Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q4 2023 Earnings Presentation
27 slides from Wintrust Financial's earnings presentation, Jan 18, 2024
Slide 1: Earnings Release Presentation Q4 2023
Wintrust Financial Corporation Earnings Release Presentation Q4 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: Full Year 2023 Highlights (Comparative to FY 2022)
Full Year 2023 Highlights (Comparative to FY 2022) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $622.6 million $959.5 million $9.58 +$113 million or 22% +$180 million or 23% +$1.56 or 19% Net Interest Income Net Interest Margin BV / TBV (GAAP) (non-GAAP) (GAAP) (non-GAAP) $1.8 billion 3.66% 3.68%
Slide 5: Q4 2023 Highlights (Comparative to Q3 2023)
Q4 2023 Highlights (Comparative to Q3 2023) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $123.5 million $208.2 million $1.87 -$40.7 million -$36.6 million -$0.66 Return on Assets ROE / ROTCE Efficiency Ratio (GAAP) (non-GAAP) (GAAP) (non-GAAP) 0.89% 9.93% 11.73% 63.81% 63.51% -31 bps -342 bps -400
Slide 6: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Quarterly Net Income Quarterly Pre-Tax Income, excluding Provision for Credit Losses ($ in Millions) ($ in Millions) $180.2 $266.6 $164.2 $242.8 $239.9 $244.8 $154.8 $144.8 $208.2 1.40% $123.5 1.18% 1.20% 1.10% 0.89%
Slide 7: Loan Portfolio
Loan Portfolio Diversified loan portfolio Sustained Loan Growth Coupled with Higher Loan Yield Diversified Loan Mix (as of 12/31/2023) ($ in Billions) Year-over-Year Change 7% $2.9B or 7% in Total Loans 1% 19% $41.4 $42.1 $39.2 16% 6.51% 6.69% 5.15% 30% 27% 12/31/2022 9/30/2023 12/31/2023 Commercial
Slide 8: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Continued Deposit Growth Supported by Strong Franchise Highlights ($ in Billions) $45.4 $45.0 • Strong year-over-year deposit growth totaling $2.5 billion • Deposit base and liquidity remain strong despite a vola
Slide 9: Deposit Portfolio
Deposit Portfolio Deposit beta increase driven by on-going competition for liquidity Deposit Beta Increased but Moderated in Q4 2023 Fed Funds Upper Target up 525 bps Total Interest-Bearing Deposit Beta 59% Total Deposit Beta 45% 5.50% 3.32% 2.54% 0.25% 0.24% 0.16% 12/31/21 12/31/2023 12/31/21 12/31
Slide 10: Capital/Liquidity
Capital/Liquidity Current capital levels are well in excess of regulatory thresholds with the Company recording strong earnings Capital Levels Remained Stable Supporting Strong Growth CET1 Increased due to Earnings CET1 Ratio 11.9% 12.0% 12.1% 0.3% 10.2% (0.2)% 9.4% 10.0% 10.2% 9.3% 9.3% 9.4% 9.1% 9
Slide 11: Net Interest Margin/Income
Net Interest Margin/Income Net interest margin within guidance range; coupled with earning asset growth, record net interest income Q4 2023 NIM Increased Despite Continued but Moderating Deposit Pricing Pressures Q3 '23 NII Q4 '23 NII $462.4MM $470.0MM 0.18% 0.03% 3.62% (0.19)% 3.64% NIM (non-GAAP)
Slide 12: Non-Interest Income
Non-Interest Income Diversified fee businesses support non-interest income levels despite challenging mortgage environment Mortgage Impacted by Change in Interest Rate Environment Strong Wealth Management Business ($ in Millions) ($ in Millions) $113.0 $112.5 $33.9 $33.5 $33.3 $107.8 $30.7 $100.8 $2
Slide 13: Non-Interest Expense
Non-Interest Expense Continue to monitor our expenses and believe they are in line with current Company growth Salaries and Benefits Increase Primarily Driven by Employee Insurance Efficiency Ratio Increase a Result of FDIC Special Assessment ($ in Millions) $192.3 $194.0 $180.3 $176.8 $184.9 63.51%
Slide 14: Credit Quality
Credit Quality Exceptional credit quality supported by a diversified loan portfolio Manageable Levels of Non-Performing Loans Consistently Low Levels of Net Charge-Offs ($ in Millions) ($ in Millions) 0.32% 0.33% 0.17% 0.26% 0.25% 0.26% 0.14% $47.6 $42.9 $139.0 0.08% $133.1 0.05% 0.06% $28.5 $23.0 $
