Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q4 2013 Earnings Presentation
24 slides from Western Alliance Bancorporation's earnings presentation, Jan 23, 2014
Slide 1: Western Alliance Bancorporation 4th Quarter Earnings Call
(NYSE: WAL) January 24, 2014 Western Alliance Bancorporation 4th Quarter Earnings Call
Slide 2: Q4 2013 Financial Performance
Q4 2013 Financial Performance o Continued Income Growth – Net income of $31.4 million, compared to $28.2 million for the third quarter 2013 and $32.1 million for the fourth quarter 2012 – Net income of $29.8 million for the fourth quarter 2013, excluding the following items net of tax effects: $3.7
Slide 3: Q4 2013 Financial Performance: Balance Sheet, Asset Quality, Capital
Q4 2013 Financial Performance o Sustained Balance Sheet Growth − Total assets of $9.31 billion, up $386 million from $8.92 billion in Q3 2013 and $1.68 billion from $7.62 billion in Q4 2012 − Total loans of $6.80 billion, up $285 million from $6.52 billion in Q3 2013 and $1.09 billion from $5.71 bil
Slide 4: Financial Performance: 2012 - 2013
Financial Performance: 2012 - 2013 $ in millions $134.0 $161.1 $100 $125 $150 $175 2012 2013 $290.3 $332.9 $200 $250 $300 $350 2012 2013 $178.4 $192.9 $150 $175 $200 $225 2012 2013 Net Interest Income Pre Tax Pre Provision Income Operating Expense Note: Operating Expenses exclude goodwill impairment
Slide 5: Loan Growth and Portfolio Composition
Loan Growth and Portfolio Composition $ in millions $1.09 Billion Year Over Year Growth Commercial & Industrial CRE, Owner Occupied CRE, Non- Owner Occupied Construction & Land Residential and Consumer Year Over Year Highlights $5,709 $5,855 $6,412 $6,516 $6,801 Growth +146 +557 +104 +285 Page 5 $53
Slide 6: Deposit Growth and Composition
Deposit Growth and Composition $ in millions $1.38 Billion Year Over Year Growth Savings & MMDA NOW CDs Non-Int Bearing DDA $1,933 $1,930 $1,920 $1,972 $2,200 $2,574 $2,827 $2,945 $3,050 $3,310 $582 $620 $631 $674 $710 $1,366 $1,358 $1,505 $1,579 $1,618 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $6,455 $6,735 $7
Slide 7: Adversely Graded Loans and Non-Performing Assets
Adversely Graded Loans and Non-Performing Assets $ in millions Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 OREO Non-Performing Loans Classified Accruing Loans Special Mention Loans $125 $20 Organic Acquired* Q4 2012 – Q4 2013 NPA’s Adversely Graded Loans * Net of Centennial and Western Liberty credit and rate mar
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet $ in millions * Net of tax Page 8 o Total assets increased 22.1%, or $1.7 billion year over year o Allowance for Credit Losses rose modestly from $95 million to $100 million, as loans grew o Tangible Common Equity increased 16.4%, or $97 million o Tangible Book Value/Share
Slide 9: Consolidated Financial Results
Consolidated Financial Results Year Over Year Highlights o Debt valuation loss and securities gains/losses are due to market appreciation on outstanding trust preferred securities o Net loss on extinguishment of debt due to repurchase of $10.1 million of senior notes o Q4 2014 Income tax expense dec
Slide 10: EPS Walkforward: Reported to Operating EPS
EPS Walkforward: Reported to Operating EPS Components of Changes in Earnings Per Share $0.02 ($0.02) ($0.04) $0.01 $0.01 $0.36 Q4 2013 Operating EPS Net Gain on Repossessed Assets Tax Reduction from WLBC Q4 2013 Reported EPS Debt Valuation Loss and Securities Gains Merger/ Restructure Expenses $0.34
Slide 11: Net Interest Income and NIM
$30.1 $29.3 $30.7 $31.9 $31.0 4.50% 4.16% 4.25% 4.44% 4.25% 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% 5.2% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $26.7 $26.6 $32.5 $33.8 $37.3 4.58% 4.42% 4.74% 4.73% 4.81% $15 $19 $23 $27 $31 $35 $39 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $22.2 $20.8 $20.6 $21.1 $23.1 5.07% 4.72% 4.64% 4.65% 4.6
Slide 12: WAL Consolidated Net Interest Drivers
$5.7 $5.9 $6.4 $6.5 $6.8 5.60% 5.42% 5.40% 5.44% 5.48% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $205 $422 $249 $381 $307 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $1.2 $1.3 $1.3 $1.4 $1.7 3.25% 3.21% 2.92% 3.01% 3.11% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $4.5 $4.8 $5.1 $5.3 $5.6 0.35% 0.32% 0.32% 0.33% 0.33% Q4-12 Q1-13 Q2-13 Q3
Slide 13: Operating Expense and Efficiency Ratio
Operating Expense and Efficiency Ratio $ in millions $16.8 $17.4 $17.3 $17.8 $18.8 45.5% 50.5% 48.0% 47.1% 51.4% 35% 40% 45% 50% 55% 60% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $13.1 $13.1 $14.7 $15.2 $17.0 45.2% 45.1% 42.0% 40.8% 42.3% $5 $10 $15 $20 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $11.1 $12.0 $12.0 $11.9 $12.
