Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Bank of America Merrill Lynch Smid Cap Conference 2010
48 slides from Wintrust Financial's conference presentation, Jun 9, 2010
Slide 1: Bank of America Merrill Lynch Smid Cap Conference
1 Bank of America Merrill Lynch Smid Cap Conference June 9, 2010 June 9, 2010 June 9, 2010 June 9, 2010
Slide 2: Forward-Looking Information
2 FORWARD-LOOKING INFORMATION During the course of our remarks today, you will hear us make certain predictive statements regarding our plans and strategies and anticipated financial effects to assist you better in understanding our company.These forward looking statements about future results are s
Slide 3: Who We Are
3 Who We Are Eighteen year-old community focused banking organization with approximately $12.8 billion in assets.Fifteen community banks with strong ties to local residents and business leaders in the Chicago and Milwaukee metropolitan markets.9 charters started since 1991 and 7 bank acquisitions si
Slide 4: Who We Are - Company Overview
4 Who We Are - Company Overview Community Banking Specialty Finance Wealth Management Fifteen community banks Chicago and Milwaukee metropolitan markets83 locationsFull product suite - home equity, home mortgage, consumer, real estate and commercial loans, safe deposit facilities, ATMs, & internet b
Slide 5: Who We Are - Core Strategy
5 Chicago and Milwaukee metropolitan marketsHistorically focused on high net worth areas Flexibility to profitably penetrate broader marketPositioned as local alternatives to the "Big Banks" We know our communities extremely wellPersonalized service, creative marketing and employee involvement Have
Slide 6: Wintrust Locations
Wintrust LocationsBankingWealth ManagementMortgage
Slide 7: Funding Assets Operating Strategy
7 Funding Assets Operating Strategy Loan-to-deposit ratio 85% - 90%Generate ~ two-thirds of loan volume from banksRemaining loan volume from niche businessesFirst Insurance FundingTricomOther (including airplanes, housing associations, franchise lending, mortgage warehouse lending -- to name a few)C
Slide 8: Deposit Market Share - Chicago MSA
8 Deposit Market Share-Chicago MSA As of June 30, 2009 and 2008 At June 30, 2009 At June 30, 2008 In-market Deposit In-market Deposit Deposit Market Deposit Market Bank Holding Company Dollars Share % Dollars Share %JP Morgan Chase & Co. ** $ 45.0 BB 15.8% $40.6 BB 14.9%Bank of America ** $ 33.2 BB
Slide 9: Growth Strategy - Expansion
9 Penetrate new markets with community banking modelWithin 11/2 hours of Wintrust headquartersAcquired entities with existing management that wish to continue to grow Acquisitions in specialty finance and wealth management Must complement existing franchise, be a strategic new business line, or add/
Slide 10: Consistent Strategy - Changing Tactics
10 Consistent Strategy - Changing Tactics (1991-2005) (2010) (2008) (2009) (2006-07) Organic & Acquisition Growth7 bank acquisitions since 20039 de novo charters since 1991 "Rope - A - Dope"Slowed growthMaintained extremely conservative underwritingReduced relative cost of fundsControlled expenses "
Slide 11: Growth During Previous Healthy Credit Environment
11 Growth During Previous Healthy Credit Environment Compound Annual Growth Rates in 2005 1 Year 2 Year 3 Year 4 Year 5 YearRevenues 27.6% 26.8% 25.0% 31.8% 31.4%Net Income 30.5 32.6 34.0 38.1 43.1EPS (diluted) 17.5 17.9 19.8 21.3 27.1Assets 27.4 31.2 30.0 31.9 31.2Loans 19.9 25.7 26.8 26.8 27.5Depo
Slide 12: The Perfect Storm - What We Expected
12 The Perfect Storm What We Expected Opportunities for those with dry powderLending opportunitiesAcquisition opportunities for bruised banks and asset generatorsNeed to be first out ^ cannot be burdened by a troubled loan portfolio, lack of funding or capital"It's times like this where money return
Slide 13: Our Response - The Rope-a-Dope Strategy
