Weekly Issue #13
Western Alliance (WAL) — $75.55 at Friday’s close
Western Alliance is a Phoenix bank that has made money in every one of the last eleven years. That includes 2023. When Silicon Valley Bank failed that March, depositors ran from banks that looked like it, and Western Alliance shares fell from $71.56 to $26.12 in three trading days. The bank still earned a profit in every quarter of that year, and it never cut its dividend. On October 30 it raised the dividend to $0.46 a quarter.
Last quarter it earned $2.45 a share, up 7.5% from a year earlier, on $81.8 billion of deposits, and bought back $92 million of its own stock. At Friday’s close of $75.55 it cost 8.3 times its last four quarters of earnings ($9.05 a share) and 1.21 times its tangible book value of $62.22 a share.
Buyers of whole banks have paid more. PNC paid about 2.3 times tangible book for Colorado’s FirstBank in 2025, the priciest US bank deal of the year at the time by S&P Global’s count, and two large bank deals announced in October 2025 were reported at about 1.7 times. At 1.7 times, Western Alliance’s tangible book comes to about $106 a share. Those were prices for whole banks, which usually carry a takeover premium, and nobody has reported a bid for this one. They show what buyers have paid for regional banks lately.
It came through the 2023 bank run with a profit in every quarter and its dividend intact.
Why it fell
The stock is 21% below its February 9 close of $96.08. The regional bank fund (KRE) is down 1.7% over the same stretch, so most of this is about Western Alliance itself, and two problem loans in particular.
In October 2025, on a day another bank’s loan troubles pulled the whole group down, Western Alliance described its own lawsuit against a borrower, Cantor Group V, alleging fraud on a credit line backed by property loans. The fund fell 6.2% that day and Western Alliance 10.8%. In March came the bigger one, a loan backed by receivables from First Brands, the bankrupt auto parts maker. The bank said Jefferies had told it the last payments under a repayment deal would not be made. Western Alliance wrote off $126.4 million and sued Jefferies and its Leucadia unit, alleging breach of contract and fraud. The shares fell 8.5% that day, against 2.5% for the fund, and bottomed at $66.70 on March 18.
Together the two write-offs come to $152.5 million before tax, about 2.3% of the bank’s tangible common equity. It still earned $9.05 a share over the last four quarters.
Midterm week
In Tuesday’s vote Democrats won the House and at least 54 Senate seats, which leaves a Republican president facing a Democratic Congress. The next day the regional bank fund rose 1.7% and Western Alliance 3.2%, to $79.24. Oil also fell sharply that day on hopes of an end to the Iran war, so the vote was one of two things moving markets. On Thursday the S&P 500 fell about 4.4%, and Western Alliance gave the gain back. It closed Friday at $75.55, a little below where it closed on election day ($76.77).
Nothing in the bank’s business changed on any of those days. It was on my shortlist on Monday, the day before the vote, and I chose it on Friday, after the week’s other earnings reports. The result gave me no reason to take it off.
A split government changes less for a bank like this than the headlines suggest. Most of the rules a bank lives under come from the Federal Reserve, the FDIC and the Comptroller of the Currency, whose leaders the president nominates and the Senate confirms. A new banking law needs the House, the Senate and the president’s signature, or two-thirds of both chambers to override a veto. What changes in January is oversight: Democrats take the chair of the Senate Banking Committee, which holds the hearings and votes first on new regulators. My reading is tougher hearings, and no rewrite of the rulebook before the president’s term ends in January 2029.
What happened last time
This bank has already been through a bank run. Its deposits fell 11.3% in the first quarter of 2023, from $53.6 billion to $47.6 billion. By December they were $55.3 billion, more than before the run. The shares bottomed at $18.20 on May 4, 2023, and closed back above their pre-crisis price in July 2024. The dividend held at $0.36 a quarter through the run.
That is one test, passed once, and it proves nothing about the next one. It does show what this bank did when it was hit hardest.
Western Alliance (WAL) — $75.55 at the Nov 6 close, down 10% this year
| The check | Reading | Verdict |
|---|---|---|
| Price to earnings | 8.3× | ✓ Last four quarters ($9.05 a share); Ben Graham’s limit is 15 |
| Price to tangible book | 1.21× | ✓ Book value less goodwill, $62.22 a share; 2025 bank takeovers were reported at 1.7× to 2.3× |
| Price to book | 1.11× | ✓ Under Graham’s 1.5 |
| Return on tangible equity | 15.5% | ✓ Third quarter, yearly rate; profit on equity less goodwill (the bank’s measure) |
| Profitable years | 11 of 11 | ✓ 2015 to 2025, including every quarter of 2023 |
| Dividend | 2.4% | ✓ $0.46 a quarter from November; never cut since it began in 2019 |
| Nonaccrual loans | 0.79% | ✓ Loans no longer paying interest, as a share of loans; 0.92% a year earlier |
| Loans written off, now in court | $152.5M | ⚠ Two cases; the bank alleges fraud in both |
| Office loans | $2.3B | ⚠ 3.7% of loans; $165M of foreclosed property, mostly offices |
Price ratios at the Nov 6 close, earnings over the last four quarters, balance sheet at September 30. The Western Alliance page on Travis Valuation → averages its value methods at $111.12, using only methods that assume no growth; the price is 32% below it. Its bank lens, which prices book value at the bank’s five-year average return on equity of 17.1%, puts fair value at $135.01; at the last year’s lower return, about 13%, the same formula gives about $100. The page reads the 2025 annual report ($8.73 a share of earnings, below the last four quarters’ $9.05).
The catch
Both losses came from loans to other finance companies, disclosed five months apart. A bank that has found two of those in a year can find a third. It also holds $2.3 billion of office loans, $387 million of them due before the end of this year, and it has taken back $165 million of property, most of it offices. Its tangible equity is 6.9% of tangible assets, down from 7.1% a year ago as assets grew faster than equity. For the case here to work, the next loss has to stay small.
What I can’t know
What the courts decide. Both lawsuits are open, and the bank books nothing until it collects.
Whether the losses are done. Write-offs across all its loans ran at 0.30% a year last quarter, up from 0.22% a year earlier; the CEO called it the middle of the bank’s own 2026 range. Office property is the slower risk.
What the fourth quarter shows. The report is due in January; the date has not been set.
Skin in the game
I do not own Western Alliance, and I will not buy any until after this letter has gone out. No Western Alliance insider has bought shares on the open market in the past twelve months. The largest sale was a vice chair’s 40,000 shares at about $81 to $83 in June.
Buffett has often repeated Ben Graham’s point that in the short run the market is a voting machine, and in the long run a weighing machine. This week it voted twice. The weighing is in the filings.
A correction to Issue #3: Stifel
Stifel split its shares 3-for-2 on February 27, 2026. Issue #3 (August 30) put Stifel at 8.9 times earnings and 1.4 times book. Those two figures were worked from per-share numbers from before the split, set against the price after it. At the August 28 close of $81.29, on GAAP earnings over the four quarters to June 30 ($5.58 a share after the split) and common book value ($35.15 a share), they should have read about 14.6 times earnings and 2.3 times book. The 16% return on equity, the dividend and the yield were right. The archived letter now carries this correction.
Stifel closed Friday at $71.35, about 12.4 times its latest four quarters of earnings and 2.0 times book. In its third quarter, reported October 21, adjusted earnings rose to $1.46 a share while revenue from its trading and investment banking group fell 14%.
Which account?
Western Alliance pays $0.46 a share a quarter from November, $1.84 a year, about a 2.4% yield. As a US dividend it carries 15% US withholding under the Canada-US treaty, about 28 cents a share a year, if your broker has a W-8BEN form on file for you. It does not apply inside an RRSP. In a non-registered account you can claim it back as a foreign tax credit. In a TFSA it is lost. At this yield the RRSP keeps the most of the dividend. A gain on the shares is tax-free in a TFSA, and in a non-registered account only half of it is taxable. General information, not tax advice.
The workfile
Everything above is the short version. The workfile has the price path date by date, what the 2023 run did to deposits and earnings, eleven years of earnings, the dividend record, every valuation method on one page, both lawsuits as the filings describe them, the office loans, and the source for each figure. It’s in this week’s workfile →
Your turn 👇
Which stock should we run through the checks next? Hit reply with a ticker.
Send me your pick →Curtis Travis, B.Comm, AACI (retired), is the founder of Travis Valuation. He does not own Western Alliance, the subject of this issue. He owns shares of VICI Properties, Lennar, Amazon, Walmart, Costco, TD, Scotiabank, Dick’s, Berkshire Hathaway and OMAB, all named in past issues. Prices, ratios and earnings are as of the Nov 6, 2026 close or the latest filing, from market data and Western Alliance’s and Stifel’s own SEC filings; the two valuation figures are from the Western Alliance page on Travis Valuation. Bank takeover multiples are as reported by S&P Global Market Intelligence and the press. Election results are as reported by CBS News and others. Prices move. Informational only — not a recommendation, and not tax advice. Do your own diligence.