What’s in your wallet, Western Alliance (NYSE: WAL) stock falls after $126M loan non-payment

Western Alliance Bancorporation (NYSE: WAL) shares fell 6% Friday after the bank announced a $126.4 million charge-off on a trade finance loan following a counterparty’s failure to meet payment obligations.

The Phoenix-based bank said Jefferies Financial Group notified it that payments owed under a forbearance agreement would not be paid as agreed. Western Alliance filed a complaint Friday morning in New York Supreme Court against Jefferies, Leucadia Asset Management and affiliates, alleging breach of contract and fraud related to a commercial loan collateralized by accounts receivable purchased from First Brands Group.

The bank entered into a forbearance agreement in October 2025 after learning that LAM’s servicer allowed UCC financing statements to lapse on the receivables, triggering loan defaults. Under the agreement, defendants agreed to complete full prepayment by March 31, 2026. The bank received payments through January 15, 2026, when it collected $42.125 million, but was recently informed the final two payments due in the first quarter would not be made.

Western Alliance said it plans to offset the charge-off impact through $50 million in securities gains, of which approximately $45 million have been realized quarter-to-date, and $50 million in expense reductions. The company said these mitigating actions should provide an aggregate offset of $100 million.