Western Alliance Bancorporation (NYSE:WAL) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 12:00 pm ET

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Western Alliance Bancorporation (NYSE:WAL) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Kenneth A. Vecchione

and we feel that we can continue to invest in technologies to bring on new customers and also continue to have a very strong positive operating leverage. But that 2.5 times, which is what we used to do with the rates scenario four cuts, is going to be more difficult.

Executive
Dale Gibbons

Yeah. We're not going to be able to sustain the 2.5 to 1 [Phonetic]. But with that, and with strong expense control, we can still move our operating leverage, it'll still be in the top decile. It may increase from the 42% it's at today, but we're comfortable with that we can sustain again this pre-tax income growth, efficiency and ongoing EPS growth.

Analyst
Casey Haire

Understood. Thank you.

Operator
Operator

Our next question comes from Michael Young with SunTrust. Please go ahead.

Analyst
Michael Young

Hey, good morning.

Executive
Kenneth A. Vecchione

Good morning.

Analyst
Michael Young

I appreciate all the color that you provided in the guidance and the outlook. But I was wanting to just dig into the loan growth a little more this quarter, obviously with a strong C&I growth. Can you give a little more color on, was a lot of that pickup in utilization from clients or any sentiment change that you're seeing? And also, if you could just tell us how much was mortgage warehouse related?

Executive
Kenneth A. Vecchione

Yeah, our loan growth was spread through our regions and through our product lines. So to answer your specific question, warehouse grew $224 million. But we also saw a lot of growth for example, in our equity fund resources group, that would be capital call and subscription lines that went up nearly $70 million, tech and finance, which previous to this quarter had a lot of commitments signed, but no loans outstanding grew this quarter by $144 million. Our muni and non-profit book grew about $60-ish million, so it was spread throughout the product lines and also through the regions.

Analyst
Michael Young

Okay, were there any loan purchases during the quarter?

Executive
Kenneth A. Vecchione

Yeah, there were, and that totaled $140 million.

Analyst
Michael Young

Okay, and then maybe just switching to capital, as you move forward, you've got the dividend coming in place in the third quarter, obviously, very strong loan growth this quarter and it looks like that's going to continue for some time. Are you kind of looking to back off of the share repurchase authorization for a time or do you still feel like you can move forward with that?

Executive
Robert G. Sarver

Yeah, it's Robert. No, I don't think not necessarily, we'll continue to be opportunistic in terms of share buybacks. You know, we evaluate it every month and we still have some excess capital that we're growing even given the dividend.

Analyst
Michael Young

Okay, so it's more a function of stock price than growth at this point?

Executive
Robert G. Sarver

Correct.

Analyst
Michael Young

Okay, thank you.

Executive
Robert G. Sarver

Thank you.

Operator
Operator

The next question today comes from Timur Braziler with Wells Fargo. Please go ahead.

Analyst
Timur Braziler

Hi, good morning, impressive quarter.

Executive
Kenneth A. Vecchione

Thank you.

Analyst
Timur Braziler

Maybe just looking -- looking at the Arizona deposit growth this quarter, quite impressive. Anything specific that drove that? And I guess, what's the outlook,