Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2014 Earnings Presentation
19 slides from Western Alliance Bancorporation's earnings presentation, Oct 16, 2014
Slide 1: 3rd Quarter Earnings Call
(NYSE: WAL) October 17, 2014 Western Alliance Bancorporation 3rd Quarter Earnings Call
Slide 2: Q3 2014 Financial Highlights
2 Q3 2014 Financial Highlights q Q3 2014 net income of $40.9 million, EPS of $0.46, net operating revenue of $103.7 million q Total revenue growth of $4.1 million, compared to a decline in operating expenses of $0.3 million q Loan growth of $385 million to $7.93 billion, deposit growth of $228 milli
Slide 3: Consolidated Financial Results Highlights
3 Consolidated Financial Results Highlights q Year over year, total revenue increased 14.7%, while expenses rose 7.6% q OREO Gains of $2.0 as real estate prices continue to increase $ in millions, except EPS Q3-14 Q2-14 Q3-13 Net Interest Income $ 98.1 $ 93.9 $ 84.6 Operating Non-Interest Income 5.6
Slide 4: Segment Reporting: Q3 2014 Revenue and Pre-tax Income
4 Revenue by Segment - $107.5 million $ in millions California $26.8 24.9% Nevada $32.1 29.9% Arizona $29.2 27.2% Central Business Lines $19.4 18.0% California $13.4 22.7% Nevada $21.2 35.9% Arizona $14.8 25.1% Central Business Lines $9.6 16.3% Pre-tax Income - $59.0 million Segment Reporting: Q3 20
Slide 5: Consolidated Balance Sheet
5 Consolidated Balance Sheet $ in millions q Loan/deposit ratio increased year over year from 89.6% to 91.2% q Allowance for Credit Losses increased $11 million year over year due to loan growth Highlights Q3-14 Q2-14 Q3-13 Investments & Cash $ 1,856 $ 1,986 $ 1,880 Total Loans 7,930 7,545 6,516 All
Slide 6: Segment Reporting: Loans and Deposits Q3 2014
6 Segment Reporting: Loans and Deposits Q3 2014* Loans by Segment - $7.87 billion $ in billions California $2.35 27.5% Nevada $3.19 37.4% Arizona $2.08 24.4% Central Business Lines $0.91 10.7% Deposits by Segment - $8.53 billion California $1.73 22.0% Nevada $1.68 21.3% Arizona $2.20 28.0% Central B
Slide 7: Loan Portfolio Diversification Q3 2014
7 Loan Portfolio Diversification Q3 2014 CRE Investor CRE Owner- Occupied Industrial 5% Office 6% Retail 7% Other 3% Industrial 5% Office 5% Retail 5% Other 4% Commercial Secured 8% Revolving Lines 4% SBA 3% Public Finance 8% < <
Slide 8: Loan Portfolio Distribution Q3 2014
8 In-Footprint 84% Out-of-Footprint 16% Loan Portfolio Distribution Q3 2014 Distribution by Geography In-Footprint Out-of- Footprint Total Arizona 25.9 % 2.1 % 28.0 % California 20.1 % 1.8 % 21.9 % Nevada 20.9 % 0.4 % 21.3 % Public Finance 7.8 % 0.4 % 8.2 % Corporate Finance 1.2 % 4.3 % 5.5 % Equipm
Slide 9: Loan Growth and Portfolio Composition
9 Loan Growth and Portfolio Composition $ in millions Commercial & Industrial CRE, Non- Owner Occupied CRE, Owner Occupied Residential and Consumer Construction & Land Highlights q Total loans increased 21.7%, or $1.41 billion year over year, led by C&I (47.4%, or $1.06 billion) and Construction & L
Slide 10: Deposit Growth and Composition
10 Deposit Growth and Composition $ in millions Non-Int Bearing DDA NOW Savings & MMDA $7,275 $7,838 $8,149 $8,470 $8,698 Growth: +563 +311 +321 +228 Highlights q Total deposits increased 19.5% (or $1.42 billion year over year), mainly Savings & MMDA (20.8%, or $635 million) q Deposits grew $228 mil
Slide 11: Net Interest Drivers
11 Cash and Due from Banks Net Interest Drivers $ in billions Loans and Yield Total Investments and Yield Interest Bearing Deposits and Cost of Funds $ in millions $381 $306 $355 $379 $259 $6.5 $6.8 $7.1 $7.5 $7.9 $1.4 $1.7 $1.7 $1.6 $1.6 $5.3 $5.6 $6.1 $6.2 $6.5
Slide 12: Net Interest Income and Accretion
12 Net Interest Income and Accretion $ in millions Note: Disposition Accretion is the recognition of incremental credit and interest rate marks upon sale or disposition of a PCI loan; Normal Accretion is scheduled amortization of interest rate marks over the estimated remaining life of the loan pool
Slide 13: Operating Expenses and Efficiency
13 Operating Expenses and Efficiency $ in millions Highlights q Efficiency ratio improved 220 basis points quarter over quarter due to increased total revenue and flat expenses q Year over year compensation increased as headcount rose approximately 9.5% in order to service 15.3% growth in assets q P
Slide 14: Pre-Tax, Pre-Provision Operating Income, Net Income, and ROA
14 Pre-Tax, Pre-Provision Operating Income, Net Income, and ROA $ in millions Pre-Tax, Pre-Provision Operating Income and ROA Net Income and ROA $42.1 $43.8 $44.4 $47.4 $51.8 $28.6 $31.4 $31.1 $35.5 $40.9
Slide 15: Adversely Graded Loans and Non-Performing Assets
15 Adversely Graded Loans and Non-Performing Assets Organic Acquired* NPA’s Adversely Graded Loans * Net of credit and interest rate discounts from acquisitions of $11 million and $20 million, respectively, as of 9/30/14 $288 $51 Accruing TDRs total $90 million as of 9/30/2014 $324 $302 $294 $60 $28
Slide 16: Charge-Offs and Provision
16 Charge-Offs and Provision Highlights Gross Charge Offs and Recoveries Net Charge Offs (Recoveries) and Rate Provision for Credit Losses q Recoveries of $3.8 million exceeded gross charge-offs of $1.0 million, resulting in net recoveries of $2.8 million q Annualized net recovery rate was 0.15%, a
Slide 17: Regulatory Capital
17 Regulatory Capital Regulatory Ratios and Tangible Common Equity Proforma Basel III Capital* $ in millions Tangible Common Equity, net of tax 837 Cumulative OCI Related to AFS and other 10 Basel I Tier 1 Common Equity 827 Disallowed FV TRUPS adjustment and DTA (22 ) Basel III Tier 1 Common Equity
Slide 18: Outlook 4th Quarter 2014
18 Outlook 4th Quarter 2014 q Loan and Deposit Growth q Interest Margin q Operational Efficiency q Asset Quality
Slide 19: Forward-Looking Statements
19 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 state
Western Alliance Bancorporation — Q3 2014 Earnings Presentation on 6ix