5 $ 1 $ 41 $ 47 1.4 % Other commercial and industrial — — 7 — 86 93 1.0 Other CRE - non-owner occupied — — 46 — 111 157 2.5 Total $ — $ — $ 58 $ 1 $ 238 $ 297 0.6 % Amortized Cost Basis at December 31, 2023 Payment Delay and Term Extension Payment Delay and Interest Rate Reduction Term Extension Interest Rate Reduction Payment Delay Total % of Total Class of Financing Receivable Year Ended (dollars in millions) Tech & innovation $ 1 $ — $ 6 $ — $ 8 $ 15 0.5 % Other commercial and industrial — — 23 — 8 31 0.4 CRE - owner occupied — — 3 — — 3 0.2 Hotel franchise finance — — 37 — — 37 1.0 Other CRE - non-owner occupied — — 119 — — 119 2.0 Residential — — — — 1 1 0.0 Total $ 1 $ — $ 188 $ — $ 17 $ 206 0.4 % The performance of these modified loans is monitored for 12 months following the modification.
WAB is subject to the supervision of, and to regular examination by, the Arizona Department of Financial Institutions, the FRB as its primary federal regulator, and the FDIC as its deposit insurer. WAB's deposits are insured by the FDIC up to the applicable deposit insurance limits in accordance with FDIC laws and regulations.
WAB is subject to the supervision of, and to regular examination by, the Arizona Department of Insurance and Financial Institutions, the FRB as its primary federal regulator, and the FDIC as its deposit insurer. WAB's deposits are insured by the FDIC up to the applicable deposit insurance limits in accordance with FDIC laws and regulations.
Holding company expenses and obligations with respect to its outstanding preferred stock, trust preferred securities and subordinated debt also may limit or impair the Company’s ability to declare and pay dividends.
Holding company expenses and obligations with respect to its outstanding preferred stock, trust preferred securities and subordinated debt may also limit or impair the Company’s ability to declare and pay dividends.
Further, AmeriHome must comply with a large number of federal consumer protection laws and regulations including, among others: • the Real Estate Settlement Procedures Act and Regulation X, which require lenders, mortgage brokers, or servicers to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the settlement process and prohibit specific practices related thereto; • the Truth in Lending Act and Regulation Z, which require disclosures and timely information on the nature and costs of the residential mortgages and the real estate settlement process; 62 Table of Contents • the Secure and Fair Enforcement for Mortgage Licensing Act, which applies to businesses and individuals engaging in the residential mortgage loan business; • the Dodd-Frank Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, and the rules and regulations of the FTC and CFPB that prohibit unfair, abusive or deceptive acts or practices; • the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act) and Regulation V, which address the accuracy, fairness, and privacy of information in the files of consumer reporting agencies; and • the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Homeowners Protection Act, and the Home Mortgage Disclosure Act and Regulation C, which generally disallow discrimination on a prohibited basis, provide applicants and borrowers rights with respect to credit decisioning and the residential mortgage process, and require disclosures and impose obligations on financial businesses conducting residential lending and mortgage servicing.
Further, AmeriHome must comply with a large number of federal consumer protection laws and regulations including, among others: • the Real Estate Settlement Procedures Act and Regulation X, which require lenders, mortgage brokers, or servicers to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the settlement process and prohibit specific practices related thereto; • the Truth in Lending Act and Regulation Z, which require disclosures and timely information on the nature and costs of the residential mortgages and the real estate settlement process; • the Secure and Fair Enforcement for Mortgage Licensing Act, which applies to businesses and individuals engaging in the residential mortgage loan business; • the Dodd-Frank Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, and the rules and regulations of the FTC and CFPB that prohibit unfair, abusive or deceptive acts or practices; 65 Table of Contents • the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act) and Regulation V, which address the accuracy, fairness, and privacy of information in the files of consumer reporting agencies; and • the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Homeowners Protection Act, and the Home Mortgage Disclosure Act and Regulation C, which generally disallow discrimination on a prohibited basis, provide applicants and borrowers rights with respect to credit decisioning and the residential mortgage process, and require disclosures and impose obligations on financial businesses conducting residential lending and mortgage servicing.
In addition, the Company has repurchase facilities, collateralized by securities or loans sold under agreements to repurchase, which are reflected at the amount of cash received in connection with the transaction, and may require additional collateral based on the fair value of the underlying assets.
In addition, the Company has repurchase facilities, collateralized by securities or loans sold under agreements to repurchase, including assets sold under agreements to repurchase, which are reflected at the amount of cash received in connection with the transaction, and may require additional collateral based on the fair value of the underlying assets.
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 and net charge-offs as a percentage of average loans.
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.
Based on the analyses performed, the Company determined the fair value of the Company and its reporting units exceeded their respective carrying values and therefore, no goodwill impairment was recorded during the years ended December 31, 2024 and 2023.
Based on the analyses performed, the Company determined the fair value of the Company and its reporting units exceeded their respective carrying values and therefore, no goodwill impairment was recorded during the years ended December 31, 2025, 2024, and 2023.
In the Company's analysis of Parent liquidity, it is assumed 60 Table of Contents the Parent is unable to generate funds from additional debt or equity issuances, receives no dividend income from subsidiaries and does not pay dividends to stockholders, while continuing to make non-discretionary payments needed to maintain operations and repayment of contractual principal and interest payments owed by the Parent and affiliated companies.
In the Company's analysis of Parent liquidity, it is assumed 63 Table of Contents the Parent is unable to generate funds from additional debt or equity issuances, receives no dividend income from subsidiaries and does not pay dividends to stockholders, while continuing to make non-discretionary payments needed to maintain operations and repayment of contractual principal and interest payments owed by the Parent and affiliated companies.
The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates used to manage the underlying business. 58 Table of Contents Liquidity Liquidity is the ongoing ability to accommodate liability maturities and deposit withdrawals, fund asset growth and business operations, and meet contractual obligations through unconstrained access to funding at reasonable market rates.
The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates used to manage the underlying business. 61 Table of Contents Liquidity Liquidity is the ongoing ability to accommodate liability maturities and deposit withdrawals, fund asset growth and business operations, and meet contractual obligations through unconstrained access to funding at reasonable market rates.
Of the non-owner occupied office loan balance as of December 31, 2024, $1.1 billion is scheduled to mature in 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.
Of the non-owner occupied office loan balance as of December 31, 2025, $1.1 billion is scheduled to mature in 2026. 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.
Federal Home Loan Bank of San Francisco WAB is a member of the FHLB of San Francisco, which is one of 12 regional FHLBs that provide funding to their members to support residential lending, as well as affordable housing and community development loans. Each FHLB serves as a reserve, or central bank, for the members within its assigned region.
Federal Home Loan Bank of San Francisco WAB is a member of the FHLB of San Francisco, which is one of 11 regional FHLBs that provide funding to their members to support residential lending, as well as affordable housing and community development loans. Each FHLB serves as a reserve, or central bank, for the members within its assigned region.
For a comparison of the 2023 results to the 2022 results and other 2022 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, 2023.
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.
To calculate the capital conservation buffer, each minimum capital ratio is subtracted from the corresponding current quarter capital ratio and the lowest of these three measures represents the capital conservation buffer. As of December 31, 2024, the Company’s capital ratios exceeded the 2.5% minimum capital conservation buffer and therefore the Company is not subject to any limitations.
To calculate the capital conservation buffer, each minimum capital ratio is subtracted from the corresponding current quarter capital ratio and the lowest of these three measures represents the capital conservation buffer. As of December 31, 2025, the Company’s capital ratios exceeded the 2.5% minimum capital conservation buffer and therefore the Company is not subject to any limitations.
At December 31, 2024, the Company's long-term liquidity needs primarily relate to funds required to support loan originations, commitments, and deposit withdrawals, which can be met by cash flows from investment payments and maturities, and investment sales, if necessary.
At December 31, 2025, the Company's long-term liquidity needs primarily relate to funds required to support loan originations, commitments, and deposit withdrawals, which can be met by cash flows from investment payments and maturities, and investment sales, if necessary.
