Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Investor Presentation (May 2024)
25 slides from Western Alliance Bancorporation's investor presentation, May 21, 2024
Slide 1: Investor Update 2nd Quarter 2024
INVESTOR UPDATE 2nd Quarter 2024
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: Western Alliance Bancorporation Overview Summary
3 Western Alliance Bancorporation Overview Summary The Bank for All Seasons A national commercial bank anchored in attractive regional markets with specialty business lines providing sophisticated sector and product expertise to clients Our differentiated, value-added banking services centered aroun
Slide 4: Income statement summary
4 Q1-24 Q4-23 Q1-23 Interest Income $ 1,055.0 $ 1,039.0 $ 968.9 Interest Expense (456.1) (447.3) (359.0) Net Interest Income $ 598.9 $ 591.7 $ 609.9 Mortgage Banking Related Activity 91.7 56.9 73.3 Fair Value Gain (Loss) Adjustments, Net 0.3 1.3 (147.8) Loss on Sales of Investment Securities (0.9) (
Slide 5: WAL's Value Proposition
WAL’s Value Proposition 5 1 Diversified business model – flexibility to sustain sound growth across market cycles 2 Specialized, high quality loan portfolio – deep client segment expertise and underwriting acumen 3 Differentiated deposit franchise – specialized, national channels serving secularly s
Slide 6: WAL's Thoughtful Evolution
WAL’s Thoughtful Evolution 6 Deliberate evolution from a Nevada-focused community bank to a national commercial bank Nevada Community Bank (1994 – 2002) Regional Bank with a National Reach (2010 – 2017) 1994 Founded as Bank West of Nevada 2003 Opened de novo Torrey Pines Bank in SoCal 2005 IPO 2015
Slide 7: Branch-Lite, National Commercial Bank
Branch-Lite, National Commercial Bank 7 A national commercial bank anchored in attractive regional markets with specialty business lines providing sophisticated sector and product expertise to clients States with licensed depositories WAL’s branch network represented by major MSAs Physical office lo
Slide 8: WAL actively adapts business and capital allocation in response to changing external environment
8 WAL actively adapts business and capital allocation in response to changing external environment Note: Illustrative as business objectives are not mutually exclusive and image does not represent full suite of WAL divisions, products and services. Treasury Mgmt. SalesGeographic Diversification Regi
Slide 9: Deliberate business transformation emphasizes underwriting specialization and diversification
9 • Deliberate, decade-long business transformation strategy • Nearly 70% of GFC losses from 4Q09 to 4Q12 came from categories comprising 44% of portfolio at 4Q09, which today makes up <6% of loans • Losses concentrated in Nevada and consumer lending during GFC • Since year-end 2013, cumulative NCOs
Slide 10: Specialized, High Quality Loan Portfolio
Peers1 Median: 8.8% Top Quart.: 13.1% Specialized, High Quality Loan Portfolio 10 Highlights Diversified by product, client-type and geography emphasizing underwriting discipline 29% 9% 19%4% 39% Resi. & Consumer Const. & Land CRE, NOO CRE, OO C&I Q1-24 Loans HFI by Product Type Warehouse Lending 14
Slide 11: Asset quality and credit metrics outperformance
11 • A decade of business transformation has resulted in consistent relative outperformance in asset quality and credit metrics • Asset quality remained strong during height of the pandemic • Improvement / stabilization in non- accruals reflects timely identification and resolution of problem loans
Slide 12: Historical Loan Migration Near Peer Median
Historical Loan Migration Near Peer Median Reflects “Early Identification and Elevation” Credit Strategy 12 Quarterly Criticized Loans / Gross Loans Q1-14 to Q1-24 Peer group consists of WAL and 19 major exchange-traded US banks with total assets between $50B and $250B as of March 31, 2024. Data inc
Slide 13: Proactive migration enhances oversight and mitigates credit losses
