Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q1 2025 Earnings Presentation
22 slides from Western Alliance Bancorporation's earnings presentation, Apr 22, 2025
Slide 1: Earnings Call 1st Quarter 2025
Q2 20241 EARNINGS CALL 1st Quarter 2025 April 22, 2025
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: Q1 2025 Financial Highlights
Q1 2025 Highlights 1st Quarter 2025 | Financial Highlights Net Income EPS Earnings & Profitability Q1 2025 Q4 2024 Q1 2024 Earnings per Share $ 1.79 $ 1.95 $ 1.60 $199.1 million $1.79 Net Income 199.1 216.9 177.4 12.2% Y-o-Y Net Revenue 778.0 838.4 728.8 Pre-Provision Net Revenue1 277.6 319.4 247.0
Slide 4: Quarterly Income Statement
Q1 2025 Highlights Quarterly Income Statement Net Interest Income increased $51.7 million over prior Q1-25 Q4-24 Q1-24 1 year and decreased $15.9 million from Q4 primarily due to Interest Income $ 1,095.6 $ 1,138.6 $ 1,055.0 a smaller quarterly day count Interest Expense (445.0) (472.1) (456.1) Non-
Slide 5: Net Interest Drivers
Q1 2025 Highlights Net Interest Drivers Securities Portfolio and Yield Loans and HFI Yield • Securities Portfolio yields decreased 4 bps, primarily due to the impact of lower rates on floating rate 6.77% 6.79% 6.65% 4.66% 4.87% 4.89% 4.67% 4.63% 6.34% 6.20% securities tied to SOFR $2.3 $2.3 $3.2 $2.
Slide 6: Net Interest Income
Q1 2025 Highlights Net Interest Income Net Interest Income and Net Interest Margin Average Earning Assets & Average Yield • Net Interest Income decreased $15.9 million, or 2.4%, primarily due to smaller quarterly day count and Dollars in millions Dollars in billions lower yields on interest earning
Slide 7: Non-Interest Expenses and Efficiency
Q1 2025 Highlights Non-Interest Expenses and Efficiency Non-Interest Expenses and Efficiency Ratio 1 Breakdown of Non-Interest Expenses • Adjusted efficiency ratio1 (excluding deposit costs) increased 470 bps to 55.8% and declined 150 bps from the same period last year 65.2% 64.5% 63.5% 62.3% 61.2%
Slide 8: Interest Rate Sensitivity
Q1 2025 Highlights Interest Rate Sensitivity • A Ramp Scenario assumes a dynamic balance sheet 1 NII Sensitivity - Ramp Scenario and reflects an asset sensitive position on NII and a neutral position on EaR 3.0% – WAL estimates a -100 bps ramp to reduce NII by (2.5%) • EaR is interest rate neutral,
Slide 9: Consolidated Balance Sheet
Q1 2025 Highlights Consolidated Balance Sheet Q1-25 Q4-24 Q1-24 Securities and Cash decreased $44 million, or Securities and Cash $ 19,147 1 $ 19,191 $ 19,642 1 0.2%, to $19.1 billion and decreased $495 million, Loans, HFS 3,238 2,286 1,841 or 2.5%, over prior year Loans, HFI 54,761 2 53,676 50,700
Slide 10: Loan Composition
Q1 2025 Highlights Loan Composition Loan growth from C&I businesses within Regional Banking and National Business Lines Increase (Decrease) by Loan Type: $4.1 Billion Year-over-Year Growth (in millions) QoQ YoY C&I $ 989 $ 4,368 Total Loans, HFI $50.7 $52.4 $53.3 $53.7 $54.8 CRE, Non-OO 172 403 Qtr
Slide 11: Deposit Composition
Q1 2025 Highlights Deposit Composition Diversified deposit growth across Specialty Escrow Services and National Business Lines Increase (Decrease) by Deposit Type: $7.1 Billion Year-over-Year Growth (in millions) QoQ YoY Non-Interest Bearing $ 3,163 $ 3,610 Total Deposits $62.2 $66.2 $68.0 $66.3 $69
