You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Joining me on the call today is Dale Gibbons and Tim Bruckner, our Chief Financial Officer and Chief Credit Officer.
I will first provide an overview of our quarterly results and how we are managing the business in this current economic environment.
And then Dale will walk you through the bank's financial performance.
And in 2020, Western Alliance broke many of our own records for balance sheet growth, net interest income, and earnings.
All the while fortifying our balance sheet position.
Our strategy to align the company with strong borrowers nationwide provided us the strength and flexibility to navigate the economic volatility as we grew our balance sheet and income, while simultaneously managing asset quality.
Despite external challenges, financially 2020 was a strong year and was our 11th consecutive of rising earnings.
For the year, we produced record net revenues of $1.2 billion, net income of $506.6 million and earnings per share of $5.04, 4% greater than 2019 despite increasing the provision expense by $124 million.
Our focus continues to be on PPNR growth, which rose approximately 20% to $746 million and net interest income increased $126.5 million or 12%, while total expenses increased a modest $9.6 million.
To put this in perspective, 2020 revenue expanded 13 times the rate of expenses in a difficult, uneven and complex operating environment.
Given all these actions, tangible book value per share grew 16.4% year-over-year to $30.90.
Turning to the fourth quarter results.
We achieved a record $193.6 million of net income and earnings per share of $1.93 for the quarter, an increase of 54% from prior year.
These results benefited from a $34.2 million reversal of credit loss provision consistent with our strong asset following results and improved go forward consensus economic outlook.
Outstanding quarterly loan and deposit growth of $1 billion and $3.1 billion, respectively, lifted total assets to $36.5 billion, which was driven by broad based growth throughout our business lines and geographies as clients delayed [Indecipherable] under investment for future opportunities.
Additionally, several of our internal business initiatives gained traction.
For the full year, loans increased $4.5 billion, excluding PPP program or 21% and deposits grew a record shattering, $9.1 billion, which we believe created a strong funding foundation for ongoing loan and earnings growth as the economy continues to heal from COVID shutdowns.
This balance sheet growth propelled net interest income decline of $315 million for the quarter or 16% on a year-over-year basis.
Quarterly NIM was 3.84%, up 13 basis points of the third quarter as PPP income improved and costs, CET costs fell.
Fee income increased to $23.8 million for the quarter, aided by $6.4 million of equity and warrant income.
On a full year basis, fee income grew a healthy 8.8% to $70.8 million.
Full year operating non-interest expense grew $9.6 million to $491.6 million, producing an efficiency ratio of 38.8%.
In the fourth quarter, our efficiency ratio improved to 38.2% as revenue growth was 4 times non-interest expense growth and continues to provide [Indecipherable] flexibility to grow PPNR.
Asset quality continued to improve this quarter as our COVID remediation strategy produce increasingly positive results for our clients.
Total classified assets declined $102 million in Q4 to 61 basis points of total assets, which was lower than Q1 '20 levels on both a relative and absolute dollar amount.
Just as the pandemic impact was being felt.
At quarter-end total deferrals had fallen to $190 million or 70 basis points of total loans, including $77 million for low LTV and residential loans.
As of today there are less than $10 million of deferrals excluding the residential portfolio and all of our hotel franchise findings loans are paid as agreed.
These noticeably positive credit trends, the improved consensus economic outlook and amount of loan growth of low risk asset financials drove our $34.2 million release in loan loss reserves this quarter.
Dale will go into more details on specific drivers of our provision, but our total loan to ACL to funded loans ratio excluding PPP loans now stands at 1.24% or $316 million.
And total loan ACL to total classified assets is 142%.
Charge-offs were $3.9 million in Q4 and full-year charge-offs were 6 basis points of loans.
Our robust PPNR generation continues to drive strong capital levels for the CET 1 ratio of 9.9%, supporting 28% year-over-year loan growth.
Return on average assets and return on average tangible common equity were 161 basis points and 17.8% respectively.
We remain one of the most profitable banks in the industry.
As we demonstrated throughout 2020, we will continue to support our clients and are encouraged by their participation in PPP program as the second round is rolling out.