Slide 14: Pre-Tax Pre-Provision Income / ROA
Pre-Tax Pre-Provision Income / ROA $ in millions $16.7 $15.3 $17.3 $18.4 $16.9 2.31% 1.93% 2.12% 2.22% 2.02% 1.5% 2.0% 2.5% 3.0% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $15.2 $15.3 $19.5 $21.1 $22.2 2.38% 2.36% 2.62% 2.68% 2.62% $0 $5 $10 $15 $20 $25 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $12.2 $9.9 $9.7 $9.9 $11.5 2.
Slide 15: Net Income and ROA
Net Income and ROA $ in millions $7.6 $10.7 $12.7 $16.3 $10.7 0.99% 1.34% 1.55% 1.96% 1.28% 0.0% 0.5% 1.0% 1.5% 2.0% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $10.4 $8.5 $12.0 $9.8 $12.2 1.63% 1.31% 1.61% 1.24% 1.45% $0 $5 $10 $15 $20 $25 $30 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $5.2 $6.3 $5.8 $4.6 $4.9 0.70% 1.30% 1.
Slide 16: Composition of Pass Credits and Loan Grades
Composition of Pass Credits and Loan Grades 12/31/12 High Pass $1,504 Pass $3,887 Special Mention $104 Classified $215 Wtd Grade 4.16 Total Loans $5,709 million Pass Credits and Loan Grades Q4 2012 – Q4 2013 Composition of Pass Credits and Loan Grades 12/31/13 High Pass $1,852 Pass $4,616 Special Me
Slide 17: Net Charge-Offs and Provision Q4 2012 – Q4 2013
13.5 5.4 2.7 (1.5) 2.1 3.2 2.7 3.1 4.8 2.4 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $13.5 0.99% 0.38% 0.17% -0.10% 0.13% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Affinity Card Mark to Fair Value ($2.6 mil) WAB TPB BON Net Charge-Off Rate $2.7 Net Charge-Offs and Provision Q4 2012 – Q4 2013 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 N
Slide 18: Allowance for Credit Losses at 12/31/13
Allowance for Credit Losses at 12/31/13 Page 18 Effect of No Reserve for Acquired Loans Reported Less: Acquired Loans* Adjusted Al lowance for Loan Losses 100 $ 100 $ Total Loans 6,801 $ 373 $ 6,428 $ Ratio 1.47% 1.56% Effect of Acquired Loans Booked at Discount Reported Plus: Credit Discount* Adjus
Slide 19: Charge-Offs By Vintage and Remaining Balances
$2.4 $2.4 $2.1 $5.3 $26.0 $67.1 $126.9 $99.0 $64.7 $5.3 $2.9 $2.0 $0.2 $0.2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Charge-Offs by Origination Vintage 2000-2013 $12.2 charge offs (3.0% of total) $383.7 charge offs (94.4% of total) $10.6 charge offs (2.6% of total) Charg
Slide 20: Regulatory Ratios Q4 2012 – Q4 2013
12.6% 12.6% 12.0% 12.5% 12.6% 8.6% 8.6% 8.3% 8.8% 8.9% 11.3% 11.3% 10.8% 11.2% 11.4% 10.1% 10.1% 9.9% 10.0% 9.8% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Total RBC Tier 1 Common Tier 1 RBC Tier 1 Leverage Capital Q4 2012 – Q4 2013 Regulatory Ratios Page 20 o Capital remains strong while asset growth has been r
Slide 21: Tangible Book Value and ROTCE
Tangible Book Value and ROTCE Q4 2012 - Q4 2013 Page 21 $6.84 $7.04 $7.26 $7.57 $7.89 12.8% 13.9% 16.5% 17.1% 17.2% 8.0% 13.0% 18.0% 23.0% 28.0% $4.00 $6.00 $8.00 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 TBV/Share ROTCE * * * * After adjusting for bank acquisitions and other non-recurring items
Slide 22: Outlook 1st Quarter 2014
Outlook 1st Quarter 2014 o Balance Sheet Growth o Interest Margin o Operating Efficiency o Asset Quality Page 22
Slide 23: Question & Answer
Question & Answer WAL Q4 2013 Earnings Presentation Page 23
Slide 24: 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
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