Company: WAL-PA
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001628280-25-047883
Chunk: 298

Company: WESTERN ALLIANCE BANCORPORATION
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 8
Chunk 298
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7.0 $1,559.5 $1,506.0 $53.5 

Total non-interest expense for the three months ended September 30, 2025 increased by $7.0 million compared to the same period in 2024, primarily due to higher salaries and employee benefits, other non-interest expense, and data processing costs. Salaries and employee benefits rose by $35.7 million, reflecting increases in average salary and headcount. Other non-interest expense grew by $9.6 million, largely driven by increased costs from operating OREO properties. Data processing costs were up $9.4 million attributable to higher software licensing fees and associated depreciation. These increases were partially offset by a reduction in deposit costs of $32.9 million resulting from lower ECR rates as well as a decrease in insurance expense of $10.9 million, due to lower FDIC assessment fees following a decline in brokered deposit levels.

Total non-interest expense for the nine months ended September 30, 2025 increased by $53.5 million compared to the same period in 2024, mainly due to higher salaries and employee benefits, data processing costs, and other non-interest expense, as discussed in the preceding paragraph. These increases were partially offset by decreases in deposit costs and insurance expense. Lower ECR rates drove the $59.4 million decrease in deposit costs, while insurance costs decreased $28.3 million due to a reduction in brokered deposit levels and an adjustment to the FDIC special assessment loss estimate that resulted in a charge of $9.4 million recognized during the nine months ended September 30, 2024.

Income Taxes

The Company's effective tax rate was 17.0% and 20.7% for the three months ended September 30, 2025 and 2024, respectively, and 18.1% and 22.0% for the nine months ended September 30, 2025 and 2024, respectively. 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.

71

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