WAL Q1 earnings drop

What happened: In Q1 2023, Western Alliance Bancorporation (WAL) reported a decline in income, with earnings dropping to $178.9 million, or $1.65 per share, compared to $195.9 million, or $1.79 per share, in the same period last year. Meanwhile, First Western Financial Inc (MYFW) saw an increase in earnings, totaling $6.21 million, or $0.63 per share, up from $4.18 million, or $0.43 per share, in Q1 2022.

Market impact: This divergence in earnings performance could impact investor sentiment towards regional banks, with WAL's results potentially leading to valuation repricing, while MYFW's growth might attract investors seeking positive earnings momentum. The banking sector's performance may be affected, with investors closely watching other regional banks' earnings to gauge the broader trend.

What to watch next: Investors should look out for Q1 earnings from other regional banks, starting with KeyCorp (KEY) on April 18 and Comerica Inc (CMA) on April 19. Additionally, the Federal Reserve's interest rate decision on May 3 will provide insights into the central bank's stance, which could influence banks' net interest margins and overall earnings trajectory.