Western Alliance Bancorporation Common Stock (DE)

Welcome to Western Alliance Bank Corporation's third quarter 2021 earnings call. You may also view the presentation today via webcast through the company's website at www.westernalliancebankcorporation.com. The call will be recorded and made available for replay after 3 p.m. Eastern Time, October 22nd through November 22nd, 2021 at 11 p.m. Eastern Time, by dialing 1-800-585-8367 using conference ID 5392611. I would now like to turn the call over to Miles Ponderlick, Director of Investor Relations and Corporate Development. Please go ahead.

Thank you and welcome to Western Alliance Bank's third quarter 2021 conference call. Our speakers today are Ken Vecchione, President and Chief Executive Officer, and Dale Gibbons, Chief Financial Officer. Before I hand the call over to Ken, please note that today's presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. Except as required by law, the company does not undertake any obligation to update any forward-looking statements. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, please refer to the company's SEC filings, including the Form 8K filed yesterday, which are available on the company's website. Now for opening remarks, I'd like to turn the call over to Ken Beccione.

Good morning and good afternoon to everyone. Also joining us here today is Tim Bruckner, our Chief Credit Officer. This quarter's results continue to demonstrate the unique benefits of Western Alliance's national commercial business strategy to position Wall as one of the country's premier growth commercial banks that consistently generates leading balance sheet and earnings growth with superior asset quality across economic cycles. As a company, we are proud of our thoughtful, safe, sustainable growth and are excited to have passed the $50 billion asset milestone. Validating our strategy during the quarter, we raised $300 million in inaugural preferred offering, achieving the lowest ever preferred dividend rate for a U.S. bank under $100 billion in assets at 4.25%. In the third quarter, exceptional balance sheet expansion continued with our highest ever quarterly loan growth of $4.8 billion, or 63%, on a linked quarter annualized basis. and deposits rose by $3.4 billion, or 32% annualized, as we continue to effectively deploy liquidity. Loan demand continued to broaden across our business lines, with C&I loans increasing by $2.2 billion, inclusive of $240 million of PPP runoff, along with $2.3 billion of growth in our residential portfolios. Notably, capital call lines drove $1.9 billion of growth within CNI as deal activity continues to be strong and utilization rates rose. Additionally, resort lending and hotel franchise finance contributed approximately $114 million to long growth, as well as $148 million increase in CRE investments. For the third quarter, Wall generated record total net revenues of $548.5 million, a 57% annualized rise in PPNR to $317.1 million, and adjusted EPS of $2.30. Adjusted EPS quarter-to-quarter rose by one penny as the company recorded a provision for credit losses totaling $12.3 million, an increase of $26.8 million from the $14.5 million provision released in the second quarter. We remain one of the most profitable banks in the industry with return on average assets and return on average tangible common equities. of 1.83% and 26.6% respectively, which will continue to support capital accumulation and strong capital levels in the quarters to come. I would like to reiterate that AmeriHome is now integrated into the strategic fabric of Western Alliance and has thoughtfully managed to maximize value for the entire bank through loan, deposit, and net interest income growth. A $5.2 billion increase in average earning assets drove net interest income growth of $39.9 million or 10.8% for the quarter or 43% annualized to $410.4 million as excess liquidity deployment into loans and loans held for sale contributed significantly to earnings. Fee income increased $2.1 million to $138.1 million now represents over 25 percent of total net revenue asset quality continues to remain stable as total non-performing assets decline to 10 million dollars to 17 basis points of total assets and net charge-offs with three million dollars or four basis points finally what excites me most is the diverse set of growth opportunities We will continue to do what we do best and support our clients in attractive markets nationally where they do business. I believe we have exited the pandemic as an employer of choice for leading specialized commercial lenders, which positions us well, extremely well, to attract and retain uniquely qualified talent to thoughtfully sustain growth with superior risk-adjusted returns. For example, during the quarter, we hired two seasoned teams – We added 11 people based in Texas to our single family home construction CRE national business line and brought on the leading national restaurant franchise finance team with a hire of six loan and credit professionals. Both teams join us from larger commercial banks where they proved their business plans and built robust multi-billion dollar books of business. The Texas CRE team, has $10 million in outstandings and an additional $110 million approved to be funded and a $400 million pipeline. Likewise, the restaurant franchise finance team has $90 million in outstandings and $54 million approved to be funded and a pipeline of $300 million. Dale will now take you through the details of our quarterly financial performance.