Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Investor Presentation (March 2020)
20 slides from Western Alliance Bancorporation's investor presentation, Mar 10, 2020
Slide 1: Investor Update
VAN INVESTOR UPDATE Western Alliance Bancorporation’
Slide 2: Western Alliance Bank Overview
Western Alliance Bank Overview NYSE: WAL $26B+ Headquarters: Phoenix, AZ Regional Footprint in assets IPO: 2005 National Presence Market Cap1: $4.1B Top Performing Commercial Client Focused Bank Shares Outstanding: 102.5M Institutional Ownership: 88% Insider Ownership: 7.6% 21% tangible book Dividen
Slide 3: WAL's Value Proposition
WAL’s Value Proposition 1 Diversified business model allows flexibility to sustain growth across market cycles 2 Robust risk-adjusted loan and deposit growth 3 Industry-leading profitability 4 Conservative credit culture 5 Top-decile efficiency produces strong operating leverage 6 Shareholder-focuse
Slide 4: Diversified Business Model Allows Flexibility to Sustain Growth
1 Diversified Business Model Allows Flexibility to Sustain Growth WAL can actively adapt business and capital allocation in response to changing external environment Regional Growth trajectory Banking Residential Ample growth maintained with Divisions Mortgage Initiative potential prudent credit ris
Slide 5: Robust Risk-Adjusted Loan and Deposit Growth
2 Robust Risk-Adjusted Loan and Deposit Growth Diversified by product, client-type and geography emphasizing underwriting discipline • Diverse mix of regionally-focused Diversified Business Mix commercial banking divisions & nationally- oriented specialized businesses Loans by Product Type Loans by
Slide 6: National Business Lines Targeting Attractive Industries
National Business Lines Targeting Attractive Industries Segment-focused model supports superior client value and company risk management • NBLs provide dedicated lending and deposit banking WAL Loans by Segment NBL Composition services to niche markets No Cal • Industry and nationwide geographic div
Slide 7: Stable, Low Cost Deposit Franchise
Stable, Low Cost Deposit Franchise Diversified funding channels reflect long-term, stable relationships • $22.8Bn in stable deposits, typically tied to lending Solid Noninterest-Bearing Deposit Base relationship • Scalable national funding channels, such as HOA, Tech CDs 10% & Innovation, Life Scien
Slide 8: Industry-Leading Profitability
3 Industry-Leading Profitability ROAA WAL Peers • Outstanding performance compared to peers with ROAA and ROATCE among highest in industry 2.05% 2.00% • Leading earning asset yield of 5.30% 1.61% 1.72% 1.50% 1.56% 1.35% • Liquid securities portfolio mainly consists of MBS (79%) and Tax Exempt (17%)
Slide 9: Reduced Asset Sensitivity with Asymmetric Return Profile
Reduced Asset Sensitivity with Asymmetric Return Profile Percentage Increase/(Decrease) to Net As of 12/31/2019 Interest Income • Nearly 68% of loans are variable rate (approx. $14.4Bn) Down 100bps Scenario − 68% ($9.7Bn) of variable rate loans have interest rate floors Shock Ramp1 − 35% ($3.4Bn) of
Slide 10: Conservative Credit Culture
4 Conservative Credit Culture Credit quality is placed before profitability Reserve / Total Loans • Strong risk management culture and framework 1.47% WAL Peers established throughout organization 1.31% − Model focused on process-driven early elevation 1.31% 1.07% 1.02% and speed to resolution 0.93%
Slide 11: Asset Quality Stable Relative to Overall Balance Sheet Growth
Asset Quality Stable Relative to Overall Balance Sheet Growth While loans have historically seen double digit growth, adversely graded loans and non- performance assets have been consistent Non-Performing Assets and Adversely Graded Assets as a Percentage of Total Assets $400 Over last 5 years, less
Slide 12: Hotel Franchise Finance Structured for Superior Through-Cycle Performance
Hotel Franchise Finance Structured for Superior Through-Cycle Performance Financial flexibility is maximized through deep industry expertise, strong operating partners, and conservative underwriting structure • As of 12/31/2019, Hotel Franchise Finance portfolio 2 Conservative underwriting provides
Slide 13: Technology & Innovation Segment Serves Emerging Technology-Focused Ventures & Investors
Technology & Innovation Segment Serves Emerging Technology-Focused Ventures & Investors Primarily focused on established growth companies with successful products and strong investor support, which provides greater operating and financial flexibility • As of 12/31/2019, Tech. & Innovation portfolio
Slide 14: Top Decile Efficiency Produces Strong Operating Leverage
5 Top Decile Efficiency Produces Strong Operating Leverage Track record of simultaneously driving industry-leading growth and efficiency • Continued focus on expense management, while investing in growth initiatives and scalable infrastructure to be a leading nationwide banking platform 65.0% 63.2%
Slide 15: Shareholder-Focused Capital Management
6 Shareholder-Focused Capital Management WAL consistently generates more capital than needed to support organic growth • Endeavor to provide superior total shareholder return without Growth in TBV per Share curtailing growth • Strong returns bolster capital above peers WAL • Under a share repurchase
Slide 16: Sound Balance Sheet Well-Positioned for the Future
Sound Balance Sheet Well-Positioned for the Future Strategic positioning supports ongoing versatility of business model • Net charge-offs bottom • Loan growth funded through quartile versus peers core deposits • Strategic balance sheet • $6.8Bn in unused borrowing reallocation towards low capacity (
Slide 17: Seasoned and Invested Leadership Team
7 Seasoned and Invested Leadership Team Management averages 27+ years of industry experience. Insider ownership of ~8% Kenneth A. Vecchione Dale M. Gibbons Chief Executive Officer Vice Chairman, Chief Financial Officer 12 total years at WAL 16 years at WAL 35+ years experience, including 30+ years i
Slide 18: Top Performing Bank with a Discounted Multiple
Top Performing Bank with a Discounted Multiple WAL has experienced 17 consecutive quarters of EPS stability and growth • In addition to industry-leading growth, WAL produces top decile profitability amongst the Top 50 Banks1 Quarterly EPS & Stock Price WAL Rank Metric 3.0x WAL Stock Price Total Asse
Slide 19: Historical Valuation Multiples
Historical Valuation Multiples P / LTM EPS 23.0x WAL Peers 21.0x 19.0x 17.0x 15.0x 13.0x 11.0x 10.3x 9.0x 8.2x 7.0x 12/31/13 6/30/14 12/31/14 6/30/15 12/31/15 6/30/16 12/31/16 6/30/17 12/31/17 6/30/18 12/31/18 6/30/19 12/31/19 375% P / TBV 350% WAL Peers 325% 300% 275% 250% 225% 200% 175% 150% 149%
Slide 20: 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 stateme
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