Company: WAL-PA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001212545-25-000090
Chunk: 93

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 93
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 ended December 31, 2023. This increase was primarily the result of a $243.5 million increase from investment securities due to a $5.3 billion increase in average investment securities balances and a $216.4 million increase from HFI loans due to a $2.6 billion increase in average HFI loan balances. Average yield on interest earning assets decreased to 6.17% for the year ended December 31, 2024, compared to 6.22% for 2023, which was primarily the result of a lower yields on investment securities.

For the year ended December 31, 2024, interest expense was $1.9 billion, compared to $1.7 billion for the year ended December 31, 2023. Interest expense on deposits increased $457.6 million for the same period due to an $8.4 billion increase in average interest-bearing deposits, coupled with increasing rates. Deposit rates increased year-over-year due to increases in the federal funds target rate throughout 2023 that were not fully offset by reductions concentrated in the latter part of 2024. Interest expense on short-term borrowings decreased $218.3 million for the year ended December 31, 2024 compared to the same period in 2023 as a result of a decrease of $3.9 billion in the average balance. 

For the year ended December 31, 2024, net interest income was $2.6 billion, compared to $2.3 billion for the year ended December 31, 2023. The increase in net interest income was driven by an $8.9 billion increase in average interest earning assets, partially offset by an increase of $4.5 billion in average interest-bearing liabilities. The decrease in net interest margin of 5 basis points compared to 2023 is the result of higher funding costs on deposits and borrowings, coupled with lower asset yields during 2024.

42

Provision for Credit Losses

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit