Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q2 2022 Earnings Presentation
25 slides from Wintrust Financial's earnings presentation, Jul 21, 2022
Slide 1: Earnings Release Presentation Q2 2022
Wintrust Financial Corporation Earnings Release Presentation Q2 2022
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 • 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
Slide 4: Q2 2022 Summary
Q2 2022 Summary "I am pleased with the second quarter results which exhibited strong earnings momentum and core fundamentals. The second quarter is a turning point for Wintrust as our net interest income and margin expanded meaningfully and remain poised for future growth. Additionally, the Company
Slide 5: Q2 '22 Highlights (Comparative to Q1 '22)
Q2 '22 Highlights (Comparative to Q1 '22) Exceptional loan growth coupled with strong net interest income expansion Net Income Pre-Tax, Pre-Provision1 Diluted EPS2 $94.5 million $152.1 million $1.49 -$32.9 million -$25.7 million -$0.58 Return on Assets Return on Equity Net Overhead Ratio 0.77% 8.53%
Slide 6: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Sustained Net Income Paired with Diverse Loan Growth Increasing Pre-Tax, Pre-Provision Income, Adjusted for Net MSRs/EBO1 ($ in Millions) ($ in Millions) $127.4 $151.6 $142.7 $139.7 $134.4 $134.4 $105.1 $109.1 $98.8 $
Slide 7: Loan Portfolio
Loan Portfolio Balanced loan portfolio of approximately 1/3 Commercial, 1/3 Commercial Real Estate and 1/3 Specialty Finance Increasing Market Share With Exceptional Loan Growth Balanced Loan Mix (as of 6/30/2022) ($ in Billions) ($ in Billions) Year-over-Year Change All Other Loans $0.4 Residential
Slide 8: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Maintained Deposits with Relatively Low Increase in Funding Costs Diversified Deposit Mix (as of 6/30/2022) ($ in Billions) ($ in Billions) Year-over-Year Change Time Certificates of $3.8B or 10% Deposits $3.7 No
Slide 9: Liquidity
Liquidity Deployed liquidity to finance earning asset growth coupled with strategic management of investment portfolio Excess Liquidity Funding Robust Loan Growth Tempered Growth in Investment Securities as Liquidity was used to Fund Loan Demand ($ in Billions) ($ in Billions) $4.7 $4.6 $4.7 $6.6 $6
Slide 10: Capital
Capital Adequate and appropriate capital levels given the Company's risk profile Common Stock Offering Improved Capital Adequacy1 Record High TBV3 in Q2 2022 12.4% 12.1% 11.6% 11.6% 11.8% $59.64 $59.87 $53.23 10.1% 9.9% 9.9% $49.70 9.6% 9.6% 9.0% $44.67 8.9% 9.0% 8.6% 8.6% 8.8% 8.2% 8.1% 8.0% 8.1% 6
Slide 11: Digital Usage Trends
Digital Usage Trends Modern digital tools coupled with a high touch community focus Digital Use - Online/Mobile Zelle Payments In Tune with Online/Mobile Use Trends Growing Zelle Adoption (in Thousands) 809.0 67.2% 598.8 66.0% 329.2 64.3% Q2 2020 Q2 2021 Q2 2022 Q2 2020 Q2 2021 Q2 2022 Online/Mobile
Slide 12: Awards - #1 in Overall Satisfaction - J.D. Power
Awards - #1 in Overall Satisfaction - J.D. Power Wintrust Sets Itself Apart From the Rest Wintrust Community Banks rank #1 in Customer Satisfaction with Retail Banking in Illinois by J.D. Power and #1 in Illinois for Account Offerings, Saving Time and Money, Problem Resolution, and Convenience. Foun
Slide 13: Net Interest Margin ("NIM")
Net Interest Margin ("NIM") Net interest margin benefiting from rising loan yields and prudent deployment of liquidity to fund loan growth Expansion in Net Interest Income and Increasing NIM NIM Benefited by Higher Earning Asset Yields ($ in Millions) $337.8 $4.9 0.36% $332.9 0.03% $296.0 $299.3 $28