Slide 12: Asset Quality
Q1 2025 Highlights Asset Quality Special Mention Loans Asset Quality Ratios • Criticized Assets increased $254 million quarterly to $1.7 billion 1.01% 0.94% 1.44% – Special Mention Loans increased $68 million to 0.78% 0.73% 0.84% 1.25% $460 million (84 bps to Funded Loans) 1.01% 1.05% 0.93% – Total
Slide 13: Credit Losses and ACL Ratios
Q1 2025 Highlights Credit Losses and ACL Ratios Allowance for Credit Losses Gross Loan Charge-offs and Recoveries • Provision Expense of $31.2 million, primarily reflective of net charge-offs, loan growth, and an Gross Charge-Offs Recoveries incremental benefit to the reserve for CRE $12 $17 $10 $35
Slide 14: Key Reserve Level Ratios
Q1 2025 Highlights Key Reserve Level Ratios Reserve levels enhanced by credit protection and low loss loan categories • WAL remains appropriately reserved Adjusted Total Loan ACL / Funded Loans: Q1-25 • Total Loan ACL / Funded Loans of 0.77% 1.35% – CLNs offer credit protection from first losses on
Slide 15: Fortified Adjusted Capital
Fortified Adjusted Capital CET1 capital adjusted for AOCI securities marks & reserves remains solidly above peer median levels Adjusted CET1 (incl. of AOCI Unrealized Securities Marks & Loan Loss Reserves) 15% 14% 13% 12% 11.7%: 75th pctl Q1 Q4 11% 11.0% 11.0% 10.5%: Median 10% 9.9%: 25th pctl 9% 8%
Slide 16: Capital Accumulation
Q1 2025 Highlights Capital Accumulation Common Capital Ratios Regulatory Capital Ratios • Continue to exceed “well-capitalized” levels with 11.2% 11.3% 11.1% 11.0% 11.0% CET1 of 11.1% Tangible Common Equity / Tangible Assets1 7.2% 7.2% 7.2% • TCE/TA remained flat at 7.2% 6.8% 6.7% Capital Accretion
Slide 17: Tangible Book Value Growth
Q1 2025 Highlights Tangible Book Value Growth Long-Term Growth in TBV per Share1 Tangible Book Value per Share1 6x • TBVPS increased $1.83 to $54.10 from organic WAL WAL with Dividends Added Back earnings and smaller AOCI impact due to lower Peer Median 501% rates 5x Peer Median with Dividends Added
Slide 18: Management Outlook
Management Outlook 2024 Baseline 2025 Outlook Commentary Loans (HFI): $53.7 bn L (HFI): +$5.0 bn • Pipelines are healthy. Remain Balance Sheet Growth Deposits: $66.3 bn flexible based on environment D: +$8.0 bn • Prudent to maintain excess Capital (CET1) 11.3% > 11% capital in uncertain environment
Slide 19: Questions & Answers
Questions & Answers
Slide 20: Appendix
NVA Western Alliance Bancorporation® Appendix
Slide 21: Commercial Real Estate Investor Statistics
Commercial Real Estate Investor Statistics $10.0 billion; 18% of Total Loans Underwriting Criteria and Mitigating Factors CRE Investor Portfolio (At Origination or Most Recent Appraisal) • Low LTV & LTC (50% to low 60%) range underwriting in areas 69% minimizes tail risk 62% 59% • Simple capital str
Slide 22: Commercial Real Estate Investor: Office
Commercial Real Estate Investor: Office $2.4 Billion; 24% of Total CRE Investor; 4% of Total Loans Distribution by LTV (At Origination or Most Recent Appraisal) Underwriting Criteria and Mitigating Factors • Primarily shorter-term bridge loans for repositioning or redevelopment projects 25% 23% 23%
Western Alliance Bancorporation Common Stock (DE) — Q1 2025 Earnings Presentation on 6ix