Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2018 Earnings Presentation
17 slides from Western Alliance Bancorporation's earnings presentation, Oct 18, 2018
Slide 1: Earnings Call 3rd Quarter 2018
EARNINGS CALL 3rd QUARTER 2018 October 19, 2018
Slide 2: 3rd Quarter 2018 Financial Highlights
3rd Quarter 2018 | Financial Highlights • Net income of $111.1 million ($1.05 per share), compared to $104.7 million ($0.99 per share) for Q2 2018, and $82.8 million ($0.79 per share) for Q3 2017 • Effective tax rate of 6.32%, compared to 19.48% for Q2 2018, as management re-assessed its tax plannin
Slide 3: Adjusted Consolidated Financial Results
Adjusted Consolidated Financial Results $ in millions, except EPS Q3-18 Non-GAAP Non-recurring and non-operating items As Reported Adjustments As Adjusted during the quarter include the following: Net Interest Income $ 234.0 $ — $ 234.0 (1) Changes related to the Company's Operating Non-Interest Inc
Slide 4: Quarterly Consolidated Financial Results
Quarterly Consolidated Financial Results $ in millions, except EPS Q3-18 Q3 2018 Highlights As Adjusted Q2-18 Q3-17 • Net Interest Income increased Net Interest Income $ 234.0 $ 224.1 $ 201.6 $9.9 million as a result of loan Operating Non-Interest Income 12.9 14.1 10.1 growth, partially offset by hi
Slide 5: Net Interest Drivers
Net Interest Drivers $ in billions, unless otherwise indicated Total Investments and Yield Loans and Yield Q3 2018 Highlights • Loan yield increased 9 basis 5.90% 5.81% points due to rising interest rates 5.68% 5.72% 5.59% across most loan types © 3.23% 3.24% 5.62% • Cost of interest-bearing deposit
Slide 6: Net Interest Income and Accretion
Net Interest Income and Accretion $ in millions Net Interest Income, NIM, and Q3 2018 Highlights Average Interest Earnings Assets • NIM increased 2 basis points to 4.72% quarter-over-quarter $234.0 due to favorable impacts of rising short-term interest rates $214.2 $224.1 for securities and loans, p
Slide 7: Operating Expenses and Efficiency
Operating Expenses and Efficiency $ in millions Operating Expenses and Efficiency Ratio Q3 2018 Highlights • The operating efficiency ratio decreased from 42.1% in © 42.7% 42.1% 41.0% 41.7% 41.5% Q2 2018 to 41.5% as revenue growth outpaced expense growth 40.0% 40.7% • Operating expenses increased fr
Slide 8: Operating Pre-Provision Net Revenue, Net Income, and ROA
Operating Pre-Provision Net Revenue, Net Income, and ROA $ in millions Operating Pre-Provision Net Revenue and Operating PPNR ROA Net Income and ROA 2.64% 2.57% 2.61% 2.53% 2.51% 2.07% 1.99% 2.02% 1.79% 1.71% $141.9 $135.5 $122.7 $127.8 $127.6 $111.1 $100.9 $104.7 $89.3 $82.8 Q3-17 Q4-17 Q1-18 Q2-18
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet $ in millions Q3-18 Q2-18 Q3-17 Q3 2018 Highlights Investments & Cash $ 4,334 $ 4,196 $ 4,424 • Loans increased $595 million Loans 16,733 16,138 14,522 (3.7%) over prior quarter and $2.21 billion (15.2%) over prior year Allowance for Credit Losses (150) (147) (136) • Depos
Slide 10: Quarter Loan Growth and Portfolio Composition
5 Quarter Loan Growth and Portfolio Composition $ in millions $2.21 Billion Year Over Year Growth Highlights $14,522 $15,094 $15,560 $16,138 $16,733 Quarter-over-quarter loan growth +532 +572 +466 +578 +595 driven by (in millions): Residential & Consumer $ 296 $896 5.4% C&I 209 $600 $469 Constructio
Slide 11: Quarter Deposit Growth and Composition
5 Quarter Deposit Growth and Composition $ in millions $2.00 Billion Year Over Year Growth Highlights $16,905 $16,973 $17,355 $18,088 $18,909 Quarter-over-quarter deposit growth +874 +68 +382 +733 +821 driven by (in millions): Savings and MMDA $ 590 $1,857 9.8% Interest Bearing DDA 114 $1,806 $1,590
Slide 12: Adversely Graded Loans and Non-Performing Assets
Adversely Graded Loans and Non-Performing Assets * $ in millions $406 $379 $368 $355 $358 $200 $150 $124 $155 $185 Adversely Graded 2.12% Loans 1.85% 1.92% 1.83% 1.70% $122 $177 $128 $127 $156 $55 $44 0.42% 0.36% 0.33% NPAs $37 $34 $37 0.29% 0.26% $29 $28 $30 $28 $20 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q3
Slide 13: Charge-Offs, Recoveries, ALLL, and Provision
Charge-Offs, Recoveries, ALLL, and Provision $ in millions Gross Charge-Offs, Recoveries and Rate ALLL and ALLL to Organic Loans Ratio $145 $147 $150 $136 $140 $4.8 $3.2 $2.3 $3.6 $3.9 1.06% 1.03% 1.02% $(2.8) $(2.2) 0.99% 0.97% $(0.9) $(1.3) $(1.7) Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q3-17 Q4-17 Q1-18 Q2
Slide 14: Capital
Capital Capital Ratios ROTCE and TBV/Share 20.5% 20.4% 20.6% 13.5% 13.3% 13.3% 13.4% 18.8% 13.2% 18.2% 11.0% 10.8% 10.5% $20.70 10.4% 10.4% 10.9% 10.7% $19.78 10.5% $18.86 10.1% 10.3% $18.31 10.0% $17.53 9.8% 9.9% 9.6% 9.4% Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Total Capital Co
Slide 15: Management Outlook
Management Outlook • Financial Position • Margin • Operating Leverage • Asset Quality 15 15
Slide 16: Questions and Answers
Questions and Answers Western Alliance Bancorporation’
Slide 17: Forward-Looking Statements
Forward-Looking Statements 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 stateme
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