Company: WAL-PA
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001628280-25-047883
Chunk: 113

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 113
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 The decrease in the effective tax rate for the three and nine month periods ended September 30, 2025 compared to the same periods in 2024 was primarily due to an increase in investment tax credit benefits and a decrease in state taxes.As of September 30, 2025, the net DTA balance totaled $341 million, an increase of $60 million from $281 million at December 31, 2024. The overall increase in the net DTA was primarily the result of an increase in credit carryovers, partially  offset by an increase in the MSR DTL. Although realization is not assured, the Company believes realization of the recognized net DTA of $341 million at September 30, 2025 is more-likely-than-not based on expectations regarding future taxable income and based on available tax planning strategies that could be implemented if necessary to prevent a carryover from expiring.At September 30, 2025 and December 31, 2024, the Company had no deferred tax valuation allowance.LIHTC and renewable energy projectsThe Company holds ownership interests in limited partnerships and limited liability companies that invest in affordable housing and renewable energy projects. These investments are designed to generate a return primarily through the realization of federal tax credits and deductions. Investments in LIHTC and renewable energy totaled $571 million and $606 million as of September 30, 2025 and December 31, 2024, respectively. Unfunded LIHTC and renewable energy obligations are included in Other liabilities on the Consolidated Balance Sheet and totaled $242 million and $320 million as of September 30, 2025 and December 31, 2024, respectively. 

The Company recognized tax credits related to LIHTC investments of $24.7 million and $21.0 million during the three months ended September 30, 2025 and 2024, respectively, and $64.4 million and $59.7 million during the nine months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025 and 2024, amortization related to LIHTC investments of $21.2 million and $19.6 million, respectively, was recognized as a component of income tax expense, compared to $55.3 million for the nine months ended September 30, 2025 and 2024.

15. COMMITMENTS AND CONTINGENCIES Unfunded Commitments and Letters of CreditThe Company is party to financial