Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q2 2016 Earnings Presentation
18 slides from Western Alliance Bancorporation's earnings presentation, Jul 21, 2016
Slide 1: 2nd Quarter 2016 Earnings Call
2nd Quarter 2016 Earnings Call July 22, 2016
Slide 2: Financial Highlights
2 Financial Highlights ▪ Completed Hotel Franchise Finance (HFF) loan portfolio purchase on April 20, 2016, increasing total loans by $1.28 billion as of the acquisition date ▪ Net income of $61.6 million and earnings per share of $0.60, inclusive of $0.02 in acquisition / restructure expense, compa
Slide 3: Quarterly Consolidated Financial Results
3 Quarterly Consolidated Financial Results $ in millions, except EPS Q2 2016 HIGHLIGHTS ▪ Net Interest Income increased $18.0 million as a result of the inclusion of Hotel Franchise Finance ▪ Operating Non-Interest Income decreased $3.5 million (28.9%), primarily from a reduction in gain on sale of
Slide 4: Net Interest Drivers
4 Net Interest Drivers $ in billions Interest Bearing Deposits and Cost of Funds Loans and Yield Interest Earning Assets Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q2 2016 HIGHLIGHTS ▪ Loans increased $1.64 billion primarily due to Hotel Franchise Finance ($1.26 billion), causing a corresponding increase in yiel
Slide 5: Net Interest Income and Accretion
5 Net Interest Income and Accretion $ in millions Q2 2016 HIGHLIGHTS ▪ NIM increased 5 bps largely due to the addition of Hotel Franchise Finance ▪ NIM adjusted for acquired loan accretion was 4.41% for the quarter, compared to reported NIM of 4.63% Net Interest Income and NIM Acquired Loan Accretio
Slide 6: Operating Expenses and Efficiency
6 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $32.4 $43.7 $41.2 $44.9 $44.7 $7.2 $9.3 $9.8 $9.6 $10.2$7.3 $8.4 $10.5 $10.1 $11.6$7.7 $10.8 $11.3 $11.2 $11.3 Operating Expenses and Efficiency $ in millions Q2 2016 HIGHLIGHTS ▪ The Efficiency Ratio decreased to 43.0% as revenue growth outpaced expense growth ▪ Data
Slide 7: Operating Pre-Provision Net Revenue, Net Income, and ROA
7 Operating Pre-Provision Net Revenue, Net Income, and ROA $ in millions Operating Pre-Provision Net Revenue and ROA Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $59.7 $73.7 $79.9 $82.1 $94.5 2.14% 2.16% 2.28% 2.27% 2.37% Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $39.5 $55.9 $58.5 $61.3 $61.6 1.41% 1.64% 1.67% 1.70% 1.55% ▪ O
Slide 8: Consolidated Balance Sheet
8 Consolidated Balance Sheet $ in millions, except per share data ▪ Total Loans increased $1.64 billion (14.6%) over prior quarter and $2.52 billion (24.3%) over prior year with $1.26 billion attributable to Hotel Franchise Finance and the remainder due to organic growth ▪ Deposits increased $1.12 b
Slide 9: Loan Growth and Portfolio Composition
9 Loan Growth and Portfolio Composition $ in millions Q2 2016 HIGHLIGHTS ▪ Quarter-over-quarter loan growth driven by two loan categories: - CRE, Non-OO $1.31 billion (HFF $1.22 billion) - C&I $199 million - Construction & Land $154 million (HFF $42 million) ▪ Year-over-year loan growth driven by th
Slide 10: Ten Year Change in Geographic Loan Diversification
10 AZ: 18% CA: 39%NV: 15% Other: 28% AZ: 18% CA: 14% NV: 68% Ten Year Change in Geographic Loan Diversification 6/30/2006 6/30/2016 10 $2.77 BILLION $12.88 BILLION ▪ Although over the past 10 years, on a dollar basis, loans in Nevada have increased moderately, loan growth in other markets has reduce
Slide 11: Ten Year Change in Loan Product Diversification
11 Ten Year Change in Loan Product Diversification 6/30/2006 6/30/2016 11 ▪ Mix decreases: - Construction & Land 62% - Residential 82% - Total Real Estate 31% ▪ Mix increases: - Public Finance grown multiples from 2006 balances, much of which is rated investment grade - C&I growth of 65% primarily r
Slide 12: Deposit Growth and Composition
12 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $3,924 $4,077 $4,094 $4,635 $5,275 $1,001 $1,024 $1,028 $1,088 $1,278 $4,734 $4,673 $5,297 $5,651 $6,006 $1,747 $1,836 $1,611 $1,708 $1,642 Deposit Growth and Composition $ in millions Q2 2016 HIGHLIGHTS ▪ Quarter-over-quarter deposit growth driven by two deposit cat
Slide 13: Adversely Graded Loans and Non-Performing Assets
13 Adversely Graded Assets to Total Assets NPA's to Total Assets Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 2.69% 2.70% 2.54% 2.11% 2.24% 0.88% 0.76% 0.65% 0.57% 0.54% OREO Non-Performing Loans Classified Accruing Loans Special Mention Loans Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $59 $58 $44 $53 $50 $60 $48 $48 $34 $40 $
Slide 14: HFF Purchase Accounting Adjustments
14 Hotel Franchise Finance Purchase $ in millions * Purchase accounting adjustments are preliminary as of 6/30/2016 and are subject to measurement period adjustments. HFF Purchase Accounting Adjustments * $36.0 $3.6 $11.9 $6.1 14 Non-PCI PCI Rate Credit Rate Credit Unfunded Reserve $3.2 $0.5 $3.7 $0
Slide 15: Charge-Offs, Recoveries, ALLL, and Provision
15 Gross Charge-Offs Recoveries Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 $8.0 $(5.0) $(3.1) $(5.7) Charge-Offs, Recoveries, ALLL, and Provision $ in millions Gross Charge-Offs and (Recoveries) Net (Recoveries) / Charge-Offs and Rate ALLL+CD/Total Loans Loan Loss Provision ALLL/Total Loans Q2-15 Q3-15 Q4-15 Q1-
Slide 16: Capital Ratios and ROTCE and TBV/Share
16 ROTCE TBV/Share Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 16.0% 19.0% 18.6% 18.4% 17.4% $11.25 $11.86 $12.54 $13.16 $14.25 Capital Total Capital Common Equity Tier 1 Tier 1 Leverage Tangible Common Equity Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 12.2% 12.1% 12.1% 12.3% 12.9% 9.1% 9.1% 9.5% 9.9% 9.6% 10.0% 9.9% 9.8% 9.9
Slide 17: Outlook 3rd Quarter 2016
17 Outlook 3rd Quarter 2016 ▪ Loan and Deposit Growth ▪ Interest Margin ▪ Operating Efficiency ▪ Asset Quality 17
Slide 18: Forward-Looking Statements
18 Forward-Looking Statements This presentation contains 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- loo
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