Slide 1: Earnings Release Presentation Q1 2023
Wintrust Financial Corporation Earnings Release Presentation Q1 2023
Slide 2: Forward-Looking Statements
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,” “possi
Slide 3: Forward-Looking Statements
Forward-Looking Statements • adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors; • increased costs as a result of protecting our customers from the impact of stolen debit card information; •
Slide 4: Q1 2023 Summary
Q1 2023 Summary "Wintrust successfully navigated the first quarter with limited disruption thanks to our strong deposit franchise and balanced business model. Total deposits remained stable in the first quarter as the diversity of our deposit base showed its resilience in a volatile market. Credit m
Slide 5: Q1 2023 Highlights (Comparative to Q4 2022)
Q1 2023 Highlights (Comparative to Q4 2022) Third consecutive record earnings quarter supported by balanced business model Net Income Pre-Tax, Pre-Provision1 Diluted EPS $180.2 million $266.6 million $2.80 +$35.4 million +$23.8 million +$0.57 Return on Assets ROE / ROTCE Efficiency Ratio (GAAP) (non
Slide 6: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Record Net Income Consecutive Record Quarterly PTPP as Net Interest Margin Expansion Drives Net Interest Income Growth ($ in Millions) ($ in Millions) $269.6 $180.2 $243.5 $208.9 $143.0 $144.8 $127.4 $177.8 1.40% $152
Slide 7: Loan Portfolio
Loan Portfolio Balanced loan portfolio of approximately 1/3 Commercial, 1/3 Commercial Real Estate and 1/3 Specialty Finance Measured Loan Growth Coupled with Expanded Loan Yield Balanced Loan Mix (as of 3/31/2023) ($ in Billions) Year-over-Year Change 6% $4.3B or 12% in Total Loans 21% 1% $39.2 $39
Slide 8: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Deposit Franchise Remained Solid Q1 '23 Commentary ($ in Billions) • Deposit base remained stable and liquidity remains strong $42.9 during a volatile market. We remain highly competitive in the $42.7 Chicagoland
Slide 9: Deposit Portfolio
Deposit Portfolio Reversion of deposit mix to pre-pandemic levels while deposit beta increases with market pressures Deposit Beta Accelerated in Q1 2023 Anticipated to Surpass Previous Cycle Betas Fed Target up 475 bps Total Interest-Bearing Deposit Beta 36% Total Deposit Beta 26% 5.00% 1.97% 1.40%
Slide 10: Liquidity
Liquidity Prudently managing investment portfolio, while maintaining adequate liquidity Investment Portfolio Snapshot (as of 3/31/2023) Q1 '23 Commentary ($ in Millions) • FHLB advances remained unchanged quarter over quarter Held-to-Maturity Available for Sale Yield (Q1 '23): 2.41% Yield (Q1 '23):
Slide 11: Capital
Capital Current capital levels are well in excess of regulatory thresholds with the Company recording record earnings Record Earnings Drove Capital Expansion Q1 '23 Commentary • The Company's current capital levels are well in 12.1% excess of regulatory thresholds and it is expected 11.9% 11.6% that
Slide 12: Net Interest Income/Margin
Net Interest Income/Margin Net interest margin benefiting from higher earning asset yields and drives higher net interest income Net Interest Margin Improvement Lifts Net Interest Income Higher Earning Asset Yields and Net Free Funds Contribution ($ in Millions) $456.8 $458.0 0.61% $401.4 3.83% 3.73
Slide 13: Non-Interest Income
Non-Interest Income Diversified fee business supports non-interest income levels despite challenging mortgage environment Fee Businesses Stable Amidst Rising Rate Environment Wealth Management Business Remains Healthy Despite Market Volatility ($ in Millions) ($ in Millions) $162.8 $33.1 $31.4 $31.4
Slide 14: Non-Interest Expense
Non-Interest Expense Conservative and consistent operating philosophy Lower Incentive Expense Partially Offset by Annual Merit Increase Efficiency Ratio Improvement Driven by Increased NIM and Lower Expenses ($ in Millions) $176.1 $180.3 $176.8 64.21% $172.4 $167.3 $28.4 $28.3 $30.6 $28.6 61.04% $28
