Benzinga - Western Alliance Bancorp (NYSE: WAL) eased investor concerns Wednesday, stating that its deposit balances fell by 11% in the first quarter of 2023, a smaller drop than some analysts had predicted.
The news comes after investors pulled back when the bank issued a statement Tuesday sans the deposit figure.
The bank stated that deposit balances have increased since the first quarter.
The stock was trading down 12.35% late in Wednesday's session.
What do WAL analysts think? Check it out here.
The decline in deposits followed the collapses of Silicon Valley Bank and Signature Bank last month, which led to a panic and deposit outflows for regional banks. Western Alliance said its net outflows have fallen significantly, and deposit balances have returned to normal levels as of March 17.
The bank has also saw a $1.2-billion increase in deposits this month, providing reassurance for investors who had become anxious about similar balance sheet issues and a potential mismatch between long-dated assets and short-dated liabilities.
While Western Alliance did not disclose the exact number of deposits that left the bank during the crisis triggered by the failures of Silicon Valley Bank and Signature Bank, investors are now focusing on the fact that the bank is less dependent on funding from uninsured depositors, who are considered a greater flight risk during periods of uncertainty.
Benzinga's Take: As nervous investors look for new signs of stress, banks like Western Alliance will need to continue to demonstrate stability and reassure investors that they can weather any future storms.
WAL Price Action: Shares of Western Alliance are trading 12.85% lower to $29.22 Wednesday afternoon, according to data from Benzinga Pro.
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