Proactive migration enhances oversight and mitigates credit losses 13 Annualized Net Charge-Offs Q 1-14 to Q1-24 Peer group consists of WAL and 19 major exchange-traded US banks with total assets between $50B and $250B as of March 31, 2024. Data include the effects of M&A transactions for peers and
Slide 14: Conservative, Economically Resilient Portfolio Positioning
14 Specialized underwriting expertise and conservative sector allocations position portfolio to withstand economic uncertainty Conservative, Economically Resilient Portfolio Positioning Insured (20%) • Residential • Early Buyout (“EBO”) Resi. & Other Government-Guaranteed or Cash-Secured Assets • Wa
Slide 15: ACL Supported by Loan Mix and Strong Capital
1) Total Loan ACL includes allowance for unfunded commitments. 2) Ratio includes an allowance for credit losses of $14.2 million as of March 31, 2024 related to a pool of loans covered under 3 separate credit linked notes. 3) Early Buyout Loans are government guaranteed. 4) Loss rates are based on t
Slide 16: Scalable, Differentiated Deposit Franchise
Note: Borrowings include customer repurchase agreements; Cost of Funds defined as total expense paid on interest bearing liabilities divided by the sum of average interest- bearing liabilities and average non-interest bearing demand deposits. Diversified funding channels provide secular growth trend
Slide 17: Net Interest Drivers
17 Interest Bearing Deposits and Cost Loans and HFI Yield Deposits, Borrowings, and Cost of Liability Funding Securities Portfolio and Yield Non-Interest Bearing Deposits Total Borrowings Highlights Net Interest Drivers Dollars in billions, unless otherwise indicated Interest Bearing DepositsInteres
Slide 18: Leading Profitability
ROAA Leading Profitability 18 • ROAA and ROATCE have consistently exceeded peers over the last 10 years • Net Interest Income remained stable from 2023 due to average earning asset growth and the rising rate environment • NIM decreased 5 bps, driven by higher interest expense on deposits • PPNR decl
Slide 19: Shareholder-Focused Capital Management
493% 561% 73% 133% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 MRQ Note: Peers consist of 19 publicly traded banks headquartered in the US with total assets between $50B and $250B, excluding target banks of pending acquisitions, as of March 31, 2024. TSR through March 31, 2024. Source: S&
Slide 20: Appendix
VAN Western Alliance Bancorporation® Appendix
Slide 21: Business Line Spotlight: National Leader in HOA Banking
Business Line Spotlight: National Leader in HOA Banking 21 Customized, industry-leading solutions for Community Management Companies Continuous Investments Drive Sustained Growth Dollars in billions • Robust API solution enabling clients to connect and integrate daily banking functions with accounti
Slide 22: Superior Deposit Liquidity and Fortified Adjusted Capital
22 ABCB ASB BAC BANC BKU BOKF BPOP C CADE CBSH CFG CFR CMA COLB EWBC FCNC.A FHN FIBK FITB FNB FULT GBCI HBAN HWC JPM KEY MTB NYCB ONB OZK PB PNC PNFP RF SFNC SNV SSB TCBI TFC UBSI UCBI UMBF USB VLY WAFD WAL WBS WFC WTFC ZION 50% 55% 60% 65% 70% 75% 80% 85% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% In su re
Slide 23: Commercial Real Estate Investor Statistics
23 Commercial Real Estate Investor Statistics CRE Investor Portfolio ($9.6 billion; 19% of Total Loans) Note: LTV data assumes all loans are fully funded; based on most recent appraisals or appraisal at origination and utilizing, in most cases, “as stabilized” values for income producing properties.
Slide 24: Commercial Real Estate Investor: Office Distribution by LTV
24 Commercial Real Estate Investor: Office Distribution by LTV Note: LTV data assumes all loans are fully funded; based on most recent appraisals or appraisal at origination and utilizing, in most cases, “as stabilized” values for income producing properties. Key MSA Exposures $2.5 Billion; 26% of T
Slide 25: Western Alliance Bancorporation
VAN Western Alliance Bancorporation®
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