Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q2 2021 Earnings Presentation
16 slides from Western Alliance Bancorporation's earnings presentation, Jul 15, 2021
Slide 1: Earnings Call 2nd Quarter 2021
EARNINGS CALL 2nd Quarter 2021 JULY 16, 2021
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: 2nd Quarter 2021 Financial Highlights
2nd Quarter 2021 | Financial Highlights Earnings & Profitability Q2-21 Q1-21 Q2-20 Net Income $223.8 $192.5 $93.3 Net Revenue $506.5 $337.0 $319.7 Pre Provision Net Revenue1 $277.4 $202.4 $204.9 EPS – Adjusted1 $2.29 $1.90 $0.93 Net Interest Margin 3.51% 3.37% 4.19% Efficiency Ratio1 44.5% 39.0% 35.
Slide 4: Quarterly Income Statement
Quarterly Income Statement Net Interest Income increased $53.2 million, primarily from interest income on AMH Loans HFS and loan growth, partially offset by increased interest expense from $600 million subordinated debt issuance and assumption of AMH borrowings Non-Interest Income increased $116.3 m
Slide 5: Net Interest Drivers
Total Investments and Yield Interest Bearing Deposits and Cost Total Loans and HFI Yield Deposits, Borrowings & Cost of Liability Funding Net Interest Drivers 5 • Loans, HFI yields decreased 11bps following continued mix shift into residential loans and slight reduction in non-CRE loan yields, inclu
Slide 6: Net Interest Income
$298.4 $284.7 $314.8 $317.3 $370.5 4.19% 3.71% 3.84% 3.37% 3.51%4.12% 3.79% 3.80% 3.29% 3.51% Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Net Interest Income 6 • Net Interest Income increased $53.2 million, or 16.8%, over prior quarter primarily due to funding Loans HFS on- balance sheet • NIM increased 14bps, dr
Slide 7: Expenses and Efficiency
Expenses and Efficiency1 7 • Efficiency ratio1 increased 550 bps to 44.5% compared to the prior quarter and 940bps from the same period last year • Higher efficiency ratio1 was driven mainly by the addition of AMH employees and an increase in incentive compensation • Excluding PPP net loan fees and
Slide 8: Pre-Provision Net Revenue, Net Income, and ROA
Pre-Provision Net Revenue1, Net Income, and ROA 8 • PPNR1 increased $75.0 million from the prior quarter, $72.5 million or 35.4% from the same period last year • PPNR ROA1 increased 28 basis points from the prior quarter and decreased 38 basis points from the same period last year • ROA decreased 7
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet Acquisition of AmeriHome resulted in an increase in mortgage servicing rights of $0.7 billion and the recognition of approximately $175 million of goodwill and $139 million of intangible assets Loans, HFI increased $1.3 billion, or 4.6%, over prior quarter and $5.0 billion
Slide 10: Five Quarter Loan Growth and Composition
Five Quarter Loan Growth and Composition 10 $5.0 Billion Year-Over-Year Growth Quarter-over-quarter loan growth of $1.3 billion driven by (in millions): Residential & Consumer $2,022 Construction & Land 89 CRE, Non-OO 14 Offset by decrease in: C&I1 (786) CRE, OO (24) Total $1,315 Year-over-year loan
Slide 11: Five Quarter Deposit Growth and Composition
$12.2 $13.0 $13.5 $17.5 $20.1 $3.5 $3.5 $4.4 $3.9 $4.2 $9.8 $10.6 $12.4 $15.3 $15.8 $2.0 $1.7 $1.7 $1.7 $1.8 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 CDs Savings and MMDA Interest Bearing DDA Non-Interest Bearing DDA Five Quarter Deposit Growth and Composition 11 $14.4 Billion Year-Over-Year Growth Quarter-ove
Slide 12: Asset Quality
$396 $477 $451 $474 $405 1.58% 1.83% 1.67% 1.65% 1.35% Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 $9 $9 $2 $4 $4 $140 $146 $115 $114 $96 $149 $171 $107 $163 $138 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Asset Quality 12 • At quarter end, Total Deferrals were $49.8MM (17bps of Total Loans); comprised of low LTV residential
Slide 13: Credit Losses and ACL Ratios
$5.7 $8.8 $5.7 $2.1 $2.3 ($0.2) ($0.6) ($1.8) ($0.7) ($2.2) $311 $311 $279 $247 $233 $36 $44 $37 $33 $31 $7 $6 $7 $9 $6 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Credit Losses and ACL Ratios 13 • Provision expense release of $14.5 million, driven by improved macroeconomic factors, offset by loan growth in lower
Slide 14: Capital Accumulation
Capital Accumulation 14 Common Equity Tier 1 • CET1 remains strong at 9.2% Tangible Common Equity / Tangible Assets1 • TCE / TA decreased 80bps from the prior quarter to 7.1%, primarily due to AMH acquisition Capital Actions • Issued 700K shares under ATM offering • Issued $242M of credit-linked not
Slide 15: Management Outlook
Management Outlook Balance Sheet Growth Interest Margin Pre-Provision Net Revenue Asset Quality Capital and Liquidity 15
Slide 16: Questions & Answers
WA se Questions & Answers
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