Should Investors Worry About Regional Banks After One Firm Dumped 1.8 Million Western Alliance Shares?
Key Points
Vaughan Nelson sold 1,788,953 shares of Western Alliance Bancorporation with an estimated trade value of about $145.27 million (based on quarterly average price).
The transaction represented 1.42% of 13F reportable assets under management (AUM).
The fund still holds 405,677 shares, but it is no longer a top-five position.
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On Jan. 15, 2026, Vaughan Nelson Investment Management, L.P. disclosed a sale of 1,788,953 Western Alliance Bancorporation (NYSE:WAL) shares, an estimated $145.27 million trade based on quarterly average pricing.
What happened
According to a Securities and Exchange Commission (SEC) filing released Jan. 15, 2026, Vaughan Nelson Investment Management, L.P. reduced its stake in Western Alliance Bancorporation by 1,788,953 shares. The estimated transaction value was $145.27 million, based on the average unadjusted closing price during the quarter. As a result, the fund's quarter-end position value dropped by $156.2 million, reflecting both the share sale and price movement.
What else to know
- This was a sale, reducing the position to 0.33% of the fund’s 13F AUM; previously, the stake accounted for 1.7% of AUM in the prior quarter.
- Top holdings after the filing:
- NASDAQ:GOOGL: $304 million (3.0% of AUM)
- NASDAQ:NVDA: $293 million (2.9% of AUM)
- NASDAQ:AMZN: $265 million (2.6% of AUM)
- NYSE:LLY: $247 million (2.4% of AUM)
- NASDAQ:MSFT: $238 million (2.3% of AUM)
As of Jan. 14, 2026, shares were priced at $88.32, up 5.7% over the past year.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $3.4 billion |
| Net income (TTM) | $914.3 million |
| Dividend yield | 1.73% |
| Price (as of market close 2026-01-14) | $88.32 |
Company Snapshot
- Western Alliance offers a broad suite of commercial and consumer banking products, including deposit accounts, commercial and industrial loans, commercial real estate financing, construction lending, and treasury management services.
- It provides lending activities, treasury management, mortgage products, and cash management solutions among its services.
- The company serves middle-market businesses, commercial real estate developers, and individual consumers, with a geographic focus on Arizona, California, and Nevada.
Western Alliance Bancorporation is a leading regional bank holding company with a diversified portfolio of lending and deposit products. The company leverages its strong presence in key western U.S. markets to serve commercial and consumer clients through 36 branch locations and specialized loan production offices.
What this transaction means for investors
There are several concerns surrounding regional banks, including the future interest rate environment. But there is also optimism surrounding anticipated 2026 results. Investors, therefore, may be wondering why investment manager Vaughan Nelson slashed its Western Alliance holdings by more than 80%.
Western Alliance doesn't report its fourth-quarter results until Jan. 26. Other regional banks have already reported, however, and several have shown meaningful, sustainable strength.
Examples include Bank of New York Mellon reporting 28% year-over-year earnings per share growth and M&T Bank achieving record net income in 2025. It's possible Vaughan Nelson has specific concerns with Western Alliance. It's quality of assets seems to be improving, though, with the ratio of nonperforming loans and repossessed assets to total assets declining in Q3.
The bank focuses on the western and southwestern regions of the U.S., and the investment manager may have concerns with that region. Vaughan Nelson holds several other large and mid-cap banks in its portfolio, and the reported sale may also just be portfolio management.
A takeaway for investors is to maintain a diversified portfolio. Even if one specific company falters, the portfolio can continue to perform well. In general, the banking sector looks to be in a good position heading into 2026. Holding some in one's portfolio makes sense, especially with income-producing dividends as well.
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Howard Smith has positions in Alphabet, Amazon, Microsoft, and Nvidia and has the following options: short February 2026 $170 calls on Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Western Alliance Bancorporation and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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