Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q2 2022 Earnings Presentation
18 slides from Western Alliance Bancorporation's earnings presentation, Jul 22, 2022
Slide 1: Earnings Call 2nd Quarter 2022
EARNINGS CALL 2nd Quarter 2022 JULY 22, 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: Highlights: 2nd Quarter 2022 Financial Highlights
Highlights 2nd Quarter 2022 | Financial Highlights Earnings & Profitability Q2-22 Q1-22 Q2-21 $2.39 $2.22 $2.17 Earnings per Share Net Income EPS Net Income $260.2 $240.1 $223.8 Net Revenue $620.0 $555.8 $506.5 $260.2 million $2.39 Pre Provision Net Revenue1 $351.1 $307.2 $261.7 Net Interest Margin
Slide 4: Quarterly Income Statement
Q2 2022 Highlights Quarterly Income Statement Q2-22 Q1-22 Q2-21 Net Interest Income increased $75.5 million, Interest Income $579.6 $484.5 $398.5 1 primarily from strong loan growth and expanding NIM Interest Expense (54.6) (35.0) (28.0) Net Interest Income $525.0) 1 $449.5) $370.5 Non-Interest Inco
Slide 5: Net Interest Drivers
Q2 2022 Highlights Net Interest Drivers Total Investments and Yield Loans and HFI Yield • Loan yields increased 21 bps due to an 2.77% 2.94% 4.48% 4.28% 4.19% overall increase in the rate environment 4.03% 3.98% 2.47% 2.46% 2.51% $3.0 • Transferred $1.9 billion of EBO loans $4.8 $7.8 $7.7 $7.5 $8.3
Slide 6: Net Interest Income
Q2 2022 Highlights Net Interest Income Net Interest Income and Net Interest Margin Average Earning Assets & Average Yield • Net Interest Income increased $75.5 million, or 16.8%, over prior quarter Dollars in millions Dollars in billions primarily due to strong loan growth and $525.0 the increasing
Slide 7: Net Interest Income in a Rising Rate Environment
Q2 2022 Highlights Net Interest Income in a Rising Rate Environment • WAL expects a 5.3% increase in NII under a NII Sensitivity – Shock Scenario, +100 bps 100 bps rate shock on a static balance sheet Static Balance Sheet • 51% of loans (ex-HFS) are contractually variable Growth Balance Sheet 1 ($24
Slide 8: Expenses and Efficiency
Q2 2022 Highlights Expenses and Efficiency1 • Efficiency ratio1 improved 130 bps to Non-Interest Expenses and Efficiency Ratio 42.8% compared to the prior quarter and 470 bps from the same period last year 47.5% • Lower efficiency ratio1 was driven by 44.1% increase in net interest income from 42.0%
Slide 9: Pre-Provision Net Revenue, Net Income, and ROA
Q2 2022 Highlights Pre-Provision Net Revenue1, Net Income, and ROA • PPNR1 increased $43.9 million from the PPNR, Net Income & ROA prior quarter and $89.4 million, or 34.2%, from the same period last year 2.43% 2.10% • PPNR ROA1 increased 9 bps from the prior 2.18% 2.23% 2.19% quarter and 1 bps from
Slide 10: Consolidated Balance Sheet
Q2 2022 Highlights Consolidated Balance Sheet Q2-22 Q1-22 Q2-21 Loans increased $5.3 billion, or 52.2% 1 annualized, net of $1.9 billion in EBO loan Investments & Cash $10,688 $10,879 $11,241 transfers from HFS to HFI Loans, HFS 3,010 4,762 4,465 Deposits increased $1.6 billion, or 11.9% Loans HFI,
Slide 11: Five Quarter Loan Growth and Composition
Highlights Five Quarter Loan Growth and Composition Quarter-over-quarter loan growth of $16.41 Billion Year-Over-Year Growth $5.31 billion driven by (in millions): Residential & Consumer $1,535 Total Loans, HFI $30.0 $34.8 $39.1 $41.1 $48.4 C&I 2,892 Qtr. Change +$1.3 +$4.8 +$4.3 +$2.0 +$5.31 926 CR
Slide 12: Five Quarter Deposit Growth and Composition
Highlights Five Quarter Deposit Growth and Composition Quarter-over-quarter deposit growth of $11.8 Billion Year-Over-Year Growth $1.6 billion driven by (in millions): CDs $760 Total Deposits $41.9 $45.3 $47.6 $52.1 $53.7 Savings and MMDA 473 Qtr. Change +$3.5 +$3.4 +$2.3 +$4.5 +$1.6 Non-Interest Be
Slide 13: Asset Quality
Q2 2022 Highlights Asset Quality Classified Assets Special Mention Loans • Total Classified Assets of $346 million (52 bps to Total Assets) decreased $19 million $365 $346 in Q2 $301 1.35% $265 1.05% • Non-Performing Loans + OREO of $97 0.85% $239 0.85% 0.66% million (15 bps to Total Assets) $262 $2
Slide 14: Credit Losses and ACL Ratios
Q2 2022 Highlights Credit Losses and ACL Ratios Allowance for Credit Losses Gross Charge-offs and Recoveries • Provision expense of $27.5 million, driven $3 by strong loan growth Gross Charge Offs $3 $54 $5 $5 $43 $31 $6 $32 $37 Recoveries • Total Loan ACL / Funded Loans decreased $3.3 $3.9 5 bps to
Slide 15: Capital Accumulation
Q2 2022 Highlights Capital Accumulation Robust Common Capital Levels Regulatory Capital Levels • Exceed “well-capitalized” levels and stabilized after the initial impact of the AmeriHome 9.2% 9.1% 9.0% 9.0% 8.7% transaction 7.1% 6.9% 7.3% 6.7% 6.1% • CET1 at 9.0% Tangible Common Equity / Tangible As
Slide 16: Tangible Book Value Growth
Highlights Tangible Book Value Growth Long-Term Growth in TBV per Share1 Tangible Book Value per Share1 WAL • TBVPS decreased $0.46 to $36.67 from prior WAL with Dividends Added Back 164% quarter Peer Avg • Increased 11.6% year-over-year Peer Avg with Dividends Added Back 142% • Decreased 1.2% quart
Slide 17: Management Outlook
Management Outlook Balance Sheet Growth Net Interest Income Pre-Provision Net Revenue Capital and Liquidity 17
Slide 18: Questions & Answers
ee M\VAN | Nes Wester Alliance Questions & Answers
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