Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q4 2014 Earnings Presentation
19 slides from Western Alliance Bancorporation's earnings presentation, Jan 22, 2015
Slide 1: 4th Quarter Earnings Call
(NYSE: WAL) January 23, 2015 Western Alliance Bancorporation 4th Quarter Earnings Call
Slide 2: Financial Highlights
2 Financial Highlights Q4 2014 Highlights q Q4 2014 net income of $40.4 million, EPS of $0.46, net operating revenue of $109.0 million q Net operating revenue growth quarter-over-quarter of $5.3 million, compared to an increase in operating expenses of $5.0 million q Loan growth quarter-over-quarter
Slide 3: Quarterly Consolidated Financial Results Highlights
3 Quarterly Consolidated Financial Results Highlights q Year over year improvements in net operating revenue of 14.5% and pre-tax pre-provision income of 18.7% resulted in a 28.7% increase in net income q Provision for credit losses declined as the Company realized net recoveries during the current
Slide 4: Annual Consolidated Financial Results Highlights
4 Annual Consolidated Financial Results Highlights q Net operating revenue increased 15.5%, while expenses increased 10.6%, resulting in improved operating leverage q Pre-tax, pre-provision income increased 21.4% and net income increased 28.7%, substantially as a result of improved operating leverag
Slide 5: Net Interest Drivers
5 Cash and Due from Banks Net Interest Drivers Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $306 $355 $379 $259 $164 $ in billions Loans and Yield Total Investments and Yield Interest Bearing Deposits and Cost of Funds $ in millions Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 3.11% 3.15% 3.08% 3.11% 3.07% $1.7 $1.7 $1.6 $1.6 $1
Slide 6: Net Interest Income and Accretion
6 Net Interest Income and Accretion $ in millions Note: Disposition Accretion is the recognition of incremental credit and interest rate marks upon sale, disposition or transfer to OREO of a PCI loan; Normal Accretion is scheduled amortization of interest rate marks over the estimated remaining life
Slide 7: Operating Expenses and Efficiency
7 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $6.4 $7.1 $6.4 $6.5 $7.1 $6.7 $6.3 $6.6 $5.1 $5.4 $8.2 $9.1 $7.4 $8.2 $11.4 Operating Expenses and Efficiency $ in millions Highlights q Other expenses increased quarter over quarter as a result of a contribution to the WAL charitable foundation and increased marketin
Slide 8: Pre-Tax, Pre-Provision Operating Income, Net Income, and ROA
8 Pre-Tax, Pre-Provision Operating Income, Net Income, and ROA $ in millions Pre-Tax, Pre-Provision Operating Income and ROA Net Income and ROA Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $43.8 $44.4 $47.4 $51.8 $52.0 1.93% 1.90% 1.95% 2.06% 2.00% Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $31.4 $31.1 $35.5 $40.9 $40.4 1.38%
Slide 9: Consolidated Balance Sheet
9 Consolidated Balance Sheet $ in millions q Allowance for Credit Losses increased $10 million year over year as net recoveries augmented the provision in boosting the reserve q Shareholders' Equity declined $2 million quarter over quarter as the increase from retained earnings and OCI was offset by
Slide 10: Loan Portfolio Distribution Q4 2014
10 Consumer 1% Community Association Lending 1% Leasing 1% Unsecured 1% Hotel 1% Multifamily 2% Loan Portfolio Distribution Q4 2014 Public Finance 10% CRE Investor CRE Owner- Occupied Commercial Other 3% Retail 7% Office 6% Industrial 5% Other 4% Retail 4% Office 4% Industrial 4% Revolving Lines 4%
Slide 11: Loan Portfolio Distribution by Geography
11 Distribution by Geography In-Footprint Out-of-Footprint Total Arizona 25.8% 2.2% 28.0% California 19.1 1.8 20.9 Nevada 19.7 0.3 20.0 Public Finance 8.6 0.9 9.5 Corporate Finance 1.0 4.4 5.4 Equipment Finance 3.1 1.2 4.3 Mortgage Warehouse Lending 3.2 1.1 4.3 Non-Profit 1.4 2.1 3.5 Resort Finance
Slide 12: Loan Growth and Portfolio Composition
12 Loan Growth and Portfolio Composition $ in millions Commercial & Industrial CRE, Non- Owner Occupied CRE, Owner Occupied Residential and Consumer Construction & Land Highlights q Total proportion of CRE loans in the portfolio has decreased nearly 10% year over year, primarily due to the accelerat
Slide 13: Deposit Growth and Composition
13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $2,200 $2,094 $2,279 $2,247 $2,288 $710 $750 $795 $809 $855 $3,310 $3,672 $3,637 $3,685 $3,870 $1,618 $1,633 $1,759 $1,957 $1,918 Deposit Growth and Composition $ in millions NOW CDS Non-Int Bearing DDA $7,838 $8,149 $8,470 $8,698 $8,931 Growth: +311 +321 +228 +233 H
Slide 14: Tangible Book Value Walkforward Q4 2013 - Q4 2014
14 Tangible Book Value Walkforward Q4 2013 - Q4 2014 Components of Changes in Tangible Book Value Per Share (net of tax) Q4 2013 EPS OCI ATM Equity Q4 2014 $7.90 $1.67 $0.43 $0.11 $0.10 $10.21 TBV/Share TBV/ShareOffering Compensation
Slide 15: Adversely Graded Loans and Non-Performing Assets
15 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $56 $48 $51 $43 $46 $74 $70 $64 $75 $68 $79 $85 $101 $86 $72 $93 $91 $72 $78 $78 Adversely Graded Loans and Non-Performing Assets Organic Acquired* NPA’s Adversely Graded Loans * Net of credit and interest rate discounts from acquisitions
Slide 16: Charge-Offs and Provision
16 Charge-Offs and Provision Q4 2014 Highlights Gross Charge Offs and Recoveries Net Charge Offs (Recoveries) and Rate Provision for Credit Losses q Recoveries of $3.4 million exceeded gross charge-offs of $2.6 million, resulting in net recoveries of $0.8 million q Annualized net recovery rate was 0
Slide 17: Regulatory Capital
17 13% 12% 11% 10% 9% 8% 7% Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 12.4% 12.4% 12.4% 12.2% 11.7% 8.8% 8.8% 9.0% 9.0% 9.3% 7.4% 7.5% 7.9% 8.2% 8.6% Regulatory Capital Common Equity Capital Ratios $ in millions Total RBC Common Equity Tier 1 Tangible Common Equity Highlights q Tangible common equity improved m
Slide 18: Outlook 1st Quarter 2015
18 Outlook 1st Quarter 2015 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
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