We have begun processing application and are seeing steady volumes.
But given the size constraints and other factors, we don't expect the total amount to rise to levels we saw in round one.
Finally, and most importantly, all of our accomplishments cannot be achieved without the [Indecipherable] made by the people of Western Alliance, to successfully respond to the challenging COVID-19 environment.
We had strong position and prepare the company [Indecipherable] long way as we enter 2021.
We take pride in our peer leading performance in good times, but above all during the challenging events.
Dale will now take you through our financial report.
For the quarter, Western Alliance generated net income of $193.6 million or $1.93 EPS, each up more than 40% on a link quarter basis.
As mentioned, net income, benefited from a release in provision expense of $34.2 million, primarily driven by improvement in the economic outlook during the quarter and loan growth in lower risk asset classes.
Net interest income grew $30.1 million during the quarter to $314.8 million, an increase of 10.6% quarter-over-quarter and significantly above Q2 performance as -- to which we guided.
Non-interest income increased $3.2 million to $23.8 million from the prior quarter, supported by $5.1 million of warrant gains related to technology lending.
Non-interest expense increased $8.1 million, mainly driven by an increase in incentive accruals and our fourth quarter performance exceeding the original budget targets, which were established pre-pandemic.
Continued balance sheet growth generating superior net interest income, grow pre-provision net revenue of $206.4 million, up 30.4% year-over-year and up substantially from the first and third quarters of 2020 as the second quarter benefited from one-time items of PPP loan fee recognition and bank-owned life insurance restructuring.
For the year, Western Alliance generated record net income of $506.6 million or $5.04 per share, an increase over full-year 2019 even when considering elevated provision expense of $124 million for the year.
Net interest income grew $126.5 million during the year to $1.2 billion, an increase of 12.2% year-over-year mainly attributable to increased loan balances, PPP loan fees, and 49% reduction in interest expense.
Non-interest income increased $5.7 million to $70.8 million from the prior year.
We recognized a one-time benefit of fully restructuring during Q2 of $5.6 million.
Finally, non-interest expense increased $9.6 million or just 2% year-over-year as increases in short-term incentive accruals and technology costs were offset by lower deposit costs.
Turning now to our net interest drivers.
Investment yields decreased 18 basis points from the prior quarter to 2.61 [Phonetic] and fell 35 basis points from the prior year due to a lower rate environment.
On a link quarter basis, loan yields rose 20 basis points following increased yields across most loan types, mainly driven by a changing loan mix and higher PPP yields related to prepayment assumptions on forgivable amounts.
PPP yield for the quarter was 3.67% compared to 1.76% for the third quarter.
Interest-bearing deposit costs were reduced by 6 basis points in Q4 to 25 basis points, with an end of the quarter spot rate of 23 basis points as higher cost CD roll off.
Spot rate for total deposits, which includes non-interest bearing deposits was 13 basis points.
We expect funding costs have essentially stabilized at these levels.
However, there could be marginal benefits as higher cost CDs continue to mature and are in place at lower rates.
Current spot rates indicate a relatively stable margin as we enter 2021.
Some decline in loan yields is expected as the mix has changed to lower risk segments.
With regards to our asset sensitivity, our rate risk profile has declined notably since the beginning of 2019, with 82% of our loans now behaving as fixed due to floors for variable rate loans and mix shift toward fixed rate residential loans.
We continue to be asymmetrically positioned to benefit from any future rate increases, with an estimated increase in net interest income of 5.7% from 100 basis point rate increase in a parallel [Phonetic] shock scenario versus 0.9% contraction in net interest income, if rates fell and flat line at zero.
As Ken, mentioned this year we demonstrated our ability to grow net interest income by 15.7% year-over-year despite the transition to a substantially lower rate environment.
Net interest income increased $30.1 million or 10.6% during the quarter as net interest margin increased 3.84%.
Margin benefited from both a true-up related to PPP fee recognition, favorable deposit mix shift, and improved deposit rates.
As mentioned earlier, during the fourth quarter of our extraordinary deposit growth and build liquidity continues to weigh on the margin and had a negative impact of 9 basis points this quarter.
Adjusting for this, the margin would have been slightly above the 3.9% guidance we gave during the last quarterly call.
PPP loans increased our NIM during Q4 by 11 basis points as we trued up changes to prepayment assumptions made during Q3.
Resulting in PPP loan yield of 3.67%.
Notice the gold line on the bar chart showing NIM, excluding volatility related to PPP, NIM was 3.8% for Q4 and essentially flat from the third quarter.
Average excess liquidity relative to loans increased $467 million in the quarter, the majority of which is held at the FRB or a minimal returns, which reduced NIM by approximately 9 basis points in aggregate.
Given our healthy loan pipeline and ability to deploy these funds to higher yielding earning assets, we expect margin drag to dissipate in coming quarters.
Referring to the chart on the lower left section of the page, from the $43 million in total PPP loan fees, net of origination costs, $11 million was recognized in the fourth quarter.
We recognized a reversal of PPP loan fees in the third quarter and it is up $6.4 million and expect fee recognition to be approximately $6.6 million in Q1 and taper off as prepayments and forgiveness are realized.
As the second round of PPP is just under way, these fee accretion assumptions only apply to the initial round of funding.
Turning now to the efficiency.
Our efficiency ratio improved to 38.2% in Q4, as the increase in expenses was outweighed by revenue growth and only rose 2% from the fourth quarter of 2019.
Excluding PPP net loan fees and interest, the efficiency ratio for the quarter would have been 39.9%.
And as we indicated last quarter, should be returning to historical levels in the low 40s [Phonetic].
Pre-provision net revenue increased $25.2 million or 13.9% from the prior quarter and 30.4% from the same period last year.
This resulted in pre-provision net revenue ROA of 2.37 for the quarter, an increase of 15 basis points from Q3 and equal to the year-ago period.
This strong performance in capital generation provides us significant flexibility to fund ongoing balance sheet growth, capital management actions to meet credit demands from our clients.
Our strong balance sheet momentum continued during the quarter as loans increased $1 billion, net of $271 million of PPP loan payoffs to $27.1 billion and deposit growth of $3.1 billion, broader deposit balances of $31.9 billion at year-end.
Inclusive of PPP, loans grew 28% year-over-year while deposits grew approximately 40% year-over-year, with a focus on -- focus on loan loss -- loan segments in DDA.
Loan to deposit ratio decreased 84.7% from 90.2% in Q3 as our strong liquidity position continues to ride with balance sheet capacity, with [Indecipherable] needs.
As deposit growth continues to outpace loan origination, our cash position remains elevated at $2.7 billion at year-end.
However, we believe it provides inventory for selective credit growth as demand resumes.
Finally, tangible book value per share increased $1.87 over the prior quarter to $30.90, with an increase of $4.36 or 16.4% over the prior year.
Our strong loan growth is a direct result of our flexible business model, which combines national commercial banking relationships with our regional footprint and enables thoughtful growth throughout economic cycles.
The vast majority of the $1 billion growth was driven by increases in C&I loans of $655 million supplemented by CRE non-owner occupied loans of $248 million.
Residential and consumer loans now comprise 9.2% of our loan portfolio.
While construction loan concentration increased modestly to 9% of total loans.
Within the C&I growth for the quarter and highlighting our focus on low-risk assets, capital call lines grew $408 million, mortgage workout lines grew $413 million and corporate finance loans decreased to $122 million this quarter.
Residential loan originations added $56 million in balances by quarter end, net of repayment activity.
We continue to believe our ability to profitably grow deposits is both a key differentiator and a core value driver to our firm's long-term value creation.
Notably, year-over-year deposit growth of $9.1 million is more than double the annual deposit growth of any previous calendar year.
Deposits grew $3.1 billion or 10.7% in the fourth quarter, driven by increases in savings and money market of $1.8 billion, interest-bearing DDA of $842 million and non-interest bearing DDA of $450 million, which comprises 42% of our deposit base.
Robust activity in tech and innovation and market share gains in mortgage warehouse continue to be significant drivers of deposit growth during the quarter.
Additionally, one of our core deposit -- one of our deposit initiatives that is pulling online contributed over $1 billion in deposit growth in 2020.
Looking at asset quality, total classified assets decreased to $102 million in Q4 due to credit upgrades, payoffs, and refinance activity away from [Indecipherable].
Our non-performing loans and ORE ratio decreased to 32 basis points to total assets and total classified assets fell to 61 basis points of total assets at year-end, which was below the ratio at the end of 2019.
Special mentioned loans decreased $26 million during the quarter to 1.67% of funded loans.
As we've discussed before, special mentioned loans are result of our credit mitigation strategy too early identify, elevate, and apply heightened monitoring to loans or segments impacted by the current COVID environment and fluctuate as credit migrates in and out.
We do not see a risk of material losses coming from these credits.
Regarding loan deferrals, as Ken mentioned, as of today, we have less than $10 million of deferrals.
Excluding approximately $77 million in low LTV residential loans, with weighted average loan to value of under 67%.
All of our hotels franchise finance loans are paying as agreed and our sophisticated hotel sponsors continue to confirm support for their project.
Net credit losses of $3.9 million or 6 basis points in average loans were recognized during the quarter compared of $8.2 million in Q3.
Our loan allowance for credit losses decreased $39 million from the prior quarter to $316 million due to improvement in economic forecasts and loan growth in portfolio segments with low expected loss rate.
In all, the total ACL to funded loans declined 20 basis points to 1.17% or 1.24% when excluding PPP loans.
On a more granular level, our low [Phonetic] less assets account for approximately 40% of our portfolio and include mortgage warehouse, residential and HRA lending, capital call lines, public finance and resort lending.
When excluding these components, the ACL for funded loans on the remainder of the portfolio is 1.7%.
We continue to generate significant capital and maintain strong regulatory capital ratios with tangible common equity to tangible assets of 8.6% and a common equity Tier 1 ratio of 9.9%, the decrease of 10 basis points during the quarter due to our strong loan growth.
Inclusive of our quarterly cash dividend, payment of $0.25 per share, our tangible book value per share rose $1.87 in the quarter to $30.90, an increase of 16% in the past year.
We continue to grow our tangible book value per share rapidly has it increased at 3 times that of the peer group the past six years.
I'll now hand the call back over to Ken.
We believe that our fourth quarter performance was a baseline for future balance sheet and earnings growth, building off a robust growth we had in the fourth quarter.
Our pipelines are strong and we expect loan and deposit growth of $600 million to $800 million for the next several quarters.
Both loan and deposits each have their own cyclical and seasonal behavior that are not aligned on a quarterly basis.
As Dale mentioned, given our deposit growth and liquidity, we expect there to be some downward pressure on these related to mix changes and the deployment of liquidity into attractive asset class.
Additionally, we will continue to see influence on a quarterly basis by the wave of PPP loans being forgiven and the second round of PPP loans coming online.
Strong PPNR growth will continue, down momentum will drive higher net interest income, which more than offset the planned increase in non-interest expense.
Looking ahead, we will continue to invest in new product offering and infrastructure to maintain operational efficiency, which we will eventually push our efficiency ratio back to sustainable levels in the low 40s.
Our long-term asset quality and loan loss reserves are formed by the economic forecast, which is consistent going forward, could imply a steady reserve ratio.
Depending on the timing and pace of the recovery, it could be some long migration into the special mentioned category, but we do not expect material migration fee to sub-standard.
We believe that the provision that [Indecipherable] since pandemic began are more than sufficient to cover charge-offs through the cycle as we do not see any indicators that imply material losses are on the horizon.
Finally, [Indecipherable] one of the most prolific capital generators in the industry.
Our strong capital base and access to ample liquidity allows to take advantage of any market dislocation we take, leading risk-adjusted returns and to the trust any future credit demands, all while maintaining flexibility to improve shareholder returns.

user
compname posts q4 earnings per share $1.93.
q4 earnings per share $1.93.

assistant