Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q4 2021 Earnings Presentation
19 slides from Western Alliance Bancorporation's earnings presentation, Jan 27, 2022
Slide 1: Earnings Call 4th Quarter 2021
EARNINGS CALL 4th Quarter 2021 JANUARY 28, 2022
Slide 2: 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 statemen
Slide 3: 4th Quarter 2021 Financial Highlights
4th Quarter 2021 | Financial Highlights Earnings & Profitability Q4-21 Q3-21 Q4-20 Net Income $246.0 $236.9 $193.6 Net Revenue $561.0 $548.5 $338.6 Pre Provision Net Revenue1 $325.9 $317.1 $206.4 EPS – Adjusted1 $2.34 $2.30 $1.93 Net Interest Margin 3.33% 3.43% 3.84% Efficiency Ratio1 41.3% 41.5% 38
Slide 4: Quarterly Income Statement
Quarterly Income Statement Net Interest Income increased $40.2 million, primarily from interest income on loan growth, including Loans HFS Non-Interest Income decreased $27.7 million, driven by decrease in Mortgage Banking Related Income • $18.3 billion loan production in Q4 (53% purchase / 47% refi
Slide 5: Annual Consolidated Financial Results
Annual Consolidated Financial Results Net Interest Income increased $381.9 million, primarily from interest income on loan growth, including Loans HFS, partially offset by increased interest expense from Subordinated Debt and Credit Linked Note issuances during the year Non-Interest Income increase
Slide 6: Net Interest Drivers
Total Investments and Yield Interest Bearing Deposits and Cost Loans and HFI Yield Deposits, Borrowings & Cost of Liability Funding Net Interest Drivers 6 • Loan yields decreased 25 bps following continued mix shift into residential loans and lower yields across most loan types • Yield on Loans Held
Slide 7: Net Interest Income and Net Interest Margin
$314.8 $317.3 $370.5 $410.4 $450.6 3.84% 3.37% 3.51% 3.43% 3.33%3.80% 3.29% 3.51% 3.40% 3.31% Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Net Interest Income 7 • Net Interest Income increased $40.2 million, or 9.8%, over prior quarter primarily due to growth in Loans, including Loans HFS • Average Earning Assets
Slide 8: Net Interest Income in a Rising Rate Environment
Net Interest Income in a Rising Rate Environment 8 Highlights Net Interest Income – Ramp Scenario on Growth Balance Sheet • WAL expects a 4.6% increase in NII under a 100bps rate shock on a static balance sheet • WAL proactively reduced asset sensitivity during the prior declining rate environment w
Slide 9: Expenses and Efficiency
Expenses and Efficiency1 9 • Efficiency ratio1 decreased 20 bps to 41.3% compared to the prior quarter and increased 310 bps from the same period last year • Improvement in efficiency ratio1 as net revenue growth outpaced expense growth • Excluding PPP net loan fees and interest, efficiency ratio1 w
Slide 10: Pre-Provision Net Revenue, Net Income, and ROA
Pre-Provision Net Revenue1, Net Income, and ROA 10 • PPNR1 increased $8.8 million from the prior quarter and $119.5 million, or 57.9%, from the same period last year • PPNR ROA1 decreased 21 bps from the prior quarter and 13 bps from the same period last year as balance sheet growth outpaced PPNR •
Slide 11: Consolidated Balance Sheet
Consolidated Balance Sheet Loans increased $4.3 billion, or 12.3%, over prior quarter and $12.0 billion, or 44.4%, over prior year Deposits increased $2.3 billion, or 5.1%, over prior quarter and $15.7 billion, or 49.1%, over prior year Borrowings increased $330 million over prior quarter from $275
Slide 12: Five Quarter Loan Growth and Composition
Five Quarter Loan Growth and Composition 12 $12.0 Billion Year-Over-Year Growth Quarter-over-quarter loan growth of $4.3 billion driven by (in millions): Residential & Consumer $1,838 C&I1 1,773 CRE, Non-OO 683 Construction & Land 79 Offset by decrease in: CRE, OO (99) Total $4,274 Year-over-year lo
Slide 13: Five Quarter Deposit Growth and Composition
$13.5 $17.5 $20.1 $21.1 $21.4 $4.4 $3.9 $4.2 $5.0 $6.9$12.4 $15.3 $15.8 $17.4 $17.3 $1.7 $1.7 $1.8 $1.8 $2.0 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 CDs Savings and MMDA Interest Bearing DDA Non-Interest Bearing DDA Five Quarter Deposit Growth and Composition 13 $15.7 Billion Year-Over-Year Growth Quarter-ove
Slide 14: Asset Quality
$451 $474 $405 $364 $331 1.67% 1.65% 1.35% 1.05% 0.85% Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 $2 $4 $4 $12 $12 $115 $114 $96 $78 $72 $107 $163 $138 $175 $216 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Asset Quality 14 • Total Classified Assets of $301 million (54 bps to Total Assets) increased $36 million in Q4 • Non-Per
Slide 15: Credit Losses and ACL Ratios
$5.7 $2.1 $2.3 $3.3 $3.9 ($1.8) ($0.7) ($2.2) ($0.3) ($2.5) $279 $247 $233 $247 $253 $37 $33 $31 $32 $37 $7 $9 $6 $5 $5 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Credit Losses and ACL Ratios 15 • Provision expense of $13.2 million, driven by strong loan growth • Total Loan ACL / Funded Loans decreased 6 bps to
Slide 16: Capital Accumulation
Capital Accumulation 16 Regulatory Capital Levels • Exceed “well-capitalized” levels and have rebounded from initial impact of the AmeriHome transaction • CET1 at 9.1% Tangible Common Equity / Tangible Assets1 • TCE / TA increased 40 bps from the prior quarter to 7.3% due to common stock issuances u
Slide 17: Tangible Book Value Growth
Tangible Book Value Growth 17 Tangible Book Value per Share1 • TBVPS increased $3.17 to $37.84 from prior quarter • Increased 9.1% quarter-over-quarter, non-annualized • Increased 22.5% year-over-year • 20.2% CAGR since year end 2015 • TBVPS has increased 3x that of peers over the last 6 years • Qua
Slide 18: Management Outlook
Management Outlook Balance Sheet Growth Net Interest Income Pre-Provision Net Revenue Capital and Liquidity 18
Slide 19: Questions & Answers
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