Western Alliance stock price drops after announcing $126 million loan write-off

LootboxPhobia · 2026-03-06T17:21:03+00:00

Western Alliance Bancorporation's stock price dropped 6% after announcing a write-down of $126.4 million in trade finance loans. The bank sued companies like Jefferies, accusing them of default and fraud related to collateralized commercial loans. Western Alliance plans to offset the losses through securities gains and expense reductions, expecting capital levels to remain stable.

LootboxPhobia

2026-03-06 17:21:03

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Investing.com – Western Alliance Bancorporation (NYSE:WAL) stock fell 6% on Friday after the bank announced a $126.4 million write-down on a trade finance loan due to a counterparty’s failure to fulfill payment obligations.

The Phoenix-based bank stated that Jefferies Financial Group informed it that payments due under the waiver agreement would not be made as scheduled. Western Alliance filed a lawsuit on Friday morning in the New York State Supreme Court against Jefferies, Leucadia Asset Management, and their affiliates, accusing them of breach of contract and fraud related to a commercial loan secured by accounts receivable purchased from First Brands Group.

The bank entered into a waiver agreement in October 2025 after learning that LAM’s service provider allowed the UCC financing statement on the receivables to lapse, triggering a default on the loan. Under the agreement, the defendants agreed to complete full prepayment by March 31, 2026. The bank received payments totaling $42.125 million as of January 15, 2026, but was recently informed that the last two payments due in the first quarter would not be made.

Western Alliance stated it plans to offset the impact of the write-down with $50 million in securities gains, of which approximately $45 million has been realized this quarter, along with $50 million in cost reductions. The company said these measures should provide a total offset of $100 million.

The bank reported that after the write-down and deducting securities gains realized so far this year, its CET1 ratio would only decrease by 7 basis points from 11.0% at the end of 2025. Western Alliance expects to continue delivering another profitable quarter with stable capital levels.

As of March 5, 2026, the bank reported that approximately 75% of total collateral was insured and mortgaged, with $21.5 billion in high-quality unencumbered assets and $20 billion in off-balance-sheet borrowing capacity.

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