Western Alliance Bancorporation · NYSE:WAL
Western Alliance Bancorporation — Q3 2012 Earnings Presentation
25 slides from Western Alliance Bancorporation's earnings presentation, Oct 18, 2012
Slide 1: 3rd Quarter 2012 Earnings Call
3rd Quarter 2012 Earnings Call October 19, 2012 Western Alliance Bancorporation (NYSE: WAL)
Slide 2: Q3 2012 Financial Highlights
2 Income Statement –Net income of $15.5 million, up 10.7% from $14.0 million in Q2 2012 and 18.8% from $13.0 million in Q3 2011 –Earnings per share of $0.18, up 20% from $0.15 in Q2 2012 and more than triple the $0.04 in Q3 2011 –Excluding the following items, net income of $16.6 million and EPS of
Slide 3: Update on Western Liberty Acquisition
3 Update on Western Liberty Acquisition The Western Liberty Bancorp (WLBC) acquisition closed on October 17 Service 1st Bank scheduled to be merged into Bank of Nevada today WLBC Balance Sheet as of September 30, 2012 $184 million in assets, $101 million loans, $112 million deposits, and $71 million
Slide 4: Loans: Q3 2012 Loan Growth of $168 Million
4 Loans Q3 2012 Loan Growth of $168 Million Loan Portfolio Composition, Q3 11 through Q3 2012 $1,153 $1,337 $1,437 $1,584 $1,756 $1,225 $1,252 $1,290$1,233 $1,293 $1,355 $1,433 $1,407 $511 $516 $493 $486 $465 $404 $382 $349 $361 $380 $0 $1,000 $2,000 $3,000 $4,000 $5,000 Q3-11 Q4-11 Q1-12 Q2-12 Q3-1
Slide 5: Q3 2012 Loan Growth
5 Q3 2012 Loan Growth Q3 2012 Quarter net increase in Total Loans of $168 million $182 -$33 $21 -$21 $19 -$75 -$25 $25 $75 $125 $175 $225 Q3 Change by Loan Type -$5 $49 $109 $58 -$47 $6 -$4 $2 $0 -$75 -$25 $25 $75 $125 $175 $225 1 2 3 4 5 6 7 8 9 Q3 Change by Loan Grade Pass Watch Classified C&I CRE
Slide 6: Deposits: Q3 2012 Deposit Growth of $161 Million
6 Deposits Q3 2012 Deposit Growth of $161 Million $1,519 $1,558 $1,758 $1,842 $1,841 $2,152 $2,166 $2,224 $2,438 $2,543 $466 $483 $527 $541 $513 $1,496 $1,451 $1,390 $1,180 $1,265 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Q3 - 11 Q4 - 11 Q1-12 Q2-12 Q3-12 Deposit Composition, Q3 11 through
Slide 7: 2012 Arizona Deposit Market Share
7 As of 6/30/122012 Rank 2011 Rank DepositsMarket Share11Wells Fargo & Co.22,96927.8%22JPMorgan Chase & Co.21,97126.6%33Bank of America Corp.16,30519.7%45Zions Bancorp.3,7484.5%54Banco Bilbao Vizcaya Argentaria SA3,1133.8%66BMO Financial Group2,8163.4%77Western Alliance Bancorp.1,4831.8%88U.S. Banco
Slide 8: 2012 San Diego MSA Deposit Market Share
8 2012 San Diego MSA Deposit Market Share(1) (1) Source: 2012 FDIC Deposit Market Share Survey from SNL Financial. o TPB’ s year over year deposit growth in the San Diego MSA is nearly 17% compared to market average of 7.5% As of 6/30/122012 Rank 2011 Rank DepositsMarket Share11Wells Fargo & Co.15,0
Slide 9: 2012 Nevada Deposit Market Share
9 2012 Nevada Deposit Market Share(1) (1) Source: 2012 FDIC Deposit Market Share Survey from SNL Financial. Excludes non-market deposit entities o BON’ s year over year deposit growth is flat compared to market average of 3.7% As of 6/30/122012 Rank 2011 Rank DepositsMarket Share11Wells Fargo & Co.1
Slide 10: Western Alliance Bank
10 $20.7 $22.5 $23.1 $24.1 $24.5 4.33% 4.54% 4.47% 4.46% 4.50% 3.6% 3.8% 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% $16 $18 $20 $22 $24 $26 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 $11.9 $11.7 $11.5 $11.7 $11.9 53.3% 47.8% 45.8% 44.2% 44.7% 42% 44% 46% 48% 50% 52% 54% 56% 58% $6 $8 $10 $12 $14 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12
Slide 11: Torrey Pines Bank
11 $19.7 $20.6 $21.2 $21.4 $21.8 5.16% 5.26% 5.18% 5.16% 5.11% 4.6% 4.8% 5.0% 5.2% 5.4% $15 $16 $17 $18 $19 $20 $21 $22 $23 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 $10.0 $11.1 $11.1 $11.1 $11.1 48.0% 51.0% 49.0% 48.2% 47.3% 44% 46% 48% 50% 52% 54% 56% $8 $9 $10 $11 $12 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Torrey Pin
Slide 12: Bank of Nevada
12 $26.3 $27.7 $27.8 $27.5 $27.7 4.04% 4.31% 4.36% 4.32% 4.28% 3.9% 4.1% 4.3% 4.5% $25 $26 $27 $28 $29 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 $17.8 $17.3 $17.1 $17.4 $16.7 58.9% 54.0% 52.8% 54.4% 51.9% 50% 52% 54% 56% 58% 60% 62% $16 $17 $18 $19 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Bank of Nevada (1) Reported on a
