Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q4 2017 Earnings Presentation
17 slides from Western Alliance Bancorporation's earnings presentation, Jan 25, 2018
Slide 1: Earnings Call 4th Quarter 2017
Earnings Call 4th Quarter 2017 January 25, 2018
Slide 2: Financial Highlights
2 Financial Highlights ▪ Net income of $89.3 million ($0.85 per share), compared to $82.8 million ($0.79 per share) for Q3 2017, and $69.8 million ($0.67 per share) for Q4 2016 (inclusive of $0.03 in acquisition / restructure expense) ▪ Net interest margin of 4.73%, compared to 4.65% in Q3 2017, and
Slide 3: Quarterly Consolidated Financial Results
3 Quarterly Consolidated Financial Results $ in millions, except EPS Q4 2017 Compared to Q3 2017 ▪ Net Interest Income increased $9.4 million as a result of loan growth and an increase in investment securities ▪ Operating Non-Interest Expense increased $6.4 million primarily from increased incentive
Slide 4: Annual Consolidated Financial Results
4 Annual Consolidated Financial Results $ in millions, except EPS 2017 Highlights ▪ Net Interest Income increased $127.5 million, or 19.4%, commensurate with growth in loans of 14.3% and yield expansion as well as growth in deposits of 16.7% ▪ Growth in Net Operating Revenue of 18.4% outpaced growth
Slide 5: Net Interest Drivers
5 Net Interest Drivers $ in billions, unless otherwise indicated Interest Bearing Deposits and Cost of Funds Loans and Yield Deposits, Borrowings, and Cost of Liability Funding Q4 2017 Highlights ▪ Loan yield increased across most loan categories ▪ Cost of interest-bearing deposits increased four ba
Slide 6: Net Interest Income and Accretion
6 Net Interest Income and Accretion $ in millions Q4 2017 Compared to Q3 2017 ▪ NIM increased 8 basis points to 4.73% quarter-over- quarter due to higher yields on loans resulting from short-term interest rate increases Net Interest Income, NIM, and Average Interest Earnings Assets Acquired Loan Acc
Slide 7: Breakdown of Operating Expenses
7 Breakdown of Operating Expenses Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 $49.7 $51.6 $52.3 $52.7 $57.7 $10.4 $10.1 $10.5 $11.0 $10.2$12.1 $14.1 $12.9 $10.6 $11.6 $10.4 $12.6 $12.5 $14.7 $16.0 Operating Expenses and Efficiency $ in millions Q4 2017 Compared to Q3 2017 ▪ The operating efficiency ratio increase
Slide 8: Net Income and ROA
8 Net Income and ROA Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 $69.8 $73.3 $80.0 $82.8 $89.3 1.63% 1.69% 1.71% 1.71% 1.79% Operating Pre-Provision Net Revenue, Net Income, and ROA $ in millions Operating Pre-Provision Net Revenue and Operating PPNR ROA Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 $103.1 $100.9 $115.2 $122.7 $
Slide 9: Consolidated Balance Sheet
9 Consolidated Balance Sheet $ in millions ▪ Loans increased $572 million (3.9%) over prior quarter and $1.89 billion (14.3%) over prior year ▪ Deposits increased $68 million (0.4%) over prior quarter and $2.42 billion (16.6%) over prior year ▪ Shareholders' Equity increased $84 million over prior q
Slide 10: Quarter Loan Growth and Portfolio Composition
10 5 Quarter Loan Growth and Portfolio Composition $ in millions Highlights ▪ Quarter-over-quarter loan growth driven by: ◦ CRE, Non-OO $276 million ◦ CRE, OO $180 million ◦ C&I $103 million ▪ Year-over-year loan growth driven by: ◦ C&I $981 million ◦ CRE, Non-OO $360 million ◦ CRE, OO $213 million
Slide 11: 5 Quarter Deposit Growth and Composition
11 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 $5,633 $6,114 $6,859 $7,609 $7,434 $1,347 $1,449 $1,481 $1,406 $1,586 $6,121 $6,254 $6,104 $6,300 $6,331 $1,449 $1,539 $1,587 $1,590 $1,622 5 Quarter Deposit Growth and Composition $ in millions Highlights ▪ Quarter-over-quarter deposit growth driven by: ◦ Interest B
Slide 12: Adversely Graded Loans and Non-Performing Assets
12 Adversely Graded Assets to Total Assets NPAs to Total Assets Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 2.07% 2.25% 2.04% 2.12% 1.85% 0.51% 0.44% 0.32% 0.42% 0.36% OREO Non-Performing Loans Classified Accruing Loans Special Mention Loans Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 $48 $45 $31 $29 $28 $40 $34 $30 $55 $44 $1
Slide 13: Credit Discounts, Charge-Offs, Recoveries and ALLL
13 Credit Discounts (CD) and CD to Acquired Loans Ratio Gross Charge-Offs Recoveries Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Charge-Offs, Recoveries, ALLL, and Provision $ in millions Gross Charge-Offs, Recoveries and Rate Provision for Credit Losses Credit Discounts CD/Acquired Loans Q4-16 Q1-17 Q2-17 Q3-17
Slide 14: ROTCE and TBV/Share, Capital Ratios
14 ROTCE and TBV/ShareCapital Ratios ROTCE TBV/Share Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 17.6% 17.8% 18.4% 18.2% 18.8% $15.17 $15.86 $16.71 $17.53 $18.31 Capital Total Capital Common Equity Tier 1 Tier 1 Leverage Tangible Common Equity Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 13.2% 13.1% 13.3% 13.3% 13.2% 10.0% 10.0
Slide 15: Management Outlook
15 Management Outlook ▪ Financial Position ▪ Margin ▪ Operating Leverage ▪ Asset Quality ▪ Tax Rate 15
Slide 16: Questions & Answers
Western Alliance Bancorporation Questions & Answers
Slide 17: Forward-Looking Statements
17 Forward-Looking Statements 17 This presentation contains forward-looking statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Examples of forward-looking s
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