Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2016 Earnings Presentation
16 slides from Western Alliance Bancorporation's earnings presentation, Oct 24, 2016
Slide 1: 3rd Quarter 2016 Earnings Call
3rd Quarter 2016 Earnings Call October 24, 2016
Slide 2: Financial Highlights
2 Financial Highlights ▪ Net income of $67.1 million and earnings per share of $0.64 (inclusive of $0.02 in acquisition / restructure expense), compared to $61.6 million and $0.60 per share for Q2 2016 (inclusive of $0.02 in acquisition / restructure expense), and $55.9 million and $0.55 per share f
Slide 3: Quarterly Consolidated Financial Results
3 Quarterly Consolidated Financial Results $ in millions, except EPS Q3 2016 HIGHLIGHTS ▪ Net Interest Income increased $8.8 million as a result of an increase in investment securities, a full quarter of HFF results, loan growth, and one additional day in the quarter ▪ Operating Non-Interest Income
Slide 4: Net Interest Drivers
4 Net Interest Drivers $ in billions Interest Bearing Deposits and Cost of Funds Loans and Yield Borrowings and Cost of Borrowings Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 2.73% 2.94% 3.65% 2.84% 4.05% $506.8 $360.3 $210.6 $382.1 $382.9 Q3 2016 HIGHLIGHTS ▪ Investments increased $516 million as a result of dep
Slide 5: Net Interest Income and Accretion
5 Net Interest Income and Accretion $ in millions Q3 2016 HIGHLIGHTS ▪ NIM decreased 8 bps largely due to increased interest expense from the issuance of long-term subordinated debt in Q2 2016 and growth in lower yielding investment portfolio ▪ NIM adjusted for acquired loan accretion was 4.33% for
Slide 6: Operating Expenses and Efficiency
6 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 $43.7 $41.2 $44.9 $44.7 $49.5 $9.3 $9.8 $9.6 $10.2 $10.0$8.4 $10.5 $10.1 $11.6 $11.8 $10.8 $11.3 $11.2 $11.3 $11.1 Operating Expenses and Efficiency $ in millions Q3 2016 HIGHLIGHTS ▪ The efficiency ratio remained steady at 43.0% ▪ Compensation expense increased due t
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 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 $73.7 $79.9 $82.1 $94.5 $100.8 2.16% 2.28% 2.27% 2.37% 2.38% Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 $55.9 $58.5 $61.3 $61.6 $67.1 1.64% 1.67% 1.70% 1.55% 1.58% ▪
Slide 8: Consolidated Balance Sheet
8 Consolidated Balance Sheet $ in millions, except per share data ▪ Total loans increased $156 million over prior quarter and $2.25 billion (20.8%) over prior year with $1.28 billion attributable to Hotel Franchise Finance and the remainder due to organic growth ▪ Deposits increased $242 million ove
Slide 9: Loan Growth and Portfolio Composition
9 Loan Growth and Portfolio Composition $ in millions Q3 2016 HIGHLIGHTS ▪ Quarter-over-quarter loan growth driven by two loan categories: - C&I $137 million - Construction & Land $46 million ▪ Year-over-year loan growth driven by three loan categories: - CRE, Non-OO $1.41 billion* - C&I $755 millio
Slide 10: Deposit Growth and Composition
10 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 $4,077 $4,094 $4,635 $5,275 $5,625 $1,024 $1,028 $1,088 $1,278 $1,257 $4,673 $5,297 $5,651 $6,006 $5,969 $1,836 $1,611 $1,708 $1,642 $1,592 Deposit Growth and Composition $ in millions Q3 2016 HIGHLIGHTS ▪ Quarter-over-quarter deposit growth primarily driven by Non-
Slide 11: Loans and Deposits by Client or Collateral Domicile
11 Loans and Deposits by Client or Collateral Domicile $ in millions Deposits Loans 38.0% 17.6% 14.6% 30.7% 25.4% 16.0% 16.4% State Amount % California $ 4,947 38.0% Arizona 2,300 17.6% Nevada 1,900 14.6% Texas 421 3.2% New York 314 2.4% New Jersey 248 1.9% South Carolina 240 1.8% Georgia 227 1.7% W
Slide 12: Adversely Graded Loans and Non-Performing Assets
12 Adversely Graded Assets to Total Assets NPA's to Total Assets Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 2.70% 2.54% 2.11% 2.24% 1.97% 0.76% 0.65% 0.57% 0.54% 0.53% OREO Non-Performing Loans Classified Accruing Loans Special Mention Loans Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 $58 $44 $53 $50 $50 $48 $48 $34 $40 $41 $
Slide 13: Charge-Offs, Recoveries, ALLL, and Provision
13 Gross Charge-Offs Recoveries Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Charge-Offs, Recoveries, ALLL, and Provision $ in millions Gross Charge-Offs and (Recoveries) Net Charge-Offs (Recoveries) and Rate ALLL+CD/Total Loans Loan Loss Provision ALLL/Total Loans Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 1.32% 1.25% 1.21% 1
Slide 14: ROTCE, TBV/Share and Capital Ratios
14 ROTCE TBV/Share Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 19.0% 18.6% 18.4% 17.4% 17.5% $11.86 $12.54 $13.16 $14.25 $14.84 Capital Total Capital Common Equity Tier 1 Tier 1 Leverage Tangible Common Equity Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 12.1% 12.2% 12.3% 12.9% 13.1% 9.1% 9.7% 9.9% 9.6% 9.8%9.9% 9.8% 9.9% 9.8%
Slide 15: Outlook 4th Quarter 2016
15 Outlook 4th Quarter 2016 ▪ Loan and Deposit Growth ▪ Interest Margin ▪ Operating Efficiency ▪ Asset Quality 15
Slide 16: Forward-Looking Statements
16 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 stat
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