Slide 13: Q3 2012 WAL Consolidated Financial Results
13 Q3 2012 WAL Consolidated Financial Results (1) Excludes securities and goodwill impairment, mark-to-market gains/losses, gains/losses on sale of investment securities and repossessed assets, and merger related expenses . ($ in millions, except EPS) Q3-12Q2-12Q3-11 Net Interest Income 71.9$ 70.8$
Slide 14: Components of Changes in Earnings Per Share
14 Components of Changes in Earnings Per Share $0.15 $0.01 $0.03 $0.01 $0.20 $0.05 $0.02 $0.01 $0.18 $0.10 $0.15 $0.20 $0.25 EPS Q2 2012 Net Interest Income Loan Provision Dividend Reduction Operating EPS ex Items Goodwill and Intangible Impairment Security and Unreal Gain Gain on Minority Interest
Slide 15: WAL Consolidated Financial Metrics
15 $42.4 $42.8 $44.2 $44.5 $43.9 59.6% 56.5% 57.0% 56.4% 54.9% 52% 54% 56% 58% 60% 62% 64% $38 $40 $42 $44 $46 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 WAL Consolidated Financial Metrics (1) Reported on a tax-equivalent basis. (2) Operating expenses exclude goodwill impairment, merger-related expenses and gain
Slide 16: WAL Consolidated Net Interest Margin Drivers
16 $306 $155 $180 $179 $168 $381 $125 $97 $81 $161 $0.0 $200.0 $400.0 $600.0 $800.0 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Cash Short-Term Investments $1.3 $1.5 $1.4 $1.4 $1.3 2.91% 3.01% 3.13% 3.15% 3.17% 2.5% 2.7% 2.9% 3.1% 3.3% 3.5% $1.0 $1.1 $1.2 $1.3 $1.4 $1.5 $1.6 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 WAL Cons
Slide 17: Components of Changes in Net Interest Margin
17 Components of Changes in Net Interest Margin Q2 2012 – Q3 2012 4.46% 0.05% 0.06% 0.03% 0.03% 4.0% 4.1% 4.2% 4.3% 4.4% 4.5% 4.6% Q2 2011 Loan Floors Hedge Loan Yields Funding Costs Tax Equivalent Adjustment Q3 2011 4.41% Net Interest Margin
Slide 18: Problem Loans & Repossessed Assets
18 $87 $89 $81 $77 $78 $116 $93 $104 $105 $123 $111 $112 $98 $136 $114 $168 $147 $133 $92 $100 $0 $125 $250 $375 $500 $625 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Repossessed Assets Non-Performing Loans Classified Accruing Loans Watch Loans $482 $441 $416 $410 $415 Problem Loans & Repossessed Assets(1) (1) Cl
Slide 19: Charge-Offs by Vintage and Remaining Balances
19 80.0% 20.0% Charge-Offs by Vintage and Remaining Balances(1) Cumulative Charge-Offs 2000 - 2012 Loan Balances Outstanding 2000 - 2012 2000 - 2008 2009 - 2012 63.8% $3,368.9 0.9% $3.4 99.1% $367.3 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Charge Offs $2.4$2.4 $1.9 $5.0 $25.3
Slide 20: Net Charge-Offs and Provision
20 $2.3 $4.0 $0.7 $3.4 $3.0 $8.9 $9.1 $12.4 $9.9 $6.0 $0 $5 $10 $15 $20 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Other Allocated Provision Net Growth Provision Net Charge-Offs and Provision Q3 11 – Q3 2012 1.40% 1.24% 1.18% 1.11% 0.70% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% $0 $5 $10 $15 $20 Q3-11 Q4-11 Q1-
Slide 21: Q3 2012 OREO Summary
21 Q3 2012 OREO Summary 69% 10% 9% 7% 4% 2% 1% Property Type Land Office Industrial Hotel SFH Retail Other Appraisal Status (1) OREO with current appraisal OREO to be appraised in Q4-12 (in millions)OREO Valuation at end of Q2 12$76.3Q2-12 Changes:Additions to OREO11.0Sales of OREO-9.4Valuation Adju
Slide 22: Estimated Q3 2012 Basel I and Basel III Capital
22 Estimated Q3 2012 Basel I and Basel III Capital(1) Basel IWAL Basel III CalculationMinimum + Cap Conservation BufferWell(1) Capitalized RequirementsTier 1 Common Equity510 Total Tier 1 Capital704 709 Total Capital787 798 Average Assets7,248 7,260 Risk-Based Assets 6,394 6,633 Tier 1 Common7.7%3.5
Slide 23: Outlook 4th Quarter 2012
23 Loan and deposit growth Net interest margin Efficiency ratio Asset quality Acquisition Integration Outlook 4th Quarter 2012
Slide 24: Western Alliance Bancorporation
WA WESTERN ALLIANCE BANCORPORATION™
Slide 25: Forward-looking statements
25 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. The forward-looking statements contained herein reflect our
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