In June 2020, the Federal Reserve and other regulatory agencies issued a final rule modifying the Volcker Rule’s prohibition on banking entities investing in or sponsoring covered funds by: (1) streamlining the covered funds portion of the rule; (2) addressing the extraterritorial treatment of certain foreign funds; and (3) permitting banking entities to offer financial services and engage in other activities that do not raise concerns the Volcker Rule was intended to address.
In June 2020, the FRB and other regulatory agencies issued a final rule modifying the Volcker Rule’s prohibition on banking entities investing in or sponsoring covered funds by: (1) streamlining the covered funds portion of the rule; (2) addressing the extraterritorial treatment of certain foreign funds; and (3) permitting banking entities to offer financial services and engage in other activities that do not raise concerns the Volcker Rule was intended to address.
The CFPB as well as the FTC have rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, and their rulemaking and regulatory agendas relating to the residential mortgage industry continues to evolve.
The CFPB as well as the FTC have rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, and their rulemaking and regulatory agendas relating to the residential mortgage industry continue to evolve.
The federal banking agencies expect financial institutions to establish lines of defense and ensure that their risk management processes also address the risk posed by compromised customer credentials, and also expect financial institutions to maintain sufficient business continuity planning processes to ensure rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack.
The federal banking agencies expect financial institutions to establish lines of defense and ensure that their risk management processes also address the risk posed by 71 Table of Contents compromised customer credentials, and also expect financial institutions to maintain sufficient business continuity planning processes to ensure rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack.
Bankruptcy Code provides that, in the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal banking agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. 65 Table of Contents Capital Adequacy The Capital Rules established a comprehensive capital framework for U.S. banking organizations.
Bankruptcy Code provides that, in the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal banking agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. Capital Adequacy The Capital Rules established a comprehensive capital framework for U.S. banking organizations.
In April 2020, the Federal Reserve adopted a final rule codifying the presumptions used in determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the BHCA, and providing greater transparency on the types of relationships the Federal Reserve generally views as supporting a determination of control.
In April 2020, the FRB adopted a final rule codifying the presumptions used in determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the BHCA, and providing greater transparency on the types of relationships the FRB generally views as supporting a determination of control.
A change in statutes, regulations, or regulatory policies applicable to WAL or any of its subsidiaries could have a material effect on the business of the Company. 71 Table of Contents
A change in statutes, regulations, or regulatory policies applicable to WAL or any of its subsidiaries could have a material effect on the business of the Company. 73 Table of Contents
In July 2024, the FRB, FDIC, OCC and National Credit Union Administration proposed updates to their requirements for supervised institutions to establish, implement and maintain effective, risk-based and reasonably designed anti-money laundering and countering the financing of terrorism programs.
In July 2024, the FRB, FDIC, OCC and 72 Table of Contents National Credit Union Administration proposed updates to their requirements for supervised institutions to establish, implement and maintain effective, risk-based and reasonably designed anti-money laundering and countering the financing of terrorism programs.
Total U.S. time deposits in excess of the FDIC insurance limit were $1.2 billion and $1.0 billion at December 31, 2024 and 2023, respectively. Uninsured deposit information is estimated using the same methodologies utilized for regulatory reporting, where applicable. Specific to uninsured time deposits, the Company made certain assumptions to estimate uninsured amounts by maturity.
Total U.S. time deposits in excess of the FDIC insurance limit were $1.8 billion and $1.2 billion at December 31, 2025 and 2024, respectively. Uninsured deposit information is estimated using the same methodologies utilized for regulatory reporting, where applicable. Specific to uninsured time deposits, the Company made certain assumptions to estimate uninsured amounts by maturity.
As of December 31, 2024 and 2023, the Company and the Bank exceeded the capital levels necessary to be classified as well-capitalized, as defined by the various banking agencies.
As of December 31, 2025 and 2024, the Company and the Bank exceeded the capital levels necessary to be classified as well-capitalized, as defined by the various banking agencies.
Under the Change in Bank Control Act, any person, including a company, may not acquire, directly or indirectly, control of a bank without providing 60 days’ prior notice and receiving a non-objection from the appropriate federal banking agency.
Under the Change in Bank Control 66 Table of Contents Act, any person, including a company, may not acquire, directly or indirectly, control of a bank without providing 60 days’ prior notice and receiving a non-objection from the appropriate federal banking agency.
The Company believes it is in compliance with these requirements as of December 31, 2024. 57 Table of Contents Critical Accounting Estimates The Notes to the Consolidated Financial Statements contain a discussion of the Company's significant accounting policies, including information regarding recently issued accounting pronouncements, adoption of such policies, and the related impact of their adoption.
The Company believes it is in compliance with these requirements as of December 31, 2025. 60 Table of Contents Critical Accounting Estimates The Notes to the Consolidated Financial Statements contain a discussion of the Company's significant accounting policies, including information regarding recently issued accounting pronouncements, adoption of such policies, and the related impact of their adoption.
To mitigate the uninsured deposit risk, the Company participates in the CDARS and ICS programs, which allow an individual customer to invest up to $50 million and $265 million, respectively, through one participating financial institution or, a combined total of $315 million per individual customer, with the entire amount being covered by FDIC insurance.
To mitigate the uninsured deposit risk, the Company participates in the CDARS and ICS programs, which allow an individual customer to invest up to $50 million and $285 million, respectively, through one participating financial institution or, a combined total of $335 million per individual customer, with the entire amount being covered by FDIC insurance.
In addition, FRB policy discourages the payment of dividends by a bank holding company that is not supported by current operating earnings. As a Delaware corporation, the Company is also subject to limitations under Delaware law on the payment of dividends.
In addition, FRB policy discourages the payment of dividends by a bank holding company that is not supported by current operating earnings. 67 Table of Contents As a Delaware corporation, the Company is also subject to limitations under Delaware law on the payment of dividends.
The BHCA requires prior FRB approval for a bank holding company to acquire, directly or indirectly, 5% or more of any class of voting securities of a commercial bank or its parent holding company and for a company, other than a bank 63 Table of Contents holding company, to acquire 25% or more of any class of voting securities of a bank or bank holding company.
The BHCA requires prior FRB approval for a bank holding company to acquire, directly or indirectly, 5% or more of any class of voting securities of a commercial bank or its parent holding company and for a company, other than a bank holding company, to acquire 25% or more of any class of voting securities of a bank or bank holding company.
Each FHLB makes loans to its members in accordance with policies and procedures established by the board of directors of the FHLB. As a member, WAB must purchase and maintain stock in the FHLB of San Francisco. At December 31, 2024, WAB’s total investment in FHLB stock was $138 million.
Each FHLB makes loans to its members in accordance with policies and procedures established by the board of directors of the FHLB. As a member, WAB must purchase and maintain stock in the FHLB of San Francisco. At December 31, 2025, WAB’s total investment in FHLB stock was $151 million.
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 December 31, 2024, respectively.
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 December 31, 2025, respectively.
Net unamortized purchase premiums on acquired and purchased loans of $175 million and $177 million increased the carrying value of loans as of December 31, 2024 and 2023, respectively. 48 Table of Contents The following table sets forth the amount of loans outstanding by type of loan as of December 31, 2024 that were contractually due in under one year, one through five years, after five through 15 years, and more than 15 years based on remaining scheduled repayments of principal.
Net unamortized purchase premiums on acquired and purchased loans of $186 million and $175 million increased the carrying value of loans as of December 31, 2025 and 2024, respectively. 49 Table of Contents The following table sets forth the amount of loans outstanding by type of loan as of December 31, 2025 that were contractually due in under one year, one through five years, after five through 15 years, and more than 15 years based on remaining scheduled repayments of principal.
The Company believes it is fully compliant with the Volcker Rule, including as modified by the EGRRCPA rule. 64 Table of Contents Dividends The Company has paid regular quarterly dividends since the third quarter of 2019.
The Company believes it is fully compliant with the Volcker Rule, including as modified by the EGRRCPA rule. Dividends The Company has paid regular quarterly dividends since the third quarter of 2019.
Tangible common equity represents total stockholders' equity reduced by goodwill and intangible assets and preferred stock. Management believes tangible common equity financial measures are useful in evaluating the Company's capital strength, financial condition, and ability to manage potential losses.
