Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q1 2013 Earnings Presentation
23 slides from Western Alliance Bancorporation's earnings presentation, Apr 19, 2013
Slide 1: Western Alliance Bancorporation 1st Quarter Earnings Call
(NYSE: WAL) April 19, 2013 Western Alliance Bancorporation 1st Quarter Earnings Call
Slide 2: Q1 2013 Financial Performance
Q1 2013 Financial Performance oSustained Income Growth –Reported EPS of $0.24 up from $0.12 in Q1 2012 and $0.22 in Q4 2012 after excluding the bargain purchase gain of $0.15 from the Western Liberty acquisition –Net Interest Margin of 4.36% compared to 4.48% in Q4 2012, after excluding seven basis
Slide 3: Centennial Bank Acquisition
Centennial Bank Acquisition 3 oFinal regulatory approval received on April 10; transaction expected to close on April 30 oAs of March 31, 2013, Centennial reported the following: –Assets $529 million –Loans $413 million –Allowance for Loan Loss $12 million –Deposits $341 million –Tangible Equity $10
Slide 4: Loan Growth and Portfolio Composition
Loan Growth and Portfolio Composition $ in millions $381 $929 Million Year Over Year Growth Commercial CRE, Owner Occupied CRE, Non-Owner OccupiedConstruction & Land Residential and Consumer •Commercial loans have increased from 29% to nearly 36% of the portfolio since Q1 12 •Q4 12 included $91 mill
Slide 5: Deposit Growth and Portfolio Composition
Deposit Growth and Portfolio Composition $ in millions $836 Million Year Over Year Growth MMDA NOW CDs Non-Int Bearing DDA $1,758 $1,842 $1,841 $1,933 $1,930 $2,224 $2,438 $2,541 $2,574 $2,827 $527 $541 $515 $582 $620 $1,390 $1,180 $1,265 $1,366 $1,358 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $5,899 $6,001 $6,
Slide 6: Potential Problem Loans and Non-Performing Assets
6 Potential Problem Loans and Non-Performing Assets $ in millions $81 $77 $78 $77 $78 $105 $105 $123 $106 $95 $97 $135 $116 $111 $96 $133 $92 $100 $104 $126 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 OREO Non-Performing Loans Classified Accruing Loans (1) Watch Loans $416 $409 $417 $398 $395* * Includes $20 mill
Slide 7: Consolidated Balance Sheet
Consolidated Balance Sheet $ in millions Consistent Asset Growth •Assets grew 18% or $1,249 million from Q1 12 to Q1 13 •Shareholders’ Equity grew 19.3% or $127 million during the same period •Tangible Book Value/Share grew 21.6% from $5.79 to $7.04 •Assets increased $200 million as a result of a 5-
Slide 8: Consolidated Financial Results
8Consolidated Financial Results (excluding Q4 12 bargain purchase gain) Consistent Earnings Growth •EPS increased $0.02 from Q4 2012 EPS of $0.22 after excluding $0.15 for the Western Liberty bargain purchase gain •Decline in Net Interest Income primarily because of two fewer days in Q1 2013 compare
Slide 9: EPS Walkforward Q1 2012 – Q1 2013
9 EPS Walkforward Q1 2012 – Q1 2013 Components of Changes in Earnings Per Share $0.12 $0.05 ($0.02) $0.07 $0.01 $0.02 ($0.01) $0.24 Q1 2012 EPS Net Interest Income (Asset Growth) Provision Expense Tax Strategies Q1 2013 EPS 9 Operating Expense Decline in Preferred Dividend Rates Impact of Higher Dil
Slide 10: Net Interest Income and NIM
10 $27.8 $27.5 $27.7 $30.1 $29.3 4.37% 4.32% 4.28% 4.50% 4.16% 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% 5.2% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $23.1 $24.1 $24.5 $26.7 $26.6 4.47% 4.46% 4.56% 4.58% 4.42% $15 $19 $23 $27 $31 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $21.2 $21.4 $21.8 $22.2 $20.8 5.19% 5.16% 5.18% 5.05% 4.84% Q1
Slide 11: WAL Consolidated Net Interest Drivers
$4.9 $5.2 $5.3 $5.7 $5.9 5.68% 5.50% 5.42% 5.60% 5.39% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $180 $179 $168 $205 $422 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $1.4 $1.4 $1.3 $1.2 $1.3 3.13% 3.15% 3.17% 3.25% 3.21% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $4.2 $4.2 $4.3 $4.5 $4.8 0.46% 0.40% 0.38% 0.35% 0.32% Q1-12 Q2-12 Q3-12 Q4