13 Our Response - The "Rope-a-Dope" Strategy No change in loan underwriting - do not chase the herd!!Slow growth Shrink larger banks (run-off of CD-only customers)Grow newer banksReduce relative cost of fundsDisciplineMixGet paid for making loans - hand out credit with an eye dropperControl expenses
Slide 14: Rope-a-Dope Timing and TARP Capital
14 Rope-a-Dope Timing and TARP Capital was always key in the timing as to when to move off of our defensive strategy.Unwilling to dilute shareholdersIn the third quarter of 2008 and in anticipation of this move, we raised $50 million of convertible preferred stock through a private placement.This ca
Slide 15: So How Did Wintrust Fare? - 2009 Report Card
15 So How Did Wintrust Fare?? - 2009 Report Card So How Did Wintrust Fare?? - 2009 Report Card Positioned to start 2010 with strong earnings and clean balance sheet
Slide 16: So How Did Wintrust Fare? (continued)
16 So How Did Wintrust Fare?? (continued) Wintrust has remained profitable throughout the cycleIn fact, 2009 was a record year for earnings!!First quarter 2010 earnings up 152% from prior yearAssets have grown to $12.84 billion at 3/31/10 from $9.57 billion at the end of 2006Credit charge-offs and n
Slide 17: Purchase of Life Insurance Premium Finance
17 Purchase of Life Insurance Premium Finance ("Dislocated Assets") FIFC purchased a portfolio of domestic life insurance premium finance loans and certain related assets from indirect wholly-owned subsidiaries of AIG Aggregate unpaid principal balance of approximately $1.03 billionPurchase price of
Slide 18: April 2010 Acquisitions of Lincoln Park Savings and Wheatland Bank
18 April 2010 Acquisitions of Lincoln Park Savings and Wheatland Bank from the FDIC ("Dislocated Banks") Acquired these two failed banks from the FDIC - they cover the majority of lossesWill be immediately accretive to earningsStrategic in the sense that they moved us into markets previously not ser
Slide 19: Wintrust is Managing Well Through Challenging Times
19 Wintrust is Managing Well Through Challenging Times (1) Excludes balance of loans in securitization completed on September 11, 2009.
Slide 20: Annual Pre-tax Pre-Credit Costs Earnings
20 Annual "Pre-tax Pre-Credit Costs" Earnings (in 000s) (Qtrs are Annualized) Amounts exclude "Bargain Purchase" gain, provision for credit losses and OREO expenses for credit losses and OREO expenses for credit losses and OREO expenses
Slide 21: Expected Earnings Improvements Pre-Tax
21 Expected Earnings Improvements Pre-Tax Subject to market and other conditions, including interest rate environments, and other factors influencing growth, pre-tax, pre-provision earnings could benefit from the following:Continued Margin ImprovementDeposit Re-pricing Liquidity Re-deploymentBalance
Slide 22: March 2010 Capital Raise
22 March 2010 Capital Raise Enhance and maintain strong capital ratios 12/31/09 3/31/10Tier 1 Risk-based capital 11.2% 13.3%Total capital ratio 12.7% 14.9%Leverage ratio 9.3% 10.8%Tangible common equity ratio 4.7% 6.3%Provide flexibility for growthOrganic growth & lending opportunities Portfolio and
Slide 23: Strategy for 2010 and Beyond
23 Strategy for 2010 and Beyond This cycle isn't over yet so we need to proceed cautiously in all of our endeavors.Continue to expeditiously remove problem assets from the balance sheetPlan is to return to the growth mode experienced in the first 15 years of our existence with an overriding emphasis
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Slide 25: Financial Results
Financial Results
Slide 26: Banking
0 5 Banking Historical Growth og Facilities 43 Operating Subsidiaries
Slide 27: Banking Locations
27 Banking Locations Banking Locations
Slide 28: Total Assets
28 Total Assets (in millions)
Slide 29: Asset Growth - Internal / Acquired
29 Asset Growth - Internal / Acquired (in millions)
Slide 30: Asset Growth of Banks by Year