Tangible common equity represents total equity reduced by goodwill and intangible assets, preferred stock, and noncontrolling interest in subsidiary. Management believes tangible common equity financial measures are useful in evaluating the Company's capital strength, financial condition, and ability to manage potential losses.
As a result of passage of the EGRRCPA, bank holding companies with less than $100 billion in assets are exempt from the enhanced prudential standards imposed under Section 165 of the Dodd-Frank Act (including, but not limited to, the resolution planning and enhanced liquidity and risk management requirements therein).
Bank holding companies with less than $100 billion in assets are exempt from the enhanced prudential standards imposed under Section 165 of the Dodd-Frank Act (including, but not limited to, the resolution planning and enhanced liquidity and risk management requirements therein).
The Company has reviewed its securities on which there is an unrealized loss in accordance with its ACL policy described in "Note 1. Summary of Significant Accounting Policies" in Item 8 of this Form 10-K. Based on the analysis performed, management determined an ACL of $0.4 million on the Company's AFS securities was required at December 31, 2024.
The Company has reviewed its securities on which there is an unrealized loss in accordance with its ACL policy described in "Note 1. Summary of Significant Accounting Policies" in Item 8 of this Form 10-K. Based on the analysis performed, management determined no ACL on the Company's AFS securities was required at December 31, 2025.
As of December 31, 2024 and 2023, no borrower relationships at both the commitment and funded loan level exceeded 5% of total loans HFI. Commercial and industrial loans made up 43% and 38% of the Company's HFI loan portfolio as of December 31, 2024 and 2023, respectively.
As of December 31, 2025 and 2024, no borrower relationships at both the commitment and funded loan level exceeded 5% of total loans HFI. Commercial and industrial loans made up 48% and 43% of the Company's HFI loan portfolio as of December 31, 2025 and 2024, respectively.
The rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines a cyber incident has occurred.
A banking organization must notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines a cyber incident has occurred.
The MBS that are not GSE issued consist primarily of investment grade securities, including $921 million rated AAA and $26 million rated AA. Gross unrealized losses on the Company's AFS securities at December 31, 2024 relate primarily to changes in interest rates and other market conditions not considered to be credit-related issues.
The MBS that are not GSE issued consist primarily of investment grade securities, including $1.0 billion rated AAA and $26 million rated AA. Gross unrealized losses on the Company's AFS securities at December 31, 2025 relate primarily to changes in interest rates and other market conditions not considered to be credit-related issues.
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.
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.
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 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.
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 December 31, 2025, modified EBO loans consisted of $27 million in loans that were current to 89 days delinquent and $123 million in loans 90 days or more delinquent.
Net cash provided by financing activities has been impacted significantly by deposit levels. During the years ended December 31, 2024, 2023, and 2022, net deposits increased $11.0 billion, $1.7 billion, and $6.0 billion, respectively. The increase was primarily driven by increases in savings and money market and non-interest-bearing deposits.
Net cash provided by financing activities has been impacted significantly by deposit levels. During the years ended December 31, 2025, 2024, and 2023, net deposits increased $10.8 billion, $11.0 billion, and $1.7 billion, respectively. The increase during the year ended December 31, 2025 was primarily driven by increases in non-interest bearing, savings and money market, and interest bearing demand deposits.
For the Company's annual goodwill impairment test as of October 1, 2024 and 2023, the Company elected to perform a Step 1 goodwill impairment test for all reporting units.
For the Company's annual goodwill impairment test as of October 1, 2025, the Company performed a qualitative goodwill assessment for all reporting units. For the Company's annual goodwill impairment test as of October 1, 2024 and 2023, the Company elected to perform a Step 1 goodwill impairment test.
The decrease in the effective tax rate for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to increases in investment tax credit benefits and tax-exempt income. 44 Table of Contents Business Segment Results The Company's reportable segments are aggregated with a focus on products and services offered and consist of three reportable segments: • Commercial: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry. • Consumer Related: offers both commercial banking services to enterprises in consumer-related sectors and consumer banking services, such as residential mortgage banking. • Corporate & Other: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to other reportable segments, and inter-segment eliminations.
The decrease in the effective tax rate for the year ended December 31, 2025 compared to the same period in 2024 was primarily attributable to higher investment tax credit benefits and a reduction in nondeductible insurance premium expenses. 45 Table of Contents Business Segment Results The Company's operating segments are aggregated with a focus on products and services offered and consist of three reportable segments: • Commercial: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry. • Consumer Related: offers both commercial banking services to enterprises in consumer-related sectors and consumer banking services, such as residential mortgage banking. • Corporate & Other: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to other reportable segments, and inter-segment eliminations.
WAB is a participant in the IntraFi Network, a network that offers deposit placement services such as CDARS and ICS, which offer products that qualify large deposits for FDIC insurance. At December 31, 2024, the Company had $14.0 billion of these reciprocal deposits, compared to $13.3 billion at December 31, 2023.
WAB is a participant in reciprocal deposit networks, such as the IntraFi Network, a network that offers deposit placement services including CDARS and ICS, which offer products that qualify large deposits for FDIC insurance. At December 31, 2025, the Company had $14.4 billion of reciprocal deposits, compared to $14.0 billion at December 31, 2024.
During the year ended December 31, 2024, the allowance level was most impacted by the level of net charge-offs and CRE market conditions, which resulted in recognition of a provision for credit losses of $145.9 million. Changes to the assumptions in the model in future periods could have a material impact on the Company's Consolidated Financial Statements. See "Note 1.
During the year ended December 31, 2025, the allowance level was most impacted by the level of net charge-offs, which resulted in recognition of a provision for credit losses of $224.1 million. Changes to the assumptions in the model in future periods could have a material impact on the Company's Consolidated Financial Statements. See "Note 1.
Recent Market and Banking Industry Developments Market Developments CRE Exposure The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 30% and 33% of total loans at December 31, 2024 and 2023, respectively.
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.
Net deferred loan fees of $106 million and $108 million reduced the carrying value of loans as of December 31, 2024 and 2023, respectively.
Net deferred loan fees of $120 million and $106 million reduced the carrying value of loans as of December 31, 2025 and 2024, respectively.
The following table shows the components used in the calculation of PPNR: Year Ended December 31, 2024 2023 2022 (in millions) Net interest income $ 2,618.9 $ 2,338.9 $ 2,216.3 Total non-interest income 543.2 280.7 324.6 Net revenue $ 3,162.1 $ 2,619.6 $ 2,540.9 Total non-interest expense 2,025.0 1,623.4 1,156.7 Pre-provision net revenue $ 1,137.1 $ 996.2 $ 1,384.2 Less: Provision for credit losses 145.9 62.6 68.1 Income tax expense 203.5 211.2 258.8 Net income $ 787.7 $ 722.4 $ 1,057.3 Efficiency Ratio The following table shows the components used in the calculation of the efficiency ratio, which measures non-interest expense as a ratio of net revenue on a tax equivalent basis.
The following table shows the components used in the calculation of PPNR: Year Ended December 31, 2025 2024 2023 (in millions) Net interest income $ 2,864.8 $ 2,618.9 $ 2,338.9 Total non-interest income 678.2 543.2 280.7 Net revenue $ 3,543.0 $ 3,162.1 $ 2,619.6 Total non-interest expense 2,111.7 2,025.0 1,623.4 Pre-provision net revenue $ 1,431.3 $ 1,137.1 $ 996.2 Less: Provision for credit losses 224.1 145.9 62.6 Income tax expense 216.6 203.5 211.2 Net income $ 990.6 $ 787.7 $ 722.4 Efficiency Ratio The following table shows the components used in the calculation of the efficiency ratio, which measures non-interest expense as a ratio of net revenue on a tax equivalent basis.
The average duration, which is a measure of the interest rate sensitivity of the Company's debt securities portfolio, is 3.4 years as of December 31, 2024. The Company does not hold any subprime MBS in its investment portfolio. Approximately 83% of its MBS are GSE or GNMA issued.
