Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2021 Earnings Presentation
17 slides from Western Alliance Bancorporation's earnings presentation, Oct 21, 2021
Slide 1: Earnings Call 3rd Quarter 2021
EARNINGS CALL 3rd Quarter 2021 OCTOBER 22, 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: 3rd Quarter 2021 Financial Highlights
3rd Quarter 2021 | Financial Highlights Earnings & Profitability Q3-21 Q2-21 Q3-20 Net Income $236.9 $223.8 $135.8 Net Revenue $548.5 $506.5 $305.3 Pre Provision Net Revenue1 $317.1 $277.4 $181.2 EPS – Adjusted1 $2.30 $2.29 $1.36 Net Interest Margin 3.43% 3.51% 3.71% Efficiency Ratio1 41.5% 44.5% 39
Slide 4: Quarterly Income Statement
Quarterly Income Statement Net Interest Income increased $39.9 million, primarily from interest income on loan growth and Loans HFS, partially offset by increased interest expense from Q2-21 Subordinated Debt and Credit Linked Note issuances Non-Interest Income increase driven by $12 million rise in
Slide 5: Net Interest Drivers
Total Investments and Yield Interest Bearing Deposits and Cost Total Loans and Yield Deposits, Borrowings & Cost of Liability Funding Net Interest Drivers 5 • Loan yields decreased 20bps following continued mix shift into residential loans and slight reduction in non-CRE loan yields • Yield on PPP l
Slide 6: Net Interest Income
$284.7 $314.8 $317.3 $370.5 $410.4 3.71% 3.84% 3.37% 3.51% 3.43% 3.79% 3.80% 3.29% 3.51% 3.40% Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Net Interest Income 6 • Net Interest Income increased $39.9 million, or 10.8%, over prior quarter primarily due to growth in both Loans and Loans Held for Sale • Average Earni
Slide 7: Expenses and Efficiency
Expenses and Efficiency1 7 • Efficiency ratio1 decreased 300bps to 41.5% compared to the prior quarter and increased 180bps from the same period last year • Improvement in efficiency ratio1 as net revenue growth outpaced expense growth • Excluding PPP net loan fees and interest, efficiency ratio1 wa
Slide 8: Pre-Provision Net Revenue, Net Income, and ROA
Pre-Provision Net Revenue1, Net Income, and ROA 8 • PPNR1 increased $39.7 million from the prior quarter and $135.9 million, or 75.0%, from the same period last year • PPNR ROA1 increased 14 basis points from the prior quarter and 23 basis points from the same period last year • ROA decreased 3 basi
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet Loans increased $4.8 billion, or 15.9%, over prior quarter and $8.8 billion, or 33.9%, over prior year Deposits increased $3.4 billion, or 8.0%, over prior quarter and $16.4 billion, or 57.0%, over prior year Borrowings increased $313 million over prior quarter from $400 m
Slide 10: Five Quarter Loan Growth and Composition
Five Quarter Loan Growth and Composition 10 $8.8 Billion Year-Over-Year Growth Quarter-over-quarter loan growth of $4.8 billion driven by (in millions): Residential & Consumer $2,332 C&I1 2,240 CRE, Non-OO 148 Construction & Land 87 Offset by decrease in: CRE, OO (31) Total $4,776 Year-over-year loa
Slide 11: Five Quarter Deposit Growth and Composition
$13.0 $13.5 $17.5 $20.1 $21.1 $3.5 $4.4 $3.9 $4.2 $5.0 $10.6 $12.4 $15.3 $15.8 $17.4 $1.7 $1.7 $1.7 $1.8 $1.8 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 CDs Savings and MMDA Interest Bearing DDA Non-Interest Bearing DDA Five Quarter Deposit Growth and Composition 11 $16.4 Billion Year-Over-Year Growth Quarter-ov
Slide 12: Asset Quality
$477 $451 $474 $405 $364 1.83% 1.67% 1.65% 1.35% 1.05% Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 $9 $2 $4 $4 $12 $126 $115 $114 $96 $78 $171 $107 $163 $138 $175 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Asset Quality 12 • Total Classified Assets of $265 million (50bps to Total Assets) increased $27 million in Q3 • Non-Perf
Slide 13: Credit Losses and ACL Ratios
$8.8 $5.7 $2.1 $2.3 $3.3 ($0.6) ($1.8) ($0.7) ($2.2) ($0.3) $311 $279 $247 $233 $247 $44 $37 $33 $31 $32 $6 $7 $9 $6 $5 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Credit Losses and ACL Ratios 13 • Provision expense of $12.3 million, driven by strong loan growth • Total Loan ACL2 / Funded Loans decreased 8bps to
Slide 14: Capital Accumulation
Capital Accumulation 14 Common Equity Tier 1 • CET1 remains strong at 8.7% Tangible Common Equity / Tangible Assets1 • TCE / TA decreased 20bps from the prior quarter to 6.9% due to continued balance sheet growth Regulatory Capital Levels • Exceed “well-capitalized” levels and have rebounded from in
Slide 15: Tangible Book Value Growth
Tangible Book Value Growth 15 Tangible Book Value per Share1 • TBVPS increased $1.81 to $34.67 from prior quarter • Increased 5.5% quarter-over-quarter, unannualized • Increased 19.4% year-over-year • 19.3% CAGR since year end 2015 • TBVPS has increased 2.5x that of peers over the last 5+ years • Qu
Slide 16: Management Outlook
Management Outlook Balance Sheet Growth Net Interest Income Pre-Provision Net Revenue Capital and Liquidity 16
Slide 17: Questions & Answers
Questions & Answers
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