Slide 15: Credit Quality
Credit Quality Exceptional credit quality driven by a diversified loan portfolio Continued Stable Levels of Non-Performing Loans Extended Low Levels of Net Charge-Offs ($ in Millions) ($ in Millions) 0.11% $47.6 $97.6 $100.7 $100.7 0.05% 0.06% $72.4 $23.0 $57.3 0.03% $20.4 0.03% $9.5 0.26% 0.26% 0.2
Slide 16: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans1 Diversified portfolio with low net charge-offs Sustained Portfolio Growth Paired with a Low Net Non-Performing Loans Remain Low Charge-Off Ratio ($ in Millions) ($ in Millions) $11,965 $12,216 $12,520 $12,560 $11,330 $48.0 $44.5 0.27% $36.0 $32.4 0.36% 0.38% $16.9
Slide 17: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties Measured Growth with Low Charge-Offs NPLs Remain at Low Levels ($ in Millions) ($ in Millions) $9,951 $10,239 $9,235 $9,407 $9,578 $12.3 $10.7 $10.5 $11
Slide 18: CRE Office Portfolio (as of 3/31/2023)
CRE Office Portfolio (as of 3/31/2023) CRE Office represents a minimal percentage of the Total Loan Portfolio Portfolio Characteristics Office Portfolio Geography as of March 31, 2023 Office ($ in Millions) 2 1 Chicago CBD, 13% Other CBD, 13% Balance ($ in Millions) $1,392 $184.8 $173.1 CRE Office a
Slide 19: Credit Quality - Premium Finance Receivables Commercial
Credit Quality - Premium Finance Receivables Commercial Net charge-off levels remain low while outstanding balances remain stable Seasonal Portfolio Decline NPLs Remain Below Historic Norms ($ in Millions) ($ in Millions) $5,714 $5,850 $5,739 $5,541 $4,938 0.30% $29.7 $29.3 $27.8 0.23% $19.1 $19.8 0
Slide 20: Credit Quality - Premium Finance Receivables Life
Credit Quality - Premium Finance Receivables Life Life Insurance portfolio remains extremely robust and has continued to demonstrate exceptional credit quality Modest Q1 '23 Growth with Exceptional Credit Quality Healthy Portfolio with Low Levels of Non-Performing Loans ($ in Millions) ($ in Million
Slide 21: Appendix
Appendix 21
Slide 22: Hedging Strategy Update
Hedging Strategy Update Use of Hedges to Mitigate Negative Impacts of Falling Rates Hedging activities had a 7 bp detriment to our Q1 2023 NIM. However, these derivatives will benefit the Company if interest rates fall materially. Below are the details of the derivatives entered by the Company as of
Slide 23: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S. Loan Portfolio - Geographic Diversification1 as of 3/31/2023 1% Canada Market: 2% 1% 5% 5% 1% 1% 1% 1% 2% 2% 2% 2% 36% 1% 2% 1% 1% 9% 1% 1% 1% 1% Primary Geographic 1% Total Loan Portfolio Region 2% Commercial: 1% Commercial, industrial and oth
Slide 24: Glossary
Glossary Abbreviation Definition AFS Available For Sale BOLI Bank Owned Life Insurance BP Basis Point BV Book Value per Common Share CBD Central Business District CDEC Chicago Deferred Exchange Company CECL Current Expected Credit Losses CET1 Ratio Common Equity Tier 1 Capital Ratio CRE Commercial R
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Reconciliation of non-GAAP Net Interest Margin and March 31, December 31, September 30, June 30, March 31, Efficiency Ratio ($ in Thousands): 2023 2022 2022 2022 2022 (A) Interest Income (GAAP) $ 639,690 $ 580,745 $ 466,478 $ 371,968 $ 328,252 Taxable-equiv
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, December 31, September 30, June 30, March 31, Reconciliation of non-GAAP Tangible Common Equity (#039;s and Shares in Thousands): 2023 2022 2022 2022 2022 Total shareholders’ equity (GAAP) $ 5,015,506 $ 4,796,838 $ 4,637,980 $ 4,727,623 $ 4,492,256 L
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, December 31, September 30, June 30, March 31, Reconciliation of non-GAAP Return on Average Tangible Common Equity ($ in Thousands): 2023 2022 2022 2022 2022 (N) Net income applicable to common shares $ 173,207 $ 137,826 $ 135,970 $ 87,522 $ 120,40