The average duration, which is a measure of the interest rate sensitivity of the Company's debt securities portfolio, is 5.1 years as of December 31, 2025. The Company does not hold any subprime MBS in its investment portfolio. Approximately 86% of its MBS are GSE or GNMA issued.
In addition, the rule requires a bank service provider to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours. The rule became effective May 1, 2022.
In addition, a bank service provider must notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours.
The Company had no deferred tax valuation allowance as of December 31, 2024 and 2023. Bank Owned Life Insurance The carrying value of BOLI totaled $1.0 billion as of December 31, 2024, an increase of $825 million from $186 million as of December 31, 2023. BOLI is used as a tax efficient method to help offset employee benefit costs.
The Company had no deferred tax valuation allowance as of December 31, 2025 and 2024. 57 Table of Contents Bank Owned Life Insurance The carrying value of BOLI totaled $1.1 billion as of December 31, 2025, an increase of $46 million, from December 31, 2024. BOLI is used as a tax efficient method to help offset employee benefit costs.
The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the year ended December 31, 2024 and 2023, the Company recorded a provision for credit losses of $145.9 million and $62.6 million, respectively.
The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the years ended December 31, 2025 and 2024, the Company recorded a provision for credit losses of $224.1 million and $145.9 million, respectively.
Liquidity needs can also be met through short-term borrowings or the disposition of short-term assets. The Company has borrowing capacity with the FHLB and FRB from pledged loans and securities and warehouse borrowing lines of credit.
Liquidity needs can also be met through short-term borrowings or the disposition of short-term assets. The Company has borrowing capacity with the FHLB and FRB from pledged loans and securities and uncommitted funds under warehouse borrowing repurchase agreements.
The following table summarizes the carrying value of the Company's investment securities portfolio: December 31, Increase (Decrease) 2024 2023 (in millions) Debt securities Residential MBS issued by GSEs and GNMA $ 5,831 $ 1,972 $ 3,859 U.S.
The following table summarizes the carrying value of the Company's investment securities portfolio: December 31, Increase (Decrease) 2025 2024 (in millions) Debt securities Residential MBS issued by GSEs and GNMA $ 7,230 $ 5,831 $ 1,399 U.S.
Results of Operations and Financial Condition A summary of the Company's results of operations, financial condition, and selected metrics are included in the following tables: Year Ended December 31, 2024 2023 2022 (dollars in millions, except per share amounts) Net income $ 787.7 $ 722.4 $ 1,057.3 Net income available to common stockholders 774.9 709.6 1,044.5 Earnings per share - basic 7.14 6.55 9.74 Earnings per share - diluted 7.09 6.54 9.70 Return on average assets 0.99 % 1.03 % 1.62 % Return on average equity 12.2 12.6 20.7 Return on average tangible common equity (1) 14.0 14.9 25.4 Net interest margin 3.58 3.63 3.67 (1) See Non-GAAP Financial Measures section beginning on page 38.
A summary of the Company's results of operations, financial condition, and selected metrics are included in the following tables: Year Ended December 31, 2025 2024 2023 (dollars in millions, except per share amounts) Net income $ 990.6 $ 787.7 $ 722.4 Net income available to common stockholders 956.2 774.9 709.6 Earnings per share - basic 8.79 7.14 6.55 Earnings per share - diluted 8.73 7.09 6.54 Return on average assets 1.12 % 0.99 % 1.03 % Return on average equity 13.3 12.2 12.6 Return on average tangible common equity (1) 15.3 14.0 14.9 Net interest margin 3.51 3.58 3.63 (1) See Non-GAAP Financial Measures section beginning on page 39.
Management uses this ratio as a metric for assessing cost efficiency: Year Ended December 31, 2024 2023 2022 (dollars in millions) Total non-interest expense $ 2,025.0 $ 1,623.4 $ 1,156.7 Less: Deposit costs 693.2 436.7 165.8 Total non-interest expense, excluding deposit costs 1,331.8 1,186.7 990.9 Divided by: Total net interest income 2,618.9 2,338.9 2,216.3 Plus: Tax equivalent interest adjustment 39.5 35.5 33.7 Total non-interest income 543.2 280.7 324.6 Less: Deposit costs 693.2 436.7 165.8 $ 2,508.4 $ 2,218.4 $ 2,408.8 Efficiency ratio - tax equivalent basis 63.2 % 61.1 % 44.9 % Efficiency ratio - tax equivalent basis, adjusted for deposit costs 53.1 53.5 41.1 38 Table of Contents Tangible Common Equity and Return on Average Tangible Common Equity The following tables present financial measures related to tangible common equity.
Management uses this ratio as a metric for assessing cost efficiency: Year Ended December 31, 2025 2024 2023 (dollars in millions) Total non-interest expense $ 2,111.7 $ 2,025.0 $ 1,623.4 Less: Deposit costs 630.5 693.2 436.7 Total non-interest expense, excluding deposit costs 1,481.2 1,331.8 1,186.7 Divided by: Total net interest income 2,864.8 2,618.9 2,338.9 Plus: Tax equivalent interest adjustment 40.0 39.5 35.5 Total non-interest income 678.2 543.2 280.7 Less: Deposit costs 630.5 693.2 436.7 $ 2,952.5 $ 2,508.4 $ 2,218.4 Efficiency ratio - tax equivalent basis 58.9 % 63.2 % 61.1 % Efficiency ratio - tax equivalent basis, adjusted for deposit costs 50.2 53.1 53.5 39 Table of Contents Tangible Common Equity and Return on Average Tangible Common Equity The following tables present financial measures related to tangible common equity.
The following table summarizes the allocation of the ACL on loans HFI by loan portfolio segment: December 31, 2024 December 31, 2023 Allowance for credit losses Percent of total allowance for credit losses Percent of loan type to total loans HFI Allowance for credit losses Percent of total allowance for credit losses Percent of loan type to total loans HFI (dollars in millions) Warehouse lending $ 6.4 1.7 % 15.3 % $ 5.8 1.7 % 13.2 % Municipal & nonprofit 14.7 3.9 3.0 14.7 4.4 3.1 Tech & innovation 55.9 15.0 6.3 42.1 12.5 5.6 Equity fund resources 1.6 0.4 1.7 1.3 0.4 1.7 Other commercial and industrial 77.8 20.8 17.1 81.4 24.2 14.8 CRE - owner occupied 3.4 0.9 3.1 6.0 1.8 3.3 Hotel franchise finance 35.3 9.4 7.1 33.4 9.9 7.6 Other CRE - non-owner occupied 134.4 36.0 11.8 96.0 28.5 11.9 Residential 19.7 5.3 24.1 23.1 6.9 26.4 Residential - EBO — — 1.8 — — 2.4 Construction and land development 21.3 5.7 8.4 30.4 9.0 9.6 Other 3.3 0.9 0.3 2.5 0.7 0.4 Total $ 373.8 100.0 % 100.0 % $ 336.7 100.0 % 100.0 % During the years ended December 31, 2024 and 2023, net loan charge-offs to average loans outstanding were 0.18% and 0.06%, respectively.
The following table summarizes the allocation of the ACL on loans HFI by loan portfolio segment: December 31, 2025 December 31, 2024 Allowance for credit losses Percent of total allowance for credit losses Percent of loan type to total loans HFI Allowance for credit losses Percent of total allowance for credit losses Percent of loan type to total loans HFI (dollars in millions) Mortgage finance $ 5.5 1.2 % 12.4 % $ 4.8 1.3 % 11.5 % Municipal & nonprofit 13.0 2.8 2.8 14.7 3.9 3.0 Tech & innovation 44.8 9.7 7.0 55.9 15.0 6.3 Equity fund resources 2.6 0.6 2.1 1.6 0.4 1.7 Other commercial and industrial 184.7 40.2 23.6 79.4 21.2 20.9 CRE - owner occupied 3.4 0.7 2.6 3.4 0.9 3.1 Hotel franchise finance 37.7 8.2 7.1 35.3 9.4 7.1 Other CRE - non-owner occupied 110.4 24.0 11.0 134.4 36.0 11.8 Residential 23.7 5.1 22.8 19.7 5.3 24.1 Residential - EBO — — 1.4 — — 1.8 Construction and land development 32.3 7.0 6.9 21.3 5.7 8.4 Other 2.5 0.5 0.3 3.3 0.9 0.3 Total $ 460.6 100.0 % 100.0 % $ 373.8 100.0 % 100.0 % During the years ended December 31, 2025 and 2024, net loan charge-offs to average loans outstanding were 0.24% and 0.18%, respectively.
