(Reuters) -Western Alliance Bancorp on Tuesday posted profits that surpassed estimates and said its deposits stabilized after the March banking crisis, news that sent its shares soaring 15% in after-hours trading and also lifted shares of other U.S. regional banks.
The lender said its total deposits fell 11.3% to $47.6 billion in the first quarter from the previous three months, but deposits steadied late in the quarter, growing $2 billion from March 31 to April 14.
“While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized,” said CEO Kenneth Vecchione in a statement.
The company said some 73% of its deposits were insured and immediately available liquidity exceeds uninsured deposits, it said. Its proportion of insured deposits was well above industry norms among the 50 largest U.S. banks.
Western Alliance and other regional lenders came under pressure recently, with consumers moving money into bigger banks after the failure of two U.S. lenders triggered worries about a broader crisis and funding costs.
Last month, Western Alliance affirmed its full-year deposit growth forecast of 13% to 17%.
Western Alliance’s stock surged more than 15% after the closing bell. Among other regional banks that have been hammered in recent weeks, PacWest Bancorp shares surged 9% and Zions Bancorporation, First Republic Bank and Comerica Inc each rallied around 3%.
Net interest income for Western Alliance rose 36% from a year earlier to $609.9 million in the quarter ended March 31, following the footsteps of U.S. banking heavyweights who also reaped windfalls from higher interest payments in the first three months of the year.
Still, the lender reported a 5% decline in net interest income from the previous quarter due to an increase in average balances of short-term borrowings and interest bearing deposits.
A worsening economy also prompted the lender to stockpile $19 million in rainy-day funds this quarter, up sharply from $9 million a year ago.
The lender also reported an adjusted profit of $2.30 per share in the quarter, comfortably above analysts’ average estimate of $2.04, according to Refinitiv data.
(Reporting by Mehnaz Yasmin in Bengaluru and Nupur Anand in New York; Additionalreporting by Noel Randewich in San Franciso; Editing by Krishna Chandra Eluri, Lananh Nguyen and David Gregorio)
