Western Alliance Bancorporation Common Stock (DE)

Good day, everyone. Welcome to Western Alliance Bank Corporation's second quarter 2024 earnings call. You may also view the presentation today via webcast through the company's website at www.westernalliancebankcorporation.com. I would now like to turn the call over to Myles Pondelik, Director of Investor Relations and Corporate Development. Please go ahead.

Thank you. Welcome to Western Alliance Bank's second quarter 2024 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 risk and certainty assumptions. Except as required by law, the company does not undertake any obligation to update any forward-looking statements. For more complete discussion of the risks and certainties that could cause actual results to differ materially, For any forward-looking statements, please refer to the company's SEC filing included in the form acapella yesterday, which are available on the company's website. Now, for opening remarks, I'd like to turn the call over to Ken Becchione.

Thank you, Miles. Good morning, everyone. I'll make some brief comments about our second quarter earnings before turning the call over to Dale, who will review our financial results in more detail after I discuss our updated 2024 outlook. Tim Bruckner, backed by Popular Demand, our Chief Credit Banking Officer for Regional Banking, will join us for Q&A. Western Alliance earned $1.75 per share in the second quarter and demonstrated the bank's building momentum as our repositioning strategy has transitioned into earnings growth strategy. Growth will be accompanied by an elevated risk management architecture as well as enhanced liquidity profile and capital base. Thoughtful balance sheet growth in Q2 drove an upward inflection in net interest income from increased liquidity deployment into higher yielding earning assets. We generated outsized core deposit growth of $4 billion and HFI loan growth of $1.7 billion, or 14% on an annualized basis from Q1, which we expect will exceed our peers. CET1 capital remained at 11%. Deposit growth in excess of guidance lowered our HFI loan-to-deposit ratio by two points to 79%. Our liquidity profile was also bolstered by a $1.7 billion increase in securities and cash from quarter end, which allowed us to pay down borrowings by $634 million and broker deposits by $222 million. Our differentiated national commercial banking franchise uniquely positions us to generate the same deposit growth from various business lines and deploy this liquidity into attractive no-to-low-loss T&I commercial loans where we have deep segment and product expertise. As the quality overall is normalizing, which we expected, total classified assets declined $33 million in the quarter to 93 basis points. Net charge-offs were 18 basis points of average loans, the majority of which relates to the downtown San Diego office property we identified on this call a year ago when it migrated to substandard. I think it's also important to note the renewed earnings power of our franchise strengthens our ability to consistently compound capital and generate risk-adjusted earnings growth to support the Q3 and Q4 earnings ramp we have previously communicated. For the quarter, net interest income grew 39% annualized, driven by higher average earning assets and an expanding NIM. Annualized deposits and HFI loan growth of 26% and 14% respectively pushed net interest income higher. Higher ending balances compared to average balances establishes a higher jumping off point to increase net interest income going forward. In total, pre-provision net revenue adjusted for the FDIC special assessments in Q4 and the rebate in Q1 is 22% annualized and is poised to continue its upward trajectory. At this point, I'll turn the call over to Dale for a review of all the financial results.