During the years ended December 31, 2024 and 2023, the Company completed modifications of EBO loans with an amortized cost of $366 million and $225 million, respectively. These modifications were largely payment delays and term extensions.
During the years ended December 31, 2025, 2024, and 2023, the Company completed modifications of EBO loans with an amortized cost of $532 million, $366 million, and $225 million, respectively. These modifications consisted of term extensions, payment delays, and interest rate reductions.
The Company has elected this capital relief option. 66 Table of Contents Prompt Corrective Action and Safety and Soundness Pursuant to Section 38 of the FDIA, federal banking agencies are required to take “prompt corrective action” should a depository institution fail to meet certain capital adequacy standards.
Prompt Corrective Action and Safety and Soundness Pursuant to Section 38 of the FDIA, federal banking agencies are required to take “prompt corrective action” should a depository institution fail to meet certain capital adequacy standards.
The following table summarizes the Company's key asset quality metrics for loans HFI: At or for the Year Ended December 31, 2024 2023 2022 (dollars in millions) Nonaccrual loans $ 476 $ 273 $ 85 Repossessed assets 52 8 11 Non-performing assets 528 418 98 Nonaccrual loans to funded loans 0.89 % 0.54 % 0.16 % Nonaccrual and repossessed assets to total assets 0.65 0.40 0.14 Allowance for loan losses to funded loans 0.70 0.67 0.60 Allowance for credit losses to funded loans 0.77 0.73 0.69 Allowance for loan losses to nonaccrual loans 79 123 364 Allowance for credit losses to nonaccrual loans 87 135 419 Net charge-offs to average loans outstanding 0.18 0.06 0.00 36 Table of Contents Asset and Deposit Growth The Company’s assets and liabilities are comprised primarily of loans and deposits.
The following table summarizes the Company's key asset quality metrics for loans HFI: At or for the Year Ended December 31, 2025 2024 2023 (dollars in millions) Nonaccrual loans $ 500 $ 476 $ 273 Repossessed assets 137 52 8 Non-performing assets 817 656 418 Nonaccrual loans to funded loans 0.85 % 0.89 % 0.54 % Nonaccrual and repossessed assets to total assets 0.69 0.65 0.40 Allowance for loan losses to funded loans 0.78 0.70 0.67 Allowance for credit losses to funded loans 0.87 0.77 0.73 Allowance for loan losses to nonaccrual loans 92 79 123 Allowance for credit losses to nonaccrual loans 102 87 135 Net charge-offs to average loans outstanding 0.24 0.18 0.06 37 Table of Contents Asset and Deposit Growth The Company’s assets and liabilities are comprised primarily of loans and deposits.
HTM securities are carried at amortized cost, adjusted for amortization of premiums or accretion of discounts. AFS securities are carried at fair value with unrealized gains or losses on these securities recorded in AOCI in stockholders’ equity, net of tax. Trading securities are reported at fair value, with unrealized gains and losses on these securities included in current period earnings.
AFS securities are carried at fair value with unrealized gains or losses on these securities recorded in AOCI in stockholders’ equity, net of tax. Trading securities are reported at fair value, with unrealized gains and losses on these securities included in current period earnings.
The actual capital amounts and ratios for the Company and the Bank are presented in the following tables: Total Capital Tier 1 Capital Risk-Weighted Assets Tangible Average Assets Total Capital Ratio Tier 1 Capital Ratio Tier 1 Leverage Ratio Common Equity Tier 1 (dollars in millions) December 31, 2024 WAL $ 7,922 $ 6,687 $ 56,019 $ 82,691 14.1 % 11.9 % 8.1 % 11.3 % WAB 7,444 6,803 55,983 82,562 13.3 12.2 8.2 12.2 Well-capitalized ratios 10.0 8.0 5.0 6.5 Minimum capital ratios 8.0 6.0 4.0 4.5 December 31, 2023 WAL $ 7,201 $ 6,035 $ 52,517 $ 70,295 13.7 % 11.5 % 8.6 % 10.8 % WAB 6,802 6,229 52,508 70,347 13.0 11.9 8.9 11.9 Well-capitalized ratios 10.0 8.0 5.0 6.5 Minimum capital ratios 8.0 6.0 4.0 4.5 The Company and the Bank are also subject to liquidity and other regulatory requirements as administered by the federal banking agencies.
The actual capital amounts and ratios for the Company and the Bank are presented in the following tables: Total Capital Tier 1 Capital Risk-Weighted Assets Tangible Average Assets Total Capital Ratio Tier 1 Capital Ratio Tier 1 Leverage Ratio Common Equity Tier 1 (dollars in millions) December 31, 2025 WAL $ 9,185 $ 7,672 $ 63,408 $ 94,007 14.5 % 12.1 % 8.2 % 11.0 % WAB 8,667 7,750 63,395 93,891 13.7 12.2 8.3 11.8 Well-capitalized ratios 10.0 8.0 5.0 6.5 Minimum capital ratios 8.0 6.0 4.0 4.5 December 31, 2024 WAL $ 7,922 $ 6,687 $ 56,019 $ 82,691 14.1 % 11.9 % 8.1 % 11.3 % WAB 7,444 6,803 55,983 82,562 13.3 12.2 8.2 12.2 Well-capitalized ratios 10.0 8.0 5.0 6.5 Minimum capital ratios 8.0 6.0 4.0 4.5 The Company and the Bank are also subject to liquidity and other regulatory requirements as administered by the federal banking agencies.
In more serious cases, enforcement actions may include: (i) the issuance of directives to increase capital; (ii) the issuance of formal and informal agreements; (iii) the imposition of civil monetary penalties; (iv) the issuance of a cease and desist order that can be judicially enforced; (v) the issuance of removal and prohibition orders against officers, directors, and other institution-affiliated parties; (vi) the termination of the bank’s deposit insurance; (vii) the appointment of a conservator or receiver for the bank; and (viii) the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the agency would be harmed if such equitable relief was not granted.
In more serious cases, enforcement actions may include: (i) the issuance of directives to increase capital; (ii) the issuance of formal and informal agreements; (iii) the imposition of civil monetary penalties; (iv) the issuance of a cease and desist order that can be judicially enforced; (v) the issuance of removal and prohibition orders against officers, directors, and other institution-affiliated parties; (vi) the termination of the bank’s deposit insurance; (vii) the appointment of a conservator or receiver for the bank; and (viii) the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the agency would be harmed if such equitable relief was not granted. 69 Table of Contents Transactions with Affiliates and Insiders Under federal law, transactions between insured depository institutions and their affiliates are governed by Sections 23A and 23B of the FRA and Regulation W.
The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services it believes are best suited to its particular community, consistent with the CRA.
The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services it believes are best suited to its particular community, consistent with the CRA. WAB received a rating of “Satisfactory” in its most recent CRA examination, in April 2022.
The Company also serves business customers through a national platform of specialized financial services. WAL and WAB are also supervised by the CFPB for compliance with federal consumer financial protection laws. The Company’s non-depository subsidiaries are subject to federal and state laws and regulations, including regulations of the FRB and with respect to WATC, the OCC.
WAL and WAB are also supervised by the CFPB for compliance with federal consumer financial protection laws. The Company’s non-depository subsidiaries are subject to federal and state laws and regulations, including regulations of the FRB and with respect to WATC, the OCC.
Comparison of interest income, interest expense and net interest margin The Company's primary source of revenue is interest income. For the year ended December 31, 2024, interest income was $4.5 billion, an increase of $505.8 million, or 12.5%, compared to $4.0 billion for the year ended December 31, 2023.
Comparison of interest income, interest expense and net interest margin The Company's primary source of revenue is interest income. For the year ended December 31, 2025, interest income totaled $4.7 billion, an increase of $151.8 million, or 3.3%, compared to $4.5 billion for the year ended December 31, 2024.