30 Asset Growth of Banks by Year (in millions) 1Q10
Slide 31: Consolidated Net Income
31 Consolidated Net Income (before Preferred Dividends, in 000s)
Slide 32: EPS Growth
32 EPS Growth Annual Quarterly
Slide 33: Revenue Growth by Quarter
33 Revenue Growth by Quarter (excluding Bargain Purchase Gain in 3Q09, 4Q09 & 1Q10) - - Net interest income - - Non-interest income (in 000s)
Slide 34: Net Interest Margin
34 Net Interest Margin (fully taxable equivalent)
Slide 35: Net Overhead Ratio & Efficiency Ratio
35 Net Overhead Ratio & Efficiency Ratio
Slide 36: Loan Portfolio Composition
36 Loan Portfolio Composition As of March 31, 2010 - $9.1 Billion (excludes loans sold or held for sale) Commercial Premium Finance -Life Insurance Res. R/E Home Equity Other Other Niches CommercialReal estate Premium Finance -Commercial Commercial Commercial
Slide 37: Ending Loan-to-Deposit/Secured Borrowing Ratio
37 Ending Loan-to-Deposit/Secured Borrowing Ratio* (excludes loans held for sale) *Includes $600 million of secured borrowing related to the commercial premium finance loan securitization for which the related loans are recorded on the balance sheet beginning in 2010. recorded on the balance sheet b
Slide 38: Non-Performing Assets to Total Assets
38 Non-Performing Assets to Total Assets (NPAs include NPLs and OREO) Assetsin millions Peer Group-2003 = 0.58%Peer Group-2004 = 0.45%Peer Group-2005 = 0.42%Peer Group-2006 = 0.43%Peer Group-2007 = 0.80%Peer Group-2008 = 1.94%Peer Group-2009 = 3.00%
Slide 39: Non-Performing Asset Ratio Wintrust vs. Peer Group
39 Non-Performing Asset Ratio Wintrust vs. Peer Group Peer Group Data is per the Federal Reserve's Bank HoldingCompany Performance Report Company Performance Report Company Performance Report
Slide 40: Net Charge-offs to Total Loans
40 Net Charge-offs to Total Loans LoansIn millions Peer Group-2003 = 0.33%Peer Group-2004 = 0.21%Peer Group-2005 = 0.18%Peer Group-2006 = 0.15%Peer Group-2007 = 0.27%Peer Group-2008 = 1.10%Peer Group-2009 = 2.28% 0.31%
Slide 41: Net Charge-offs Ratio Wintrust vs. Peer Group
41 Net Charge-offs Ratio Wintrust vs. Peer Group Peer Group Data is per the Federal Reserve's Bank HoldingCompany Performance Report Company Performance Report Company Performance Report
Slide 42: Credit Loss Reserve Analysis
42 Credit Loss Reserve Analysis Non- Non- Performing Performing Loans, net Loans (%) Community and Commercial Banking $6,436,031 $112,572 1.75% Indirect Consumer 83,136 1,280 1.54% Premium Finance Rec. 2,551,395 27,065 1.06% Total $9,070,562 $140,917 1.55% $5,229 2003 Calendar Year Net Charge-offs $
Slide 43: Financial Overview - Capital Components
43 Financial Overview - Capital Components (in millions) - - Common Shareholders Equity - - Trust Preferred Securities - - Subordinated Debt - - Preferred Securities
Slide 44: Financial Overview - Common Book Value Per Share
44 Financial Overview - Common Book Value Per Share Financial Overview - Common Book Value Per Share
Slide 45: Forward-Looking Statements
45 FORWARD-LOOKING STATEMENTS 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," "po
Slide 46: Forward-Looking Statements (cont.)
46 FORWARD-LOOKING STATEMENTS (cont.) negative economic conditions that adversely affect the economy, housing prices, the job market and other factors that may affect the Company's liquidity and the performance of its loan portfolios, particularly in the markets in which it operates;the extent of de
Slide 47: Forward-Looking Statements (cont.)
47 FORWARD-LOOKING STATEMENTS (cont.) the ability of the Company to attract and retain senior management experienced in the banking and financial services industries;failure to identify and complete favorable acquisitions in the future, or unexpected difficulties or developments related to the integ
Slide 48: Questions
48 Questions
Wintrust Financial — Bank of America Merrill Lynch Smid Cap Conference 2010 on 6ix