Western Alliance Bancorporation · NYSE:WAL

Western Alliance Bancorporation — Q1 2018 Earnings Presentation

16 slides from Western Alliance Bancorporation's earnings presentation, Apr 19, 2018

  1. Slide 1: Earnings Call 1st Quarter 2018

    EARNINGS CALL 1st QUARTER 2018 April 20, 2018

  2. Slide 2: 1st Quarter 2018 Financial Highlights

    2 2 1st Quarter 2018 | Financial Highlights ▪ Net income of $100.9 million ($0.96 per share), compared to $89.3 million ($0.85 per share) for Q4 2017, and $73.3 million ($0.70 per share) for Q1 2017 ▪ Net interest margin of 4.60%, compared to 4.73% in Q4 2017, and 4.63% in Q1 2017 ▪ Operating effici

  3. Slide 3: Quarterly Consolidated Financial Results

    3 3 $ in millions, except EPS Q1 2018 Highlights ▪ Net Interest Income increased $3.2 million as a result of loan growth, offset by higher rates on MMDA and interest expense on FHLB advances ▪ Operating Non-Interest Expense increased $3.9 million primarily from increased seasonal compensation costs

  4. Slide 4: Interest Bearing Deposits and Cost of Funds; Loans and Yield

    4 4 Interest Bearing Deposits and Cost of Funds Loans and Yield Deposits, Borrowings, and Cost of Liability Funding Q1 2018 Highlights ▪ Loan yield decreased 13 basis points largely due to a decrease in the tax equivalent adjustment ("TEA") and acquired loan accretion ▪ Cost of interest-bearing depo

  5. Slide 5: Net Interest Income, NIM, and Acquired Loan Accretion

    5 5 Q1 2018 Highlights ▪ NIM decreased 13 basis points to 4.60% quarter- over-quarter due to a decrease in the tax equivalent adjustment and higher rates on deposit accounts, partially offset by the favorable impacts of rising short-term interest rates Net Interest Income, NIM, and Average Interest

  6. Slide 6: Operating Expenses and Efficiency

    6 6 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $51.6 $52.3 $52.7 $57.7 $62.1 $10.1 $10.5 $11.0 $10.2 $10.7$14.1 $12.9 $10.6 $11.6 $11.2$12.6 $12.5 $14.7 $16.0 $15.3 Breakdown of Operating Expenses Operating Expenses and Efficiency Q1 2018 Highlights ▪ The operating efficiency ratio increased from 40.7% in Q4 201

  7. Slide 7: Operating Pre-Provision Net Revenue, Net Income, and ROA

    7 7 Net Income and ROA Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $73.3 $80.0 $82.8 $89.3 $100.91.69% 1.71% 1.71% 1.79% 1.99% Operating Pre-Provision Net Revenue and Operating PPNR ROA Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $100.9 $115.2 $122.7 $127.8 $127.6 2.32% 2.46% 2.53% 2.57% 2.51% $ in millions Operating Pre-Provi

  8. Slide 8: Q1 2018 Balance Sheet Highlights

    8 8 ▪ Loans increased $466 million (3.1%) over prior quarter and $1.90 billion (13.9%) over prior year ▪ Deposits increased $382 million (2.3%) over prior quarter and $2.00 billion (12.9%) over prior year ▪ Shareholders' Equity increased $64 million over prior quarter and $325 million over prior yea

  9. Slide 9: 5 Quarter Loan Growth and Portfolio Composition

    9 9 Highlights$1.90 Billion Year Over Year Growth Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $6,057 $6,321 $6,738 $6,841 $6,944 $2,043 $2,035 $2,062 $2,242 $2,265 $3,608 $3,649 $3,628 $3,904 $3,925 $1,602 $1,602 $1,666 $1,632 $1,950$353 $383 $428 $475 $469 2.6% 15.0% 26.4% 44.3% 11.7% 3.0% 14.6% 25.2% 44.6% 12.5

  10. Slide 10: 5 Quarter Deposit Growth and Composition

    10 10 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $6,114 $6,859 $7,609 $7,434 $7,502 $1,449 $1,481 $1,406 $1,586 $1,776 $6,254 $6,104 $6,300 $6,331 $6,315 $1,539 $1,587 $1,590 $1,622 $1,762 9.4% 10.0% 39.8% 40.7% 10.2% 10.2% 43.2% 36.4% $2.00 Billion Year Over Year Growth CDs Savings and MMDA Interest Bearing DDA

  11. Slide 11: Adversely Graded Loans and Non-Performing Assets

    11 11 Adversely Graded Assets to Total Assets NPAs to Total Assets Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 2.25% 2.04% 2.12% 1.85% 1.83% 0.44% 0.32% 0.42% 0.36% 0.33% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $45 $31 $29 $28 $30 $34 $30 $55 $44 $37 $133 $166 $122 $128 $127 $175 $141 $200 $155 $185 NPAs Adversely Graded L

  12. Slide 12: Charge-Offs, Recoveries, ALLL, and Provision

    12 12 Gross Charge-Offs Recoveries Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Credit Discounts CD/Acquired Loans Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $45.1 $37.8 $32.7 $27.0 $23.1 2.46% 2.19% 2.02% 1.86% 1.73% Provision for Credit Losses Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 $4.3 $3.0 $5.0 $5.0 $6.0 ALLL ALLL/Total Organic Loa

  13. Slide 13: ROTCE, TBV/Share and Capital Ratios

    13 13 ROTCE and TBV/ShareCapital Ratios ROTCE TBV/Share Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 17.8% 18.4% 18.2% 18.8% 20.5% $15.86 $16.71 $17.53 $18.31 $18.86 Total Capital Common Equity Tier 1 Tier 1 Leverage Tangible Common Equity Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 13.1% 13.3% 13.3% 13.3% 13.2% 10.0% 10.3% 10.

  14. Slide 14: Management Outlook

    14 14 ▪ Financial Position ▪ Margin ▪ Operating Leverage ▪ Asset Quality ▪ Tax Rate Management Outlook

  15. Slide 15: Questions and Answers

    Questions and Answers ) D Western Alliance oo

  16. Slide 16: Forward-looking statements

    16 16 16 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 statements include, among

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