December 31, 2024 2023 (dollars in millions) Total nonaccrual loans (1) $ 476 $ 273 Loans past due 90 days or more on accrual status (2) — 42 Accruing restructured loans $ 128 95 Total nonperforming loans 604 410 Other assets acquired through foreclosure, net $ 52 $ 8 Nonaccrual loans to funded loans HFI 0.89 % 0.54 % Loans past due 90 days or more on accrual status to funded loans HFI (2) — 0.08 (1) Includes loan modifications to borrowers experiencing financial difficulty of $169 million and $111 million at December 31, 2024 and 2023, respectively.
December 31, 2025 2024 (dollars in millions) Total nonaccrual loans (1) $ 500 $ 476 Loans past due 90 days or more on accrual status (2) 66 — Accruing restructured loans $ 114 128 Total nonperforming loans 680 604 Other assets acquired through foreclosure, net $ 137 $ 52 Nonaccrual loans to funded loans HFI 0.85 % 0.89 % Loans past due 90 days or more on accrual status to funded loans HFI (2) 0.11 — (1) Includes loan modifications to borrowers experiencing financial difficulty of $89 million and $169 million at December 31, 2025 and 2024, respectively.
As of December 31, 2024, the Company had $1.7 billion of CDARS and $10.1 billion of ICS deposits. As of December 31, 2024, the Company had $6.9 billion of wholesale brokered deposits outstanding.
As of December 31, 2025, the Company had $1.9 billion of CDARS and $10.9 billion of ICS deposits. As of December 31, 2025, the Company had $5.4 billion of wholesale brokered deposits outstanding.
In addition, all federal and state banking regulators continue to increase focus on cybersecurity programs and risks as part of regular supervisory exams. On November 18, 2021, the federal bank regulatory agencies issued a final rule to improve the sharing of information about cyber incidents that may affect the U.S. banking system.
In addition, all federal and state banking regulators continue to increase focus on cybersecurity programs and risks as part of regular supervisory exams. The federal bank also adopted rules to improve the sharing of information about cyber incidents that may affect the U.S. banking system.
The following is a summary of acquired intangible assets: December 31, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Subject to amortization Core deposits $ 14 $ 13 $ 1 $ 14 $ 12 $ 2 Correspondent customer relationships 76 14 62 76 10 66 Customer relationships 18 9 9 18 6 12 Developed technology 4 2 2 4 2 2 Operating licenses 56 6 50 56 4 52 Trade names 10 2 8 10 2 8 $ 178 $ 46 $ 132 $ 178 $ 36 $ 142 Deferred Tax Assets As of December 31, 2024, the net DTA balance totaled $281 million, a decrease from $287 million as of December 31, 2023.
The following is a summary of acquired intangible assets: December 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Subject to amortization Core deposits $ 14 $ 14 $ — $ 14 $ 13 $ 1 Correspondent customer relationships 76 18 58 76 14 62 Customer relationships 18 11 7 18 9 9 Developed technology 4 3 1 4 2 2 Operating licenses 56 7 49 56 6 50 Trade names 10 3 7 10 2 8 Total intangible assets subject to amortization $ 178 $ 56 $ 122 $ 178 $ 46 $ 132 Deferred Tax Assets As of December 31, 2025, the net DTA balance totaled $349 million, an increase of $68 million from $281 million as of December 31, 2024.
The average balances and weighted average rates paid on deposits are presented below: Year Ended December 31, 2024 2023 2022 Average Balance Rate Average Balance Rate Average Balance Rate (dollars in millions) Interest bearing demand accounts $ 16,155 2.98 % $ 12,422 2.83 % $ 8,331 0.95 % Savings and money market accounts 17,462 3.49 14,903 2.87 18,518 0.86 Certificates of deposit 10,085 5.05 7,945 4.56 2,772 1.40 Total interest bearing deposits 43,702 3.66 35,270 3.24 29,621 0.93 Non-interest bearing deposits 22,017 — 18,293 — 24,133 — Total deposits $ 65,719 2.43 % $ 53,563 2.13 % $ 53,754 0.51 % At December 31, 2024 and 2023, the Company had total uninsured deposits of $17.6 billion and $15.2 billion, respectively.
The average balances and weighted average rates paid on deposits are presented below: Year Ended December 31, 2025 2024 2023 Average Balance Rate Average Balance Rate Average Balance Rate (dollars in millions) Interest bearing demand accounts $ 16,259 2.46 % $ 16,155 2.98 % $ 12,422 2.83 % Savings and money market accounts 22,617 3.12 17,462 3.49 14,903 2.87 Certificates of deposit 10,015 4.31 10,085 5.05 7,945 4.56 Total interest bearing deposits 48,891 3.15 43,702 3.66 35,270 3.24 Non-interest bearing deposits 24,926 — 22,017 — 18,293 — Total deposits $ 73,817 2.08 % $ 65,719 2.43 % $ 53,563 2.13 % At December 31, 2025 and 2024, the Company had total uninsured deposits of $22.9 billion and $17.6 billion, respectively.
As of December 31, 2024, approximately $25.0 billion, or 72.5%, of total variable rate loans were subject to rate floors with a weighted average interest rate of 5.1%.
As of December 31, 2025, approximately $30.5 billion, or 75.8%, of total variable rate loans were subject to rate floors with a weighted average interest rate of 5.0%.
The Company also provides an array of specialized financial services across the country, including mortgage banking services through AmeriHome, treasury management services to the homeowner's association sector, and digital payment services for the class action legal industry. 2024 Financial Highlights • Net income available to common stockholders of $774.9 million for 2024, an increase from $709.6 million for 2023 • Diluted earnings per share of $7.09 for 2024, an increase from $6.54 per share for 2023 • Net revenue of $3.2 billion, constituting year-over-year growth of 20.7%, or $542.5 million, compared to an increase in non-interest expenses of 24.7%, or $401.6 million • PPNR 1 increased $140.9 million to $1.1 billion, compared to $996.2 million in 2023 • Effective tax rate o f 20.5% for 2024, compared to 22.6% for 2023 • Total loans HFI of $53.7 billion, up $3.4 billion from December 31, 2023 • Total deposits of $66.3 billion, up $11.0 billion from December 31, 2023 • Stockholders' equity of $6.7 billion, an increase of $629 million from December 31, 2023 • Nonperforming assets (nonaccrual loans and repossessed assets) increased to 0.65% of total assets, from 0.40% at December 31, 2023 • Net loan charge-offs to average loans outstanding of 0.18% for 2024, compared to 0.06% for 2023 • Net interest margin of 3.58% in 2024, decreased from 3.63% in 2023 • Return on average assets of 0.99% for 2024, compared to 1.03% for 2023 • Tangible common equity ratio 1 of 7.2%, compared to 7.3% at December 31, 2023 • Tangible book value per share, net of tax 1 , of $52.27, an increase of 11.9% from $46.72 at December 31, 2023 • Efficiency ratio 1 of 63.2% in 2024, compared to 61.1% in 2023 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, 2024. 1 See Non-GAAP Financial Measures section beginning on page 38. 35 Table of Contents As a bank holding company, management focuses on key ratios in evaluating the Company's financial condition and results of operations.
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 • PPNR 1 increased $294.2 million to $1.4 billion, compared to $1.1 billion in 2024 • Effective tax rate o f 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 ratio 1 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 tax 1 , of $61.29, an increase of 17.3% from $52.27 at December 31, 2024 • Efficiency ratio 1 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. 36 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.
At December 31, 2024, the Company held $15.9 billion in liquid assets, comprised of $3.3 billion in cash on deposit at the FRB and $12.6 billion in liquid securities not currently used as collateral for borrowings or other purposes.
At December 31, 2025, the Company held $19.8 billion in liquid assets, comprised of $1.6 billion in cash on deposit at the FRB and $18.2 billion in liquid securities not currently used as collateral for borrowings or other purposes.
The Capital Rules also include a capital conservation buffer which is designed to absorb losses during periods of economic stress. Banking institutions are required to maintain a 2.5% capital conservation buffer in addition to each of the minimum risk-based capital ratios to avoid constraints on dividends, equity repurchases, and discretionary bonus payments.