Slide 15: Credit Quality - Allowance for Loan Losses
Credit Quality - Allowance for Loan Losses The Company remains well-reserved Sufficient Allowance Coverage of Total Loan Portfolio Well-Reserved Across Our Core Loan Portfolio ($ in Billions) ($ in Billions) $41.4 $42.1 $24.6 $41.0 $24.1 $23.4 1.01% 1.55% 0.94% 0.96% 1.51% 1.50% 6/30/2023 9/30/2023
Slide 16: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans Diversified portfolio with low net charge-offs Consistent Portfolio Growth Paired with Steady Net Charge-Off Ratio Continuously Low Levels of Non-Performing Commercial Loans ($ in Millions) ($ in Millions) $12,832 $12,725 $12,549 $12,577 $12,600 $48.0 $41.0 $43.8 $3
Slide 17: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties CRE NPLs Increase Driven Largely by One Loan, Which is Current, Relatively Low Levels of Net Charge-offs and Secured by "Co-working" Office Space ($ in
Slide 18: CRE Office Portfolio (as of 12/31/2023)
CRE Office Portfolio (as of 12/31/2023) CRE office represents a minimal percentage of the total loan portfolio As of As of CRE Office Portfolio Geography Portfolio Characteristics 9/30/2023 12/31/2023 ($ in Millions) 1 2 Chicago CBD, Other CBD, 13% Balance ($ in Millions) $1,423 $1,455 12% CRE offic
Slide 19: Credit Quality Premium Finance Receivables - Life Insurance
Credit Quality Premium Finance Receivables - Life Insurance Life Insurance portfolio remains steady and has continued to demonstrate exceptional credit quality Q4 Balances Remained Stable with Strong Credit Quality Healthy Portfolio with Low Levels of Non-Performing Loans ($ in Millions) ($ in Milli
Slide 20: Premium Finance Receivables - Property and Casualty Insurance
Premium Finance Receivables - Property and Casualty Insurance Continued Stable Balances for Q4 Moderate Levels of Non-Performing Loans ($ in Millions) ($ in Millions) $47.7 $43.0 $6,763 $6,723 $6,904 $5,850 $5,739 $32.4 $29.3 $27.8 0.29% 0.29% 0.23% 0.24% 0.69% 0.64% 0.16% 0.50% 0.48% 0.48% 12/31/20
Slide 21: Appendix
Appendix WINTRUST 21
Slide 22: Hedging Strategy Update
Hedging Strategy Update Use of Hedges to Mitigate Negative Impacts of Falling Rates Hedging activities had a 19 basis point detriment to our Q4 2023 NIM as compared to 18 basis points in Q3 2023. These derivatives are expected to benefit the Company if interest rates fall materially. Below are the d
Slide 23: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S Loan Portfolio - Geographic Diversification1 (as of 12/31/2023) Canada: 2% 5% 4% 2% 2% 2% 3% 35% 2% 9% 2% Total Loan Portfolio Primary Geographic Region Commercial: 2% Commercial, industrial and other Illinois/Wisconsin 6% Leasing Nationwide Fra
Slide 24: Glossary
Glossary Abbreviation Definition AFS Available For Sale BOLI Bank Owned Life Insurance BP Basis Point BV Book Value per Common Share CBD Central Business District CET1 Ratio Common Equity Tier 1 Capital Ratio CRE Commercial Real Estate Diluted EPS Net Income per Common Share - Diluted FDIC Federal D
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Years Ended Reconciliation of non-GAAP Net Interest Margin and December 31, September 30, June 30, March 31, December 31, December 31, December 31, Efficiency Ratio ($ in Thousands): 2023 2023 2023 2023 2022 2023 2022 (A) Interest Income (GAAP) $ 793,848 $
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Years Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, Reconciliation of non-GAAP Return on Average Tangible 2023 2023 2023 2023 2022 2023 2022 Common Equity ($ in Thousands): (N) Net income applicable to common sha
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended December 31, September 30, June 30, March 31, December 31, Reconciliation of non-GAAP Tangible Common Equity 2023 2023 2023 2023 2022 ($'s and Shares in Thousands): Total shareholders’ equity (GAAP) $ 5,399,526 $ 5,015,613 $ 5,041,912 $ 5,015,506 $ 4,796,83