Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q1 2024 Earnings Presentation
21 slides from Western Alliance Bancorporation's earnings presentation, Apr 19, 2024
Slide 1: Earnings Call 1st Quarter 2024
EARNINGS CALL 1st Quarter 2024 April 19, 2024
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: Highlights: 1st Quarter 2024 Financial Highlights
Highlights 1st Quarter 2024 | Financial Highlights Net Income EPS Earnings & Profitability Q1 20241 Q4 2023 Q1 2023 Earnings per Share $ 1.60 / $1.72 $ 1.33 $ 1.28 $177.4 million $1.60 1 Net Income $ 177.4 /$190.9 $ 147.9 $ 142.2 or $190.9 million or $1.721 Net Revenue $728.8 $ 682.2 $ 551.9 Pre-Pro
Slide 4: Quarterly Income Statement
Q1 2024 Highlights Quarterly Income StatementQ1-24 Net Interest Income increased $7.2 million primarily from Q4-23 Q1-23 1 higher earning asset balances and lower average borrowings Interest Income $ 1,055.0 $ 1,039.0 $ 968.9 Interest Expense (456.1) (447.3) (359.0) Non-Interest Income increased $39
Slide 5: Consolidated Balance Sheet
Q1 2024 Highlights Consolidated Balance Sheet Q1-24 Q4-23 Q1-23 Securities & Cash increased $5.4 billion, or 37.5%, Securities & Cash $ 19,642 1 $ 14,288 $ 12,744 1 to $19.6 billion and increased $6.9 billion, or 54.1%, Loans, HFS 1,841 1,402 7,022 over prior year Loans, HFI 50,700 2 50,297 46,435 L
Slide 6: Five Quarter Loan Composition
Q1 2024 Highlights Five Quarter Loan Composition Quarter-over-quarter loan increase of $403 million driven by (in millions): $4.3 Billion Year Over Year Growth C&I $646 Total Loans, HFI $46.4 $47.9 $49.4 $50.3 $50.7 CRE, OO 49 Offset by decrease in: Qtr Change -$5.4 +$1.4 +$1.6 +$0.9 +$0.4 Q1-24 Avg
Slide 7: Five Quarter Deposit Composition
Q1 2024 Highlights Five Quarter Deposit Composition Quarter-over-quarter deposit growth of $6.9 $14.6 Billion Year Over Year Growth billion as follows (in millions): Non-Interest Bearing DDA $3,879 Total Deposits $47.6 $51.0 $54.3 $55.3 $62.2 Interest-Bearing DDA 1,049 Qtr Change $-6.1 +$3.5 +$3.2 +
Slide 8: Net Interest Drivers
Q1 2024 Highlights Net Interest Drivers Securities Portfolio and Yield Loans and HFI Yield • Loan yields increased 12 bps due to asset repricing in 6.73% 6.65% 6.77% higher rate environment 6.28% 6.48% 4.99% 4.68% 4.76% 4.91% 4.66% • Loans, HFI growth back-weighted to end of $1.8 $1.4 $1.8 quarter:
Slide 9: Net Interest Income
Q1 2024 Highlights Net Interest Income Net Interest Income and Net Interest Margin Average Earning Assets & Average Yield • Net Interest Income increased $7.2 million, or 1.2%, primarily due to a higher average earning assets balance Dollars in millions Dollars in billions and lower average short-te
Slide 10: Non-Interest Expenses and Efficiency
1 Q1 2024 Highlights Non-Interest Expenses and Efficiency • Adjusted efficiency ratio1 (excluding deposit costs Non-Interest Expenses and Efficiency Ratio Breakdown of Non-Interest Expenses and FDIC special assessment) increased 720 bps to 54.4%, driven primarily by the gain on debt 66.8% 65.2% FDIC
Slide 11: Asset Quality
Q1 2024 Highlights Asset Quality Special Mention Loans Asset Quality Ratios • Asset quality remained stable, as the aggregate net decrease in Special Mention Loans and 1.45% 1.35% 1.27% Classified Assets was $139 million 0.69% 0.78% 1.01% • Special Mention Loans decreased $247 million 0.89% 0.90% 0.
Slide 12: Credit Losses and ACL Ratios
Q1 2024 Highlights Credit Losses and ACL Ratios Allowance for Credit Losses Gross Loan Charge-offs and Recoveries • Provision Expense of $15.2 million, primarily reflective of loan growth, net charge-offs and a $9 $10 $11 $9 $10 Gross Charge-Offs Recoveries stable economic outlook $41 $38 $32 $33 $4
Slide 13: Capital Accumulation
Q1 2024 Highlights Capital Accumulation Common Capital Levels Regulatory Capital Levels 11.0% • Continue to exceed “well-capitalized” levels 10.6% 10.8% 10.1% • CET1 up 20 bps to 11.0% 9.4% Tangible Common Equity / Tangible Assets1 7.3% 7.0% 6.8% 6.8% • TCE / TA decreased to 6.8% due to asset growth
Slide 14: Tangible Book Value Growth
Q1 2024 Highlights Tangible Book Value Growth Long-Term Growth in TBV per Share1 Tangible Book Value per Share1 • TBVPS increased $0.58 to $47.30 from 6x WAL 573% organic earnings WAL with Dividends Added Back Peer Median • Increased 1.2% quarter-over-quarter, 500% Peer Median with Dividends Added B
Slide 15: Management Outlook
Management Outlook Reference Period Baseline 2024 Outlook Loans (HFI): $50.3 bn Loans (HFI): +$4.0 bn Balance Sheet Growth YE 2023 Deposits: $55.3 bn Deposits: +$11.0 bn Capital (CET1) YE 2023 10.8% >11.0% Net Interest Income Q4 2023 Ann. $2.37 bn Up 5% - 10% • Assumes (2) 25 bp fed funds cuts in H2
Slide 16: Questions & Answers
Questions & Answers
Slide 17: Appendix
NVA Western Alliance Bancorporation® Appendix
Slide 18: Key Reserve Level Ratios
Q1 2024 Highlights Key Reserve Level Ratios Reserve levels enhanced by credit protection and low loss loan categories • WAL remains appropriately reserved, especially when considering credit protection from CLNs and historically low loss loan categories Adjusted Total Loan ACL / Funded Loans: Q1-24
Slide 19: Commercial Real Estate Investor Statistics
Commercial Real Estate Investor Statistics CRE Investor Portfolio ($9.6 billion; 19% of Total Loans) Underwriting Criteria and Mitigating Factors • Low LTV & LTC (50% to low 60%) range underwriting in areas 59% 58% minimizes tail risk 52% 48% 48% 49% • Simple capital structure - no junior liens or m
Slide 20: Commercial Real Estate Investor: Office
Commercial Real Estate Investor: Office $2.5 Billion; 26% of Total CRE Investor; 5% of Total Loans Distribution by LTV Underwriting Criteria and Mitigating Factors 37% • Primarily shorter-term bridge loans for repositioning or redevelopment projects • Strong sponsorship from institutional equity and
Slide 21: Superior Deposit Liquidity and Fortified Adjusted Capital
Superior Deposit Liquidity and Fortified Adjusted Capital Excellent Combined Insured/Collateralized Deposits & CET1 Capital Adjusting for AOCI Securities Marks Insured Deposits % vs. CET1 Adj. (Incl. of AOCI Unrealized Securities Marks) for Top 50 Banks by Assets 85% OZK WAL Adj. CET1: 10.0% (Q1-24)
Western Alliance Bancorporation Common Stock (DE) — Q1 2024 Earnings Presentation on 6ix