Banking institutions are required to maintain a 2.5% capital conservation buffer in addition to each of the minimum risk-based capital ratios to avoid constraints on dividends, equity repurchases, and discretionary bonus payments.
Further, in connection with the FRB’s rules implementing the enhanced prudential standards required by Dodd-Frank (and as subsequently modified by application of the EGRRCPA’s higher consolidated asset thresholds for bank holding companies), the Company has established a risk committee of the BOD to manage enterprise-wide risk and has retained its separate risk committee of independent directors.
Further, in connection with the FRB’s rules implementing the enhanced prudential standards required by Dodd-Frank, the Company has established a risk committee of the BOD to manage enterprise-wide risk and has retained its separate risk committee of independent directors.
Amount of Commitment Expiration per Period Total Amounts Committed Less Than 1 Year 1-3 Years 3-5 Years After 5 Years (in millions) Commitments to extend credit $ 13,546 $ 3,298 $ 5,465 $ 2,279 $ 2,504 Credit card commitments and financial guarantees 585 585 — — — Letters of credit 437 179 29 137 92 Total $ 14,568 $ 4,062 $ 5,494 $ 2,416 $ 2,596 The following table sets forth certain information regarding short-term borrowings: December 31, 2024 2023 2022 (dollars in millions) Repurchase Agreements: Maximum month-end balance $ 205 $ 2,614 $ 523 Balance at end of year 14 6 27 Average balance 15 1,076 76 Federal Funds Purchased Maximum month-end balance 210 745 1,860 Balance at end of year — 175 640 Average balance 17 127 568 FHLB Advances: Maximum month-end balance 6,300 11,000 6,000 Balance at end of year 3,100 6,200 4,300 Average balance 3,375 3,732 2,526 FRB Advances: Maximum month-end balance — 1,300 — Balance at end of year — — — Average balance — 1,962 — Warehouse borrowings: Maximum month-end balance 416 2,101 160 Balance at end of year — 376 — Average balance 372 855 201 Total Short-Term Borrowed Funds $ 3,114 $ 6,757 $ 4,967 Weighted average interest rate at end of year 4.75 % 5.72 % 4.64 % Weighted average interest rate during year 5.60 5.58 2.28 The Company has also committed to irrevocably and unconditionally guarantee the payments or distributions with respect to the holders of preferred securities of the Company's eight statutory business trusts to the extent the trusts have not made such payments or distributions, including: 1) accrued and unpaid distributions; 2) the redemption price; and 3) upon a dissolution or termination of the trust, the lesser of the liquidation amount and all accrued and unpaid distributions and the amount of assets of the trust remaining available for distribution.
Amount of Commitment Expiration per Period Total Amounts Committed Less Than 1 Year 1-3 Years 3-5 Years After 5 Years (in millions) Commitments to extend credit $ 15,420 $ 2,953 $ 6,776 $ 2,487 $ 3,204 Credit card commitments and financial guarantees 813 813 — — — Letters of credit 598 218 296 26 58 Total $ 16,831 $ 3,984 $ 7,072 $ 2,513 $ 3,262 The following table sets forth certain information regarding short-term borrowings: December 31, 2025 2024 2023 (dollars in millions) Repurchase Agreements: Maximum month-end balance $ 974 $ 205 $ 2,614 Balance at end of year — 14 6 Average balance 224 15 1,076 Federal Funds Purchased Maximum month-end balance — 210 745 Balance at end of year — — 175 Average balance 1 17 127 FHLB Advances: Maximum month-end balance 4,600 6,300 11,000 Balance at end of year 3,800 3,100 6,200 Average balance 2,126 3,375 3,732 FRB Advances: Maximum month-end balance — — 1,300 Balance at end of year — — — Average balance — — 1,962 Warehouse borrowings: Maximum month-end balance 86 416 2,101 Balance at end of year — — 376 Average balance 225 372 855 Total Short-Term Borrowed Funds $ 3,800 $ 3,114 $ 6,757 Weighted average interest rate at end of year 4.02 % 4.75 % 5.72 % Weighted average interest rate during year 4.46 5.60 5.58 The Company has also committed to irrevocably and unconditionally guarantee the payments or distributions with respect to the holders of preferred securities of the Company's eight statutory business trusts to the extent the trusts have not made such payments or distributions, including: 1) accrued and unpaid distributions; 2) the redemption price; and 3) upon a dissolution or termination of the trust, the lesser of the liquidation amount and all accrued and unpaid distributions and the amount of assets of the trust remaining available for distribution.
Accordingly, capital ratios and amounts in 2024 include a 25% capital benefit that resulted from the increased ACL related to the adoption of ASC 326, compared to a 50% capital benefit for 2023.
Accordingly, capital ratios and amounts for 2024 include a 25% capital benefit that resulted from the increased ACL related to the adoption of ASC 326. This capital benefit was fully phased out beginning in 2025.
The following table presents the outstanding balance on the Company's unsecured federal funds lines of credit as of December 31, 2024: Outstanding Balance (in millions) Unsecured fed funds credit lines at correspondent banks $ — The Company also plans for potential funding needs related to operating expenses, which in some cases involve contracts that contain penalties for early termination.
There were no outstanding borrowings on the Company's unsecured federal funds lines of credit as of December 31, 2025. The Company also plans for potential funding needs related to operating expenses, which in some cases involve contracts that contain penalties for early termination.
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institution.
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institution. 70 Table of Contents Federal Deposit Insurance Substantially all of the deposits of WAB are insured up to applicable limits by the FDIC’s DIF.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

21 edited+1 added−2 removed9 unchanged
Biggest changeThe Company's non-term deposit products re-price with a certain beta to underlying market rate changes. These betas are derived separately by deposit product and are based on both observed and projected market rate and balance trends. Current product-level deposit beta assumptions range between 46% to 92%, depending on product, with an average interest bearing deposit beta of 57%.
Biggest changeThe Company's non-term deposits reprice to underlying market rate changes based on product and line of business level model assumptions. Current non-term deposit repricing assumptions result in a product-level beta range of 52% to 99%, depending on product, with an average beta of 62%.
The Company's simulation model focuses on parallel interest rate shocks and takes into account assumptions related to loan prepayment trends that are sourced using a combination of third-party prepayment models and internal historical experience, terminal maturity for non-maturity deposits, decay attrition, and pricing sensitivity derived from the Company's data and other internally-developed analysis and models.
The Company's simulation model focuses on parallel interest rate shocks and takes into account assumptions related to loan prepayment trends that are sourced using a combination of third-party prepayment models and internal historical experience, terminal maturity for non-maturity deposits, account attrition, and pricing sensitivity derived from the Company's data and other internally-developed analysis and models.
These assumptions are inherently uncertain and as a result, actual results may differ from simulated results due to factors such as timing, magnitude and frequency of interest rate changes as well as changes in market conditions, customer behavior, management strategies, and changes that vary significantly from the modeled assumptions may have a significant effect on the Company's actual net interest income. 72 Table of Contents The table below presents the changes in net interest income that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates based on a dynamic balance sheet.
These assumptions are inherently uncertain and as a result, actual results may differ from simulated results due to factors such as timing, magnitude and frequency of interest rate changes as well as changes in market conditions, customer behavior, management strategies, and changes that vary significantly from the modeled assumptions may have a significant effect on the Company's actual net interest income. 74 Table of Contents The table below presents the changes in net interest income that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates based on a dynamic balance sheet.
The Company's EaR and EVE exposure limits are approved by the BOD on an annual basis, or more often if market conditions warrant. During the year ended December 31, 2024, there have been no changes to the Company's exposure limits. Net Interest Income Simulation.
The Company's EaR and EVE exposure limits are approved by the BOD on an annual basis, or more often if market conditions warrant. During the year ended December 31, 2025, there have been no changes to the Company's exposure limits. Net Interest Income Simulation.
To that end, management actively monitors and manages the Company's interest rate risk exposure. Management uses various asset/liability strategies to manage the re-pricing characteristics of the Company's assets and liabilities, all of which are designed to ensure that exposure to interest rate fluctuations is within the Company's guidelines of acceptable levels of risk-taking.