Slide 14: Non-Interest Income
Non-Interest Income Diversified fee business supports non-interest income levels despite challenging mortgage environment Mortgage Revenue Normalization and Market Volatility Operating Lease Portfolio Contributes Meaningful Fee Impacted Non-Interest Income Income ($ in Millions) ($ in Millions) Year
Slide 15: Mortgage Banking
Mortgage Banking Internal hedge with counter-cyclical returns relative to our net interest income related business lines Continued MSR Value Appreciation Diminishing Originations for Sale due to Rising Mortgage Rates ($ in Millions) ($ in Millions) $13,427 $13,644 $13,126 $1,724 $12,720 $1,559 $12,3
Slide 16: Non-Interest Expense
Non-Interest Expense Conservative and consistent operating philosophy Relatively Steady Staffing Expense Trend Expense Ratios Impacted by Valuation Related Activity ($ in Millions) $172.8 $170.9 $167.1 $172.4 $167.3 $28.0 $25.7 $28.4 1.51% $25.6 $28.8 1.32% 1.22% 1.21% $53.8 $57.0 $49.9 $51.8 $46.1
Slide 17: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S. Loan Portfolio1 - Geographic Diversification2 as of 6/30/2022 Total Loan Portfolio1 Primary Geographic Region Commercial: Canada Market: 2% Commercial, industrial and other Illinois/Wisconsin 1% Leasing Nationwide Franchise Lending Multi-State
Slide 18: Credit Quality
Credit Quality Exceptional credit quality driven by a diversified loan portfolio Steady Levels of Non-Performing Loans ("NPLs") Continued Low Levels of Net Charge-Offs ("NCOs") ($ in Millions) ($ in Millions) 0.11% $87.7 $90.0 0.07% $74.4 0.02% 0.03% $72.4 0.00% $20.4 $57.3 $9.3 $1.9 $0.00 $4.1 $6.2
Slide 19: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans1 Low net charge-off levels with growth upside as line utilization remains below pre-pandemic levels Period-End Balances & Annualized Net Charge-Off Ratio Continued Low Levels of Non-Performing Loans ("NPLs") ($ in Millions) ($ in Millions) $11,965 $11,346 $11,330 $3
Slide 20: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties Continued Steady Growth with Low Charge-Offs Non-Performing Loans ("NPLs") Continue to Decline ($ in Millions) ($ in Millions) $9,407 $9,235 $8,886 $8,9
Slide 21: Credit Quality - Premium Finance Receivables Commercial
Credit Quality - Premium Finance Receivables Commercial Net charge-off levels remain low while outstanding balances grow Significant Loan Growth While Maintaining Low Net Charge-Offs Non-Performing Loans ("NPLs") Remain Below Historic Norms ($ in Millions) ($ in Millions) $5,541 $4,855 $4,938 $19.8
Slide 22: Credit Quality - Premium Finance Receivables Life
Credit Quality - Premium Finance Receivables Life Life Insurance portfolio remains extremely robust and has continued to demonstrate exceptional credit quality Reliably Strong Growth With Pristine Credit Quality No Outstanding Non-Performing Loans ("NPLs") ($ in Millions) ($ in Millions) No material
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Six Months Ended Reconciliation of Non-GAAP Net Interest Margin and June 30, March 31, December 31, September 30, June 30, June 30, June 30, Efficiency Ratio ($ in Thousands): 2022 2022 2021 2021 2021 2022 2021 (A) Interest Income (GAAP) $ 371,968 $ 328,252
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Reconciliation of Non-GAAP Tangible Common Equity June 30, March 31, December 31, September 30, June 30, ($'s and Shares in Thousands): 2022 2022 2021 2021 2021 Total shareholders’ equity (GAAP) $ 4,727,623 $ 4,492,256 $ 4,498,688 $ 4,410,317 $ 4,339,011 Le