EARNINGS CALL

4th QUARTER 2020

January 22, 2020

Forward-Looking Statements

This release 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 others, statements we make regarding our expectations with regard to our business, financial and operating results, future economic performance and dividends, and the impact of the COVID-19 pandemic and related economic conditions. The forward-looking statements contained herein reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from historical results and those expressed in any forward-looking statement. Some factors that could cause actual results to differ materially from historical or expected results include, among others: the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission; the potential adverse effects of the ongoing COVID-19 pandemic and any governmental or societal responses thereto, including the distribution and effectiveness of COVID-19 vaccines, or other unusual and infrequently occurring events; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; inflation, interest rate, market and monetary fluctuations; increases in competitive pressures among financial institutions and businesses offering similar products and services; higher defaults on our loan portfolio than we expect; changes in management's estimate of the adequacy of the allowance for credit losses; legislative or regulatory changes including in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief and Economic Security Act and the rules and regulations that may be promulgated thereunder; or changes in accounting principles, policies or guidelines; supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities, including expansion through acquisitions; additional regulatory requirements resulting from our continued growth; management's estimates and projections of interest rates and interest rate policy; the execution of our business plan; and other factors affecting the financial services industry generally or the banking industry in particular.

Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We do not intend and disclaim any duty or obligation to update or revise any industry information or forward-looking statements, whether written or oral, that may be made from time to time, set forth in this press release to reflect new information, future events or otherwise.

Non-GAAP Financial Measures

This presentation contains both financial measures based on GAAP and non-GAAP based financial measures, which are used where management believes them to be helpful in understanding the Company's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the Company's press release as of and for the quarter ended December 31, 2020. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor

are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

2

2

4th Quarter 2020 | Financial Highlights

Q4-20Q3-20Q4-19

Earnings & Profitability

Net Income

EPS

Net Interest Income

$

314.8

$

284.7

$

272.0

Pre Provision Net Revenue1

206.4

181.2

158.3

$193.6 million

$1.93

Net Income

193.6

135.8

128.1

EPS

1.93

1.36

1.25

Net Interest Margin

3.84%

3.71%

4.39%

PPNR1 Growth

ROTCE1

Efficiency Ratio1

38.2

39.7

44.1

ROAA

2.22

1.66

1.92

Q4: $25.2million

25.7%

ROTCE1

25.7

18.7

18.9

30.4% Y-o-Y

Balance Sheet & Capital

Total Loans, Gross

$

27,053

$

26,014

$

21,123

Total Deposits

31,931

28,843

22,797

CET1 Ratio

9.9%

10.0%

10.6%

TCE Ratio1

8.6%

8.9%

10.3%

Tangible Book Value per Share1

$

30.90

$

29.03

$

26.54

Asset Quality

Loan Growth

Deposit Growth

Q4: $1.0 billion

Q4: $3.1 billion

28% Y-o-Y

40% Y-o-Y

(Recovery of) Provision for Credit losses2

$

(34.2)

$

14.6

$

4.0

Net Charge-Offs

3.9

8.2

1.2

Tangible Book

NPAs3/ Total

Value per

Net Charge-Offs / Avg. Loans

0.06%

0.13%

0.02%

Assets

Share1

Total Loan ACL / Funded Loans

1.17

1.37

0.84

$30.90

0.32%

NPAs3 /

Total Assets

0.32

0.47

0.26

16.4% Y-o-Y

Dollars in millions, except EPS

1)

Refer to slide 2 for further discussion of Non-GAAP financial measures.

2)

Upon adoption of CECL on January 1, 2020, Provision for Credit Losses has been modified to also include amounts related to unfunded loan

3

commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

3)

Nonperforming assets includes nonaccrual loans and repossessed assets.

Quarterly Consolidated Financial Results

Interest Income

Q4-20

Q3-20

Q4-19

$

331.6

$

304.8

$

315.4

Interest Expense

(16.8)

(20.1)

(43.4)

Net Interest Income

$

314.8

1

$

284.7

$

272.0

Investment Related Income and Gains

11.1

7.1

2.2

2

Other

12.7

13.5

13.8

Non-Interest Income

$

23.8

$

20.6

$

16.0

Net Revenue

$

338.6

$

305.3

$

288.0

Salaries and Employee Benefits

(83.1)

(78.8)

(73.9)

3

Deposit Costs

(4.5)

(3.2)

(6.8)

Gain (Loss) on OREO

0.21

(0.1)

(1.0)

Other

(45.8)

(42.0)

(48.0)

Non-Interest Expense

$

(132.2)

$

(124.1)

$

(129.7)

Pre-Provision Net Revenue1

$

206.4

4

$

181.2

$

158.3

Recovery of (Provision for) Credit

34.20

(14.6)

(4.0)

Losses2

5

Pre-Tax Income

$

240.6

$

166.6

$

154.3

Income Tax

(47.0)

(30.8)

(26.2)

Net Income

$

193.6

$

135.8

$

128.1

Diluted Shares

100.4

100.1

102.1

Earnings Per Share

$

1.93

$

1.36

$

1.25

Dollars in millions, except EPS

Q4 2020 Highlights

  1. Net Interest Income increased $30.1 million, or 10.5% Q-o-Q, primarily as a result of loan growth, PPP loan fee recognition and lower interest costs
  2. Investment Related Income and Gains consists of warrant income related to tech lending of $5.1 million in Q4, and other FMV gains on equity securities
  1. Salaries & Employee benefits increased primarily related to short-term incentive accruals
  2. PPNR increased $25.2 million, or 13.9% Q-o-Q, primarily as a result of an increase in net interest income
  3. Provision for Credit Losses decreased $48.8 million due to improvement in economic forecasts relative to September 30th and loan growth in segments with lower loss rates

4

1)

Refer to slide 2 for further discussion of Non-GAAP financial measures.

4

2)

Upon adoption of CECL on January 1, 2020, Provision for Credit Losses has been modified to also include amounts related to unfunded

loan commitments and investment securities. Prior period amounts have been restated to conform to the current presentation.

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Western Alliance Bancorporation published this content on 21 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 January 2021 21:59:04 UTC