To that end, management actively monitors and manages the Company's interest rate risk exposure. Management uses various strategies to manage the re-pricing characteristics of the Company's assets and liabilities, all of which are designed to ensure that exposure to interest rate fluctuations is within the Company's guidelines of acceptable levels of risk-taking.
This analysis calculates the difference between a baseline net interest income forecast using forward yield curves, compared to forecasted net income results from an immediate, parallel shift in rates upward or downward, along with other scenarios directed by ALCO. The simulation model includes various assumptions regarding re-pricing relationships for each of the Company's products.
This analysis calculates the difference between a baseline net interest income forecast using forward yield curves, compared to forecasted net interest income results from an immediate, parallel shift in rates upward or downward, along with other scenarios directed by ALCO. The simulation model includes various assumptions regarding repricing relationships for each of the Company's products.
Hedging strategies, including the terms and pricing of loans and deposits and management of the deployment of its securities, are used to reduce mismatches in interest rate re-pricing opportunities of portfolio assets and their funding sources.
Hedging strategies, including the terms and pricing of loans and deposits and management of the deployment of its securities, are used to reduce mismatches in interest rate repricing opportunities of portfolio assets and their funding sources.
To measure interest rate risk at December 31, 2024, the Company used a simulation model to project changes in net interest income resulting from forecasted changes in interest rates.
To measure interest rate risk at December 31, 2025, the Company used a simulation model to project changes in net interest income resulting from forecasted changes in interest rates.
Many of the Company's assets are variable rate loans, which are assumed to re-price at the next rate re-set period and, proportional to the change in market rates, depending on their contracted index, including the impact of caps or floors. The simulation model also incorporates prepayment assumptions for applicable loans and investments with such optionality.
Many of the Company's assets are variable rate loans, which are assumed to reprice at the next rate reset period and, proportional to the change in market rates, depending on their contracted index, including the impact of caps or floors. The simulation model also incorporates prepayment assumptions for applicable loans and investments with such optionality.
Derivatives and Hedging Activities" in Item 8 of this Form 10-K. 73 Table of Contents
Derivatives and Hedging Activities" in Item 8 of this Form 10-K. 75 Table of Contents
At December 31, 2024, the Company’s earnings exposure for the next twelve months related to these hypothetical changes in market interest rates was within the Company’s current guidelines. Economic Value of Equity.
At December 31, 2025, the Company’s earnings exposure for the next twelve months related to these hypothetical changes in market interest rates was within the Company’s current limits. Economic Value of Equity.
Derivatives in a hedging relationship are also used to minimize the Company's exposure to changes in benchmark interest rates and volatility of net interest income and EVE to interest rate fluctuations, with their impact reflected in the model results discussed below. Interest rate risk is addressed by ALCO, which includes members of executive management, finance, and operations.
Derivatives in a hedging relationship are also used to minimize the Company's exposure to changes in benchmark interest rates based on impacts to net interest income and EVE, which are reflected in the model results discussed below. Interest rate risk is addressed by ALCO, which includes members of executive management, finance, and operations.
Sensitivity of Net Interest Income Down 200 Down 100 Up 100 Up 200 (change in basis points from Base) Parallel Shock Scenario (8.6) % (4.7) % 5.4 % 10.9 % Gradual Ramp Scenario (5.8) (3.0) 3.1 6.5 Earnings-at-Risk.
Sensitivity of Net Interest Income Interest Rate Scenario Down 200 Down 100 Up 100 Up 200 (change in basis points from Base) Parallel Shock Scenario (8.1) % (4.1) % 4.5 % 9.2 % Gradual Ramp Scenario (5.7) (2.7) 2.7 5.4 Earnings-at-Risk.
As a result of the higher deposit betas on deposits eligible for ECRs, in the down simulation scenarios, the Company will benefit from lower deposit costs. In a shock down 100 basis points scenario, ECR related deposit costs would decrease 23% from the baseline forecast over the next twelve months.
As a result of the higher deposit betas on deposits eligible for ECRs and referral fees, in the down simulation scenarios, the Company will benefit from lower deposit costs. In a shock down 100 basis points scenario, such deposit costs would decrease 27% from the baseline forecast over the next twelve months.
The following table shows the Company's projected change in EVE for this set of rate shocks at December 31, 2024: Economic Value of Equity Interest Rate Scenario Down 200 Down 100 Up 100 Up 200 (change in basis points from Base) % Change 3.6 % 2.9 % (3.3) % (6.4) % At December 31, 2024, the Company's EVE exposure related to these hypothetical changes in market interest rates was within the Company's current guidelines.
The following table shows the Company's projected change in EVE for this set of rate shocks at December 31, 2025: Economic Value of Equity Interest Rate Scenario Down 200 Down 100 Up 100 Up 200 (change in basis points from Base) % Change 1.7 % 2.6 % (5.8) % (13.1) % At December 31, 2025, the Company's EVE exposure related to these hypothetical changes in market interest rates was within the Company's current limits.
In the Company’s EaR simulation model as of December 31, 2024, deposits eligible for ECRs re-price with a beta assumption of 76% to underlying market rate changes, and total non-maturity deposits, inclusive of ECRs, re-price with a weighted average beta assumption of 64%.
In the Company’s EaR simulation model as of December 31, 2025, deposits eligible for ECRs and referral fees reprice with a beta assumption of 74% to underlying market rate changes, and total non-maturity deposits, inclusive of ECRs and referral fees, reprice with a weighted average beta assumption of 66%.
This simulation model assesses the changes in the market value of interest rate sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates.
This simulation model assesses the changes in the market value of interest rate sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates. The Company continues to evaluate the scenarios that are presented as interest rates change and will update these scenario disclosures as appropriate.
The results will also be impacted by seasonality in the balance sheet. Furthermore, loan prepayment rate estimates and spread relationships change regularly. Interest rate changes impact actual loan prepayment speeds and these changes may result in differences in the market estimates incorporated in this analysis.
The results will also be impacted by seasonality in the balance sheet. Furthermore, loan prepayment rate estimates and spread relationships change regularly.
These assumptions are reviewed at least annually and are adjusted periodically to reflect changes in market conditions and the Company's balance sheet composition. As simulated model results are based on a number of assumptions outlined above, including forecasted market conditions, actual amounts may differ significantly from the projections set forth below should market conditions vary from the underlying assumptions.
As a result of this update, deposit duration decreased and the projected change in EVE to market rates increased. As simulated model results are based on a number of assumptions outlined above, including forecasted market conditions, actual amounts may differ significantly from the projections set forth below should market conditions vary from the underlying assumptions.
In addition, certain rate-sensitive non-interest income and expense items are also subject to market risk, including mortgage banking and servicing income and ECR deposit costs. Mortgage originations and prepayments are sensitive to interest rates and therefore, mortgage banking and servicing income can be impacted by volatility in interest rates.
Mortgage originations and prepayments are sensitive to interest rates and therefore, mortgage banking and servicing income can be impacted by changes in interest rates.
The Company’s EaR simulation model expands on its net interest income simulation, as described above, by incorporating these non-interest income and expenses amounts to measure the impact of forecasted changes in interest rates on earnings (defined as net interest income plus rate-sensitive non-interest income and expense).
The Company’s EaR simulation model expands on its net interest income simulation, as described above, by adding certain rate-sensitive non-interest income and expense items also subject to market risk, including mortgage banking and servicing income and certain deposit costs.
Removed
The EVE and earnings simulations reported as of December 31, 2024 incorporate model enhancements that support optionality for callable securities and improve cash flow projections for structured securities. These model enhancements decreased the Company’s asset duration and improved EVE sensitivity to changes in interest rates.
Added
These assumptions are reviewed at least annually and are adjusted periodically to reflect changes in market conditions and the Company's balance sheet composition. A new deposit model was recently implemented to enhance the estimation of balance attrition and the effective maturity of non-term deposits.
Removed
The Company continues to evaluate the scenarios that are presented as interest rates change and will update these scenario disclosures as appropriate.

Other WAL 10-K year-over-year comparisons