Western Alliance Bancorporation (WAL) risk factors, 2025 10-K

Market and Economic Risks

1. 01Our financial performance may be adversely affected by conditions in the financial markets, adverse developments or concerns affecting the financial services industry generally or financial institutions that are similar to us or may be viewed as being similar to us, and economic conditions generally
2. 02Most of our assets and liabilities reprice with changes in interest rates, which subjects us to significant risks from changes in interest rates and can impact our net interest income, mortgage banking revenues, the valuation of our assets and liabilities, and our ability to effectively manage interest rate risk
3. 03The discontinuation of, or substantial change to, an interest rate benchmark we use in lending, borrowing or hedging may adversely affect our business
4. 04Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI
5. 05Due to the inherent risk associated with accounting estimates, our ACL may be insufficient, which could require us to raise additional capital or otherwise adversely affect our financial condition and results of operations
6. 06A protracted shutdown of the United States government may result in reduced loan originations and other adverse effects that could negatively affect our financial condition and results of operations
7. 07The markets in which we operate are subject to the risk of both natural and man-made disasters
8. 08Climate change, societal responses and legislative and regulatory initiatives with respect to climate change could materially affect our business and performance, including indirectly through impacts on our customers and vendors
9. 09Evolving scrutiny and expectations from customers, regulators, investors, and other stakeholders with respect to ESG practices may impose additional costs on the Company or expose it to new or additional risks
10. 10We are highly dependent on real estate and events negatively impacting the real estate market will hurt our business and earnings
11. 11Our loan portfolio contains concentrations in certain business lines or product types that have unique risk characteristics and may expose us to increased lending risks
12. 12Our credit linked notes do not ensure full protection against credit losses, and as such we could still incur significant credit losses on loans for which risk of loss has been transferred pursuant to these transactions

Strategic Risks

1. 13Our future success depends on our ability to compete effectively in a highly competitive and rapidly evolving market
2. 14Our expansion strategy may not prove to be successful and our market value and profitability may suffer
3. 15There are substantial risks and uncertainties associated with the introduction or expansion of lines of business or new products and services within existing lines of business
4. 16We are continuing to pursue digital payments initiatives which are subject to significant uncertainty and could adversely affect our business, reputation, or financial results
5. 17Our success is dependent upon our ability to recruit and retain qualified employees, including members of our leadership and management teams
6. 18We could be harmed if our succession planning is inadequate to mitigate the loss of key members of our senior management team
7. 19We are subject to capital adequacy standards and liquidity rules, and a failure to meet these standards could adversely affect our financial condition
8. 20If we lose a significant portion of our core deposits, whether through a significant deposit relationship or concentrations in an industry, or our cost of funding deposits increases significantly, our liquidity and/or profitability would be adversely impacted
9. 21We may be required to repurchase mortgage loans or indemnify investors under certain circumstances
10. 22We utilize borrowings from the FHLB and the FRB, and there can be no assurance these programs will be available as needed
11. 23A change in our creditworthiness could increase our cost of funding or adversely affect our liquidity

Operational and Technological Risks

1. 24We rely on third parties to provide key components of our business infrastructure
2. 25Our business may be adversely affected by fraud
3. 26Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the persistence and increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud
4. 27Our risk management practices may prove to be inadequate or ineffective, which could result in unexpected losses or other material adverse impacts
5. 28Our internal controls and procedures may fail or be circumvented and the accuracy of judgments and estimates about financial and accounting matters may impact operating results and financial condition
6. 29If we are unable to understand and adapt to technological change and implement new technology-driven products and services, our business could be adversely affected

Legal and Compliance Risks

1. 30We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation, and accounting principles, or changes in them, or our failure to comply with them, may adversely affect us
2. 31The financial services industry and broader economy may be subject to new or changing legislation, regulation and government policy
3. 32State and federal banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations may adversely affect us
4. 33government-sponsored agency approvals required to conduct its business and is subject to periodic examinations by such state and federal agencies, which can result in increases in administrative costs, substantial penalties due to compliance errors, or the loss of licenses
5. 34Current and proposed regulations addressing consumer privacy and data use and security could increase our costs and impact our reputation
6. 35We could be subject to adverse changes or interpretations of tax laws, tax audits, or challenges to our tax positions
7. 36The price of our common stock may fluctuate significantly in the future, which could result in losses to our investors and litigation against us
8. 37There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock or depositary shares representing preferred stock
9. 38There can be no assurance that we will continue to declare cash dividends or repurchase stock as we have in the past
10. 39Offerings of debt, which would be senior to our common stock upon liquidation, and/or preferred equity securities that may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock
11. 40Anti-takeover provisions could negatively impact our stockholders