Slide 12: Operating Expense and Efficiency Ratio
12 Operating Expense and Efficiency Ratio $ in millions $17.1 $17.4 $16.7 $16.8 $17.4 52.8% 54.4% 52.1% 48.0% 50.5% 40% 45% 50% 55% 60% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $11.5 $11.7 $11.9 $12.9 $13.1 45.8% 44.2% 45.9% 45.2% 45.1% $6 $8 $10 $12 $14 $16 $18 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $11.1 $11.1 $11.1
Slide 13: Pre-Tax Pre-Provision Income and ROA
13 Pre-Tax Pre-Provision Income and ROA $ in millions $14.4 $13.7 $14.2 $16.7 $15.3 2.00% 1.92% 1.93% 2.21% 1.92% 1.5% 2.0% 2.5% 3.0% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $13.1 $14.0 14.1 $15.2 $15.3 2.36% 2.41% 2.30% 2.42% 2.36% $8 $10 $12 $14 $16 $18 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $11.4 $11.4 $11.8 $12.2
Slide 14: Net Income and ROA
14 Net Income and ROA $ in millions $1.0 $3.8 $5.8 $7.6 $10.7 0.13% 0.53% 0.79% 0.99% 1.34% 0.0% 0.5% 1.0% 1.5% 2.0% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $9.8 $7.8 $8.8 $10.4 $8.5 1.77% 1.34% 1.47% 1.63% 1.31% $0 $2 $4 $6 $8 $10 $12 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 $5.8 $5.1 $6.4 $5.2 $6.4 1.28% 1.13% 1.30% 0
Slide 15: Pass Credits and Loan Grades Q1 2012 – Q1 2013
15 Pass Credits and Loan Grades Q1 2012 – Q1 2013 -$23 $92 $378 $605 -$104 -$7 -$12 $0 $0 1 2 3 4 5 6 7 8 9 Change by Loan Grade Q1 2012 – Q1 2013 Pass Watch Composition of Pass Credits 3/31/12 Grade 1, 1.1% Grade 2, 6.9% Grade 3, 16.9% Grade 4, 35.1% Grade 5, 39.9% Grade 1, 0.5% Grade 2, 7.3% Grade
Slide 16: Net Charge-Offs and Provision Q1 2012 – Q1 2013
16 Net Charge-Offs and Provision Q1 2012 – Q1 2013 $14.1 $13.9 $9.0 $13.5 $5.4 1.18% 1.11% 0.7% 0.99% 0.38% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Affinity Card Mark to Fair Value ($2.6 mil) WAB TPB BON Charge-Off Rate $0.7 $3.3 $3.0 $4.2 $2.2 $12.4 $10.0 $6.0 $7.3 $3.2 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Other Al
Slide 17: Charge-Offs By Vintage and Remaining Balances
Charge-Offs By Vintage and Remaining Balances $ in millions $7 $15 $19 $82 $143 $286 $293 $450 $441 $361 $510 $1,014 $1,731 $457 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $2.4 $2.4 $2.1 $5.3 $25.9 $65.2 $123.3 $94.7 $63.4 $4.3 $2.8 $0.2 $0.2 $0.0 2000 2001 2002 2003 2004
Slide 18: Investor CRE & Construction: Year of Origination and Charge-Off
2000-2013 Investor CRE & Construction: Year of Origination and Charge-Off $ in millions WAL has incurred $1 million in losses on Investor CRE and Construction loans originated since 2008 18
Slide 19: Q1 2013 OREO Summary
Q1 2013 OREO Summary $ in millions OREO Valuation at end of Q4 12$76.5Q1-13 Changes:Additions to OREO6.9Sales of OREO (cash proceeds)-5.3Valuation Adjustments/Gain(Loss) on Sale-0.9OREO Valuation at end of Q1 13$77.2Net OREO Sale Proceeds/Book Value102.5%Original Loan Amount - Land$119.7Original App
Slide 20: Regulatory Capital Q1 2012 – Q1 2013
Regulatory Capital Q1 2012 – Q1 2013 $5.79 $6.01 $6.35 $6.84 $7.04 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Tangible Book Value/Share 12.5% 12.3% 12.3% 12.6% 12.6% 8.1% 8.0% 8.1% 8.6% 8.6% 11.3% 11.0% 11.0% 11.3% 11.3% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Total RBC Tier 1 Common Tier 1 RBC Regulatory Ratios 20
Slide 21: Outlook 2nd Quarter 2013
Outlook 2nd Quarter 2013 oBalance Sheet Growth oNet Interest Margin oEfficiency Ratio oAsset Quality oAcquisition Integration 21
Slide 22: Question & Answer
Question & Answer 22 WAL Q1 2013 Earnings Presentation
Slide 23: 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. The forward-looking statements conta
Western Alliance Bancorporation — Q1 2013 Earnings Presentation on 6ix