Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q4 2019 Earnings Presentation
18 slides from Western Alliance Bancorporation's earnings presentation, Jan 24, 2020
Slide 1: Earnings Call 4th Quarter 2019
EARNINGS CALL 4th QUARTER 2019 January 24, 2020
Slide 2: Financial Highlights
Financial Highlights Q4 2019 • Net income of $128.1 million ($1.25 per share), compared to $127.4 million ($1.24 per share) for Q3 2019 , and $119.1 million ($1.13 per share) for Q4 2018 • Net interest margin1 of 4.39%, a decrease from 4.41% in Q3 2019, and a decrease from 4.68% in Q4 2018 • Operati
Slide 3: Annual Consolidated Financial Results
Annual Consolidated Financial Results $ in millions, except EPS 2019 Highlights 2019 2018 Interest Income $ 1,225.0 $ 1,033.5 • Net Interest Income increased $124.5 million as a result of loan Interest Expense (184.6) (117.6) growth, partially offset by higher Net Interest Income $ 1,040.4 $ 915.9 r
Slide 4: Quarterly Consolidated Financial Results
Quarterly Consolidated Financial Results $ in millions, except EPS Q4 2019 Highlights Q4-19 Q3-19 Q4-18 Interest Income $ 315.4 $ 315.6 $ 282.0 • Net Interest Income increased Interest Expense (43.4) (49.2) (38.5) $5.6 million primarily as a result of loan growth outweighing Net Interest Income $ 27
Slide 5: Net Interest Drivers
Net Interest Drivers1 $ in billions, unless otherwise indicated Total Investments and Yield Loans and Yield Q4 2019 Highlights 5.92% 6.02% 5.98% • Flattening yield curve reduced 5.79% investment portfolio yields and 3.46% 3.47% 5.58% 3.34% incremental yield on new loans 3.08% 2.96% • Loan yields dec
Slide 6: Net Interest Income
Net Interest Income $ in millions Net Interest Income1, NIM2, and Highlights Average Interest Earning Assets • NIM declined 2 basis points from the prior quarter, driven by the loan mix shift $272.0 $266.4 $254.7 • Net Interest Income for the quarter grew through the $243.5 $247.3 NIM compression by
Slide 7: Interest Rate Environment
Interest Rate Environment Percentage Increase/(Decrease) to Net Interest Income Q4 2019 Highlights Down 100bps • Nearly 68% of loans are variable rate Scenario ◦ $9.7 billion, or 68%, of variable rate loans Shock Ramp1 have interest rate floors ◦ 35% of variable rate loans (with floors) are at their
Slide 8: Operating Expenses and Efficiency
Operating Expenses and Efficiency1 $ in millions Operating Expenses and Efficiency Ratio Q4 2019 Highlights • The operating efficiency ratio1 increased 140 43.8% basis points to 43.8% compared to the prior quarter and 230 basis points over the same 42.4% 42.4% period last year 42.0% 41.5% • Decrease
Slide 9: Operating Pre-Provision Net Revenue, Net Income, and ROA
Operating Pre-Provision Net Revenue1, Net Income, and ROA2 $ in millions Q4 2019 Highlights • Operating PPNR ROA1 decreased 6 basis points from the prior quarter 2.63% 2.58% 2.54% and 25 basis points from Q4-18 2.44% 2.38% 2.12% • Decline in Operating PPNR ROA1 2.11% 2.05% 1.94% 1.92% from Q4-18 was
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet $ in millions Q4-19 Q3-19 Q4-18 Q4 2019 Highlights Investments & Cash $ 4,471 $ 5,020 $ 4,260 • Loans increased $970 million Loans 21,123 20,153 17,711 (4.8%) over prior quarter and $3.4 Allowance for Credit Losses (168) (165) (153) billion (19.3%) over prior year Other As
Slide 11: Five Quarter Loan Growth and Portfolio Composition
Five Quarter Loan Growth and Portfolio Composition $ in billions, unless otherwise indicated $3.4 Billion Year Over Year Growth Highlights Total Loans $17.7 $18.1 $19.3 $20.2 $21.1 Quarter-over-quarter loan growth of Qtr Change +$1.0 +$0.4 +$1.1 +$0.9 +$1.0 $1.0 billion driven by (in millions): C&I
Slide 12: Five Quarter Deposit Growth and Composition
Five Quarter Deposit Growth and Composition $ in billions, unless otherwise indicated $3.6 Billion Year Over Year Growth Highlights Total Deposits $19.2 $20.2 $21.4 $22.4 $22.8 Quarter-over-quarter deposit growth Qtr Change +$0.3 +$1.0 +$1.2 +$1.0 +$0.4 of $0.4 billion driven by (in millions): CDs $
Slide 13: Adversely Graded Loans and Non-Performing Assets
Adversely Graded Loans and Non-Performing Assets1 $ in millions $439 Asset Quality Ratios $399 $358 $341 $316 $234 $134 $198 $89 Adversely $180 Graded Loans 1.64% 1.72% 1.57% $162 1.43% 1.31% $181 $131 $139 $91 NPAs $44 $52 $50 $56 0.20% 0.26% 0.27% 0.25% 0.26% $28 $18 $18 $18 $16 $14 Q4-18 Q1-19 Q2
Slide 14: Credit Losses and Allowances
Credit Losses and Allowances $ in millions Gross Charge-Offs and Recoveries ALLL, Reserve for Unfunded Commitments, and Credit Discounts $4.1 $2.3 $2.6 $2.1 $2.2 $184 $180 $181 $176 $177 $7 $(0.8) $(1.1) $(1.0) $(2.7) $(0.9) $7 $11 $9 $15 $13 $9 $9 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 $9 $8 Gross Charge-Of
Slide 15: Superior Capital and Tangible Book Value Growth
Superior Capital and Tangible Book Value Growth Robust Capital Levels Growth in TBV per Share 243% 237% 10.6% 10.3% 81% 8.8% 61% 7.4% 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 MRQ 1 CET1 TCE WAL WAL with Dividends Added Back Peer Avg Peer Avg with Dividends Added Back 15 Note:
Slide 16: Management Outlook
Management Outlook • Loan and Deposit Growth • Interest Margin • Operating Leverage • Asset Quality • Earnings 16 16 16
Slide 17: Questions and Answers
Questions and Answers WA Western Alliance Bancorporation® 17
Slide 18: 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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