Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q2 2021 Earnings Presentation
24 slides from Wintrust Financial's earnings presentation, Jul 19, 2021
Slide 1: Earnings Release Presentation Q2 2021 Wintrust Financial Corporation
Earnings Release Presentation Q2 2021 Wintrust Financial Corporation
Slide 2: Q2 2021 Highlights
2 ROA3 • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $1.2 billion or 15%, on an annualized basis. • Total deposits increased by $932 million. • Net interest income increased by $17.7 million primarily due to earning asset growth and increased PPP loan fee accretion
Slide 3: Earnings Summary
3 Earnings Summary Net Income & ROA ($ in Millions) Diluted EPS Key Observations Condensed Income Statement Current Q Difference vs.Current Q • Pre-Provision Net Revenue increased by $15.5 million compared to the prior quarter and $10.8 million as compared to Q2 2020 • $21.7 $107.3 $101.2 $153.1 $10
Slide 4: Total Loans
4 • Total loans decreased $260 million from the prior quarter-end and increased $1.5 billion as compared to the end of Q2 2020. • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $1.2 billion, as compared to March 31, 2021, primarily due to a $563 million increase in co
Slide 5: Deposit Portfolio
5 • Total deposits increased by $932 million from the prior quarter end. The increase in deposits includes a $606 million increase in money market deposits and a $499 million increase in non-interest bearing deposits. Non-interest bearing deposits comprise 33% of total deposits as of June 30, 2021.
Slide 6: Liquidity
6 Liquidity • We continue to maintain excess liquidity and believe that deploying such liquidity could potentially increase our net interest margin. • Given the decline in long-term interest rates in the second quarter of 2021, Wintrust did not materially increase the investment portfolio due to the
Slide 7: Capital Adequacy
7 7.0% 8.5% 10.5% 4.50% 6.00% 8.00% 2.50% 2.50% 2.50% 8.9% 10.1% 12.3% Minimum Requirement Product Conservation Buffer WTFC 12.6% 0.2% (0.4)% (0.1)% 12.3% 3/31/2021 Retained Earnings Change in RWA Subordinated Debt 6/30/2021 Capital Q2 2021 Key Observations Strong Capital Levels • Common Equity Tier
Slide 8: Net Interest Margin
8 2.73% 2.56% 2.53% 2.53% 2.62% 2.74% 2.57% 2.54% 2.54% 2.63% 3.44% 3.12% 3.02% 2.96% 3.00% 0.28% 0.24% 0.22% 0.21% 0.19% 0.98% 0.79% 0.70% 0.63% 0.56% Net Interest Margin (GAAP) Net Interest Margin, Fully Taxable-Equivalent (Non-GAAP ) Earning Assets Yield Net Free Funds Contribution Rate on Intere
Slide 9: Non-Interest Income
9 Non-Interest Income ($ in Millions) $162.0 $170.6 $158.4 $186.5 $129.4 $22.6 $25.0 $26.8 $29.3 $30.7 $102.3 $108.5 $86.8 $113.5 $50.6 $11.8 $11.7 $12.1 $14.4 $12.2 $10.4 $11.5 $11.8 $12.0 $13.2 $14.9 $13.9 $20.9 $17.3 $22.7 Wealth Management Mortgage Banking Operating Lease Income, net Service Cha
Slide 10: Mortgage Banking
10 $(9.0)$(10.2)$(8.5) $(8.0)$(3.0)$(5.2) $18.0 $(5.5) $39.0 $94.1$70.9 $71.3 $37.5 $4.6 $(55.8) $(103.7)$(41.0) $20.4 $17.5 MSR - Payoffs/Paydowns MSR - Change in Fair Value Model Assumptions Production Revenue Servicing Income & Other MSR Capitalization MSR Hedging Gains (Losses) Q2 2020 Q3 2020 Q
Slide 11: Non-Interest Expense Trending
11 $259.4 $264.2 $281.9 $286.9 $280.1 $154.2 $164.0 $171.1 $180.8 $172.8 $15.8 $17.3 $20.6 $20.9 $20.9$16.9 $15.8 $19.7 $20.0 $17.7 $7.7 $7.9 $9.9 $8.5 $11.3 $9.3 $9.4 $9.9 $10.8 $9.9 $7.7 $6.5 $6.5 $7.6 $7.3 $10.4 $5.7 $5.7 $6.0 $6.9$37.4 $37.6 $38.5 $32.2 $33.3 Salaries and Employee Benefits Equip
Slide 12: Loan Portfolio - Geographic Diversification
12 Loan Portfolio - Geographic Diversification Canada Market: Loan Portfolio1 - Geographic Diversification2 as of 6/30/2021 Total Loan Portfolio1 Primary Geographic Region Commercial: Commercial, industrial and other Illinois/Wisconsin Leasing Nationwide Franchise Lending Multi-State Commercial real
Slide 13: Credit Quality
13 $373.2 $389.0 $380.0 $321.3 $304.1 1.19% 1.21% 1.18% 0.97% 0.92% 1.33% 1.35% 1.29% 1.08% 0.98% Total Allowance for Credit Losses Total Allowance for Credit Losses as a % of Total Loans Total Allowance for Credit Losses as a % of Total Loans (excl. PPP loans) 6/30/2020 9/30/2020 12/31/2020 3/31/20
Slide 14: Paycheck Protection Program Customer Impact
14 PPP Loans Originated in 2020 and 2021 Paycheck Protection Program Customer Impact Key Observations • CECL Day 1 transition adjustment • Includes ACL for loans and leases, off- balance sheet credit exposures and debt securities Day 1 Adjustment Our bankers didn't wait to hear from nonprofit partne
Slide 15: Credit Quality - Commercial Loans
15 $8,524 $8,898 $9,240 $9,415 $9,563 0.20% 0.16% 0.03% 0.37% 0.08% Total Commercial Loans Net Charge-Offs Ratio 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Credit Quality - Commercial Loans Line Utilization as a % of Commercial Loans3 Period-End Loans & Annualized Net Charge-Offs1 ($ in Mill
Slide 16: Credit Quality - Commercial Real Estate Loans
16 $8,201 $8,423 $8,494 $8,545 $8,678 0.33% 0.06% 0.27% 0.04% 0.04% Total CRE Loans Net Charge-Offs Ratio 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Credit Quality - Commercial Real Estate Loans Period-End Loans & Annualized Net Charge-Offs1 ($ in Millions) Non-Performing Loans ("NPLs") ($ i
Slide 17: Credit Quality - PFR Commercial
17 $4,000 $4,060 $4,054 $3,959 $4,522 0.28% 0.28% 0.27% 0.15% (0.11)% Period End Balance Net Charge-Offs Ratio 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Credit Quality - PFR Commercial Origination Trends ($ in Millions) Period-End Loans & Annualized Net Charge-Offs1 ($ in Millions) Average
Slide 18: Credit Quality - PFR Life
18 $5,401 $5,489 $5,857 $6,111 $6,360 —% —% —% —% —% Period End Balance Net Charge-Offs Ratio 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Credit Quality - PFR Life Origination Trends ($ in Millions) Period-End Loans & Annualized Net Charge-Offs1 ($ in Millions) Average Balances & Quarterly Yi
Slide 19: Credit Quality - COVID-19 - Select High Impact Industries
19 • Restaurants & Food Services make up 4.0% of Total Loans excluding PPP loans and is primarily made up of Quick Service Restaurants ("QSRs"). Outstanding COVID-19 related loan modifications in Restaurants & Food Services modifications decreased to 2.5% as of June 30, 2021 from 6.4% as of March 31
Slide 20: Credit Quality - CECL Allowance for Credit Losses
20 $321,308 $1,152 $(18,339) $304,121 3/31/2021 6/30/2021 • Improving macroeconomic indicators and market conditions. • Additional and ongoing governmental monetary and fiscal support. • Substantial liquidity in the market. • Future expectations regarding current COVID-19 loan modifications. • Low e
Slide 21: Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio
21 Three Months Ended Six Months Ended Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio ($ in Thousands): June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2021 2021 2020 2020 2020 2021 2020 (A) Interest Income (GAAP) $ 319,579 $ 305,469 $ 307,981 $ 311,156
Slide 22: Reconciliation of Non-GAAP Tangible Common Equity
22 Three Months Ended Six Months Ended Reconciliation of Non-GAAP Tangible Common Equity ($'s and Shares in Thousands): June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2021 2021 2020 2020 2020 2021 2020 Total shareholders’ equity (GAAP) $ 4,339,011 $ 4,252,511 $ 4,115,995 $
Slide 23: Forward-Looking Statements
23 This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “sh
Slide 24: Forward-Looking Statements (continued)
24 • ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith; • failure or breaches of our security systems or infrastructure, or those of third parties; • security bre