Company: WAL-PA
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001628280-25-047883
Chunk: 92

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 92
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 million for the three and nine months ended September 30, 2025, respectively, compared to $4.5 million and $13.3 million for the respective periods in 2024. These amounts are recorded as Net loan servicing revenue in the Consolidated Income Statement.In accordance with its contractual loan servicing obligations, the Company is required to advance funds to or on behalf of investors when borrowers do not make payments. The Company advances property taxes and insurance premiums for borrowers who have insufficient funds in escrow accounts, plus any other costs to preserve real estate properties. The Company may also advance funds to maintain, repair, and market foreclosed real estate properties. The Company is entitled to recover all or a portion of the advances from borrowers of reinstated and performing loans, from the proceeds of liquidated properties or from the government agency or GSE guarantor of charged-off loans. Servicing advances are charged-off when they are deemed to be uncollectible. As of September 30, 2025 and December 31, 2024, net servicing advances totaled $64 million and $84 million, respectively, which are recorded as Other assets on the Consolidated Balance Sheet.The following table presents the effect of hypothetical changes in the fair value of MSRs caused by assumed immediate changes in the below inputs that are used to determine fair value:September 30, 2025(in millions)Fair value of mortgage servicing rights$1,213 Increase (decrease) in fair value resulting from:Interest rate change of 50 basis pointsAdverse change(114)Favorable change91 Option adjusted spread change of 50 basis pointsIncrease(30)Decrease31 Conditional prepayment rate change of 1%Increase(35)Decrease38 Cost to service change of 10%Increase(12)Decrease13 

Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. In addition, the offsetting effect of hedging activities are not contemplated in these results and further, the effect of a variation in a particular assumption is calculated without changing any other assumptions, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those reported. 

6. OTHER ASSETS ACQUIRED THROUGH FORECLOSUREOther assets acquired through