Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2019 Earnings Presentation
17 slides from Western Alliance Bancorporation's earnings presentation, Oct 17, 2019
Slide 1: Earnings Call 3rd Quarter 2019
EARNINGS CALL 3rd QUARTER 2019 October 18, 2019
Slide 2: 3rd Quarter 2019 Financial Highlights
3rd Quarter 2019 | Financial Highlights Earnings • Net income of $127.4 million increased 14.6% from $111.1 million a year ago ◦ Earnings per share growth of 18.1% to $1.24 from $1.05 per share Balance Sheet Growth • Total loans of $20.2 billion, up $903 million from prior quarter, or 18.8% annualiz
Slide 3: Quarterly Consolidated Financial Results
Quarterly Consolidated Financial Results $ in millions, except EPS Q3 2019 Highlights Q3-19 Q2-19 Q3-18 Interest Income $ 315.6 $ 302.8 $ 265.2 • Net Interest Income increased Interest Expense (49.2) (48.2) (31.2) $11.7 million primarily as a result of loan growth outweighing Net Interest Income $ 2
Slide 4: Net Interest Drivers
Net Interest Drivers1 $ in billions, unless otherwise indicated Total Investments and Yield Loans and Yield Q3 2019 Highlights • Flattening yield curve reduced 6.02% 5.98% 5.86% 5.92% 5.79% investment portfolio yields and 3.47% 3.46% 3.34% 3.21% incremental yield on new loans 3.08% • Loan yields dec
Slide 5: Net Interest Income
Net Interest Income $ in millions Net Interest Income1, NIM2, and Quarterly change Average Interest Earning Assets $266.4 Components NIM $254.7 Q2 2019 4.59% $247.3 $243.5 Basis Risk (LIBOR v Fed Funds) (0.09) $234.0 Liquidity (0.07) Mix Shift / De-Risking (0.02) 4.68% 4.68% 4.71% Q3 2019 4.41% 4.59
Slide 6: Interest Rate Environment
Interest Rate Environment Percentage Increase/(Decrease) to Net Interest Income Q3 2019 Highlights Down 100bps • Nearly 70% of loans are variable rate Scenario ◦ $9.3 billion, or 66%, of variable rate loans Shock Ramp1 have interest rate floors ◦ 22% of variable rate loans are at their floors (1.8)%
Slide 7: Operating Expenses and Efficiency
Operating Expenses and Efficiency1 $ in millions Operating Expenses and Efficiency Ratio Q3 2019 Highlights • The operating efficiency ratio increased 40 basis points to 42.4% compared to the prior quarter as expense growth outpaced revenue 42.4% 42.4% 42.0% growth on a percentage basis, and increas
Slide 8: Operating Pre-Provision Net Revenue, Net Income, and ROA
Operating Pre-Provision1 Net Revenue, Net Income, and ROA2 $ in millions Q3 2019 Highlights • Operating PPNR ROA decreased 10 basis points from the prior 2.63% 2.62% 2.58% 2.54% quarter and decreased 18 basis 2.44% points from Q3-18 2.05% 2.11% 2.12% 2.05% 1.94% • Return on assets decreased 11 basis
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet $ in millions Q3-19 Q2-19 Q3-18 Q3 2019 Highlights Investments & Cash $ 5,020 $ 4,938 $ 4,334 • Loans increased $903 million Loans 20,153 19,250 16,733 (4.7%) over prior quarter and $3.4 Allowance for Credit Losses (165) (160) (150) billion (20.4%) over prior year Other As
Slide 10: Five Quarter Loan Growth and Portfolio Composition
Five Quarter Loan Growth and Portfolio Composition $ in billions, unless otherwise indicated $3.4 Billion Year Over Year Growth Highlights Total Loans $16.7 $17.7 $18.1 $19.3 $20.2 Quarter-over-quarter loan growth of Qtr Change +$0.6 +$1.0 +$0.4 +$1.1 +$0.9 $0.9 billion driven by (in millions): CRE,
Slide 11: Five Quarter Deposit Growth and Composition
Five Quarter Deposit Growth and Composition $ in billions, unless otherwise indicated $3.5 Billion Year Over Year Growth Highlights Total Deposits $18.9 $19.2 $20.2 $21.4 $22.4 Quarter-over-quarter deposit growth Qtr Change +$0.8 +$0.3 +$1.0 +$1.2 +$1.0 of $1.0 billion driven by (in millions): Savin
Slide 12: Adversely Graded Loans and Non-Performing Assets
Adversely Graded Loans and Non-Performing Assets1 $ in millions $439 Asset Quality Ratios $399 $358 $358 $316 $234 $124 $134 $198 Adversely $89 Graded Loans 1.72% 1.70% 1.57% 1.64% 1.43% $177 $181 $162 $131 $139 0.26% 0.26% 0.27% 0.25% NPAs $37 $28 $44 $52 $50 0.20% $20 $18 $18 $18 $16 Q3-18 Q4-18 Q
Slide 13: Charge-Offs, Recoveries, ALLL, and Provision
Charge-Offs, Recoveries, ALLL, and Provision $ in millions Gross Charge-Offs and Recoveries ALLL and ALLL to Organic Loans Ratio $160 $165 $150 $153 $155 $4.8 $4.1 $2.3 $2.6 $2.1 $(0.8) $(1.1) $(1.0) $(2.7) 0.97% 0.92% $(1.7) 0.90% 0.87% 0.85% Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q3-18 Q4-18 Q1-19 Q2-19 Q3
Slide 14: Superior Capital Growth and Robust Capital Levels
Superior Capital Growth Robust Capital Levels Growth in TBV per Share 228% 225% 10.3% 10.1% 8.8% 76% 56% 7.4% 2013 2014 2015 2016 2017 2018 Q3-19 2013 2014 2015 2016 2017 2018 MRQ 1 CET1 TCE WAL WAL with Dividends Added Back Peer Avg Peer Avg with Dividends Added Back14 Note: Peers consist of 74 maj
Slide 15: Management Outlook
Management Outlook • Loan and Deposit Growth • Interest Margin • Operating Leverage • Asset Quality • Earnings 15 1515
Slide 16: Questions and Answers
WA Western Alliance Bancorporation” Questions and Answers 16
Slide